BOOTS has been one of the best performing consumer stocks in the past five years, boasting the fourth strongest total shareholder return of all.

A business driven more by attention to cash than most in the face of recent acquisition activity, Boots will probably end the current year with substantial net balances.

It has a similar culture to Marks & Spencer in that it largely prefers to grow businesses using its in-house expertise.

It is quite symbolic that neither has done at all well with major takeovers outside their core activities.

Only now is the Halfords part of Boots beginning to look interesting in shareholders' eyes.

However, Boots' move into financial services does seem rather astute, even if it will always be a small part of the operation.

It is possible that within five years sales could be approaching #100m with a 30% gross margin and only a trifling carriage cost of providing forms and a little shelf space.

The strength and integrity of the brand name is worth a huge amount of promotional expense.

The biggest competitive concern comes from the supermarkets, with J Sainsbury now the dark horse in terms of providing the keenest challenges.

Boots seems to have turned its Advantage loyalty card into profit faster than its competitors and now has a base of more than eight million users. It is well able to fight its corner.

And in spite of the Far East's troubles, the City seems to be remarkably optimistic about Boots' prospects for Thailand. There the company is able to pick up sites cheaply in sterling terms and will begin to achieve critical mass with around 40 stores providing a solid platform for further Asian

expansion.

Reliance upon Japan should be carefully scrutinised as few British retailers have made chunky sums there in the past.

On the Charterhouse forecast of profits of #626m for this year, the shares are trading at 21 times likely earnings which looks high but the cash generation provides great reassurance.