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Earnings should rise by about 30 per cent this year and 35 per cent the year after, boosted by openings in embryonic overseas markets. With even President George Bush urging obese America to follow his example and hit the treadmills, the lifestyle pressures favouring fitness clubs are increasing all the time. Although this is not the time to be chasing consumer-focused stocks, the shares are fair value and worth holding. DS Smith should offer good value What is the point in investing in DS Smith? It is not meant to be a rude question. Investors have to be tempted into the market by something, and a packaging and office supplies group does not sound the sort likely to offer a sudden share price spurt, particularly given the disappointing results it posted yesterday.Tony Thorne, the chief executive, answers the question in several ways.

The group, whose activities span paper making to paper clip wholesaling, deals in “here today, here tomorrow” products. It has a solid business with a small number of growth opportunities, and it has a strong dividend. That’s enough to make it a buy in these markets, Mr Thorne reckons. His analysis is entirely fair.Results for the year to 30 April were only fair to middling, though. While turnover was up 3 per cent to £1.44bn, profit before tax, goodwill and exceptionals slipped from £72.2m last time to just £62.6m.Improved sales and margins in the main packaging and paper division failed to outweigh the sharp downturn in office supplies.

With office budgets tight, the demand for pads, pens and paper clips seems to be down about 5 per cent on this time last year. There is little sign of a pick-up, but job cuts and the resolution of some little operational difficulties should at least ensure the profit outcome for the division this year is no worse.The main worry is that DS Smith will find it hard to pass on the rising costs of recycled paper to its cash-strapped customers. It held its dividend, but it remains well covered, and the stock, up 7p to 165p, should yield between 5 and 6 per cent this year On 11 times prospective earnings, it is good value.. The WorldCom scandal has thrown the spotlight on America’s Securities and Exchange Commission as never before. The main US financial regulator was once seen as the most powerful and feared watchdog in the world. Now it stands accused of failing to push through regulatory changes that would have helped prevent the series of US corporate meltdowns running from Global Crossing to Enron and on to WorldCom.The SEC’s current chairman, Harvey Pitt, has been accused of being too close to business to be truly independent. And as if all that were not enough the SEC has been upstaged by New York State Attorney General Eliot Spitzer who stole its thunder with his assault on stock ramping at Merrill Lynch.
The former SEC chairman Arthur Levitt, who left last August, has been trenchant in his views, even admitting that regulatory bodies had been “asleep at the switch”.”All of the gatekeepers, traditional guardians of the public interest have failed,” he says “Not just the accountants, that’s the easy one.

I am talking about the lawyers, boards of directors, the rating agencies, the standards setters, the regulators. A whole host of gatekeepers were asleep at the switch.”Mr Levitt claims he tried to push through radical changes in US accounting regulation but ran into a roadblock of objections from the business lobby in Washington. Asked what sort of pressure he was subjected to, he says: “It was considerable. The amount of money the [accountancy] profession spent on Capitol Hill was enormous We only got half a loaf. It wasn’t enough but it was progress.”Mr Levitt had been proposing to separate the audit and consultancy functions of the big accountancy firms so that they would have been able to undertake either audit or consultancy work for clients, but not both.He had also wanted to introduce a system whereby listed companies would be required to disclose how much they were paying in audit fees and how much for consultancy. Consultancy payments typically dwarfed audit fees by a ratio of seven to one.He was apparently contacted by dozens of members of Congress telling him to back off.