In five years' time British Steel could see a quarter of production coming from abroad.Given the company's high operational gearing and huge sensitivity to small price movements, accurate forecasting of profits becomes a lottery.The mid point this year is around pounds 250m, but prices only have to soften or harden by 2 per cent for these to move pounds 150m in either direction.Assuming pounds 250m for this year, the shares, down 5p to 158.5p, are on a forward multiple of 18 times earnings. Although prices have moved off the bottom, encouraging the company to describe the trading outlook as one of "cautious optimism", prices have a long way to go to get back to their peak two summers ago.The company's answer to the short-term phenomenon of a strong exchange rate has been to axe jobs - 1,500 last year and more than 2,000 already announced this year - and look for opportunities to increase its presence overseas.Its US steelmaking businesses are just coming on stream and it is in advanced talks to take a majority stake in a $900m Indonesia mini-mill. The discussion will be a prelude to a special jobs summit to be held in the UK early next year. In an emphasis that will chime entirely with the views of the Clinton administration, the Labour Government wants the meeting to focus on equipping people with the skills they need to succeed in a flexible labour market, and on removing barriers to job creation. Announcing the summit, likely to be held in February, Mr Brown said: "Employability is the key to a cohesive society which offers opportunity to all its citizens. Better education and higher skills, combined with reduced burdens on business, are the way to guarantee high and stable levels of growth and employment."This week's summit of world leaders and finance ministers is likely to commission new research to be presented in February. This year it expects the rate to be more like DM1.75.With 60 per cent of sales denominated in deutschmarks and profits cut by pounds 10m every time the pound appreciates by one pfennig, it is easy to see why the company is screaming from the rooftops for a little less emphasis on interest rates as the mechanism for keeping inflation in check.In fact British Steel has been just as badly, if not worse, hit by soft prices.Taking hot-rolled coil over the past 18 months, for instance, the price has slumped by around a quarter to DM480 a tonne.The stainless business, Avesta, has been hit hardest.

In 1996-97 British Steel achieved an exchange rate of DM1.46 to the pound. As fast as the company sheds jobs at home and expands production abroad, sterling's strength eats away at profits. The one consolation is that things could have been worse. Pre-tax profits last year, though down by 60 per cent to pounds 451m, were not as badly hammered as some had feared.Indeed, add back in pounds 60m of unanticipated restructuring provisions and the bottom line begins to look almost healthy.This year there will be more pain. The iron bar represented by the pound-deutschmark exchange rate looks like doing grievous bodily harm to British Steel as far ahead as it is sensible to look. The proposed sale of Cater Allen comes after the discount houses lost their exclusive right to act as broker between the Bank of England and the commercial banks, a role Cater has fulfilled since 1815.Cater has struggled to deal with interest-rate movements and profits for the six months to October showed a 40 per cent fall to pounds 5.4m after the firm was caught out by a surprise increase in rates.. The shares closed 2.5p lower yesterday at 547.5p. Apart from its traditional role as a discount house - essentially a go- between for the Bank of England and the big clearing banks - Cater Allen has a successful offshore investment operation in Jersey.It also owns CaterDeal, the execution-only broker it bought in 1995 for pounds 7.25m.Earlier this year it bought Aitken Campbell, the Glasgow market-making offshoot of Union, and said it planned to integrate the firm with its own broking business.

Cater Allen's shares soared earlier this month by more than 100p to 562p after the company said it was in talks that might lead to a bid. Abbey National has emerged as the mystery suitor for Cater Allen in a bid that could value the former discount house at up to pounds 200m. The bank, which was only recently linked to high- street rival NatWest, said it would make a further announcement soon. He warned that, although performance in the UK had "significantly improved", the economic and political situations in France and Germany were likely to hinder future growth..

Iplast is expected to make a profit before interest and tax of 210 million pesetas (pounds 900,000) this year.Announcing a 35 per cent increase in pre-tax profits to pounds 9.3m for the year to the end of March, Mr O'Shaughnessy said the strength of sterling had depressed profits by around pounds 500,000. A ruling is expected as early as this week.T&N's share price climbed sharply after it secured the insurance deal which capped its asbestos liabilities. But since then its value has slumped alarmingly, and it has severely underperformed the stock market.. Cathy Newman Plysu, the plastic containers group, has made the first of a series of planned acquisitions in Spain with the pounds 4.25m purchase of Iplast, a company which makes bottles for olive oil. Buying Iplast, which is based in Andalucia, would enable Plysu to exploit opportunities in the liquid food packaging market in Spain, the company said yesterday.David O'Shaughnessy, Plysu's chairman, said "further carefully targeted acquisitions" were planned following the formation of the company's Spanish division, Plysu Envases Alimentarios. Analysts estimate it would wipe up to pounds 120m off any future claims.