Buoyant Lowndes' pounds 5m buy: New shares to be issued to acquire broker as profits grow worldwide
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LOWNDES Lambert, the insurance broker, will issue 1.2 million new shares to buy Henshaw Hindle, a broker based in the North-west, for pounds 4.65m.
Lowndes' pre-tax profits rose by 28 per cent to pounds 13.2m in the year to 31 March, 1994, with strong growth in the UK, Europe and Australia. This included a first-time operating profit of pounds 1.6m from Norex, the British broker Lowndes bought in May 1993.
The deal follows a series of acquisitions that which started with Lowndes' management buyout from Hill Samuel in 1988, and continued after the flotation in 1991. Lowndes' new issue, which represents about 4 per cent of the existing share capital, will be split between 1,086,503 shares in a vendor placing and 132,370 shares which the vendor institutions have agreed not to dispose of for at least six months. The new shares will be priced at 381.5p.
Earnings per share rose 13.2 per cent to 31.7p and a final dividend of 10p per share was declared, making 15p for the year
Henshaw Hindle, is an insurance broker formed in 1972, has offices in Preston, Leeds, Birmingham and Maidstone. David Margrett, Lowndes' managing director, says he expects to cut costs by merging all Henshaw's WHH's offices, except Maidstone, with Lowndes' offices.
Richard Shaw, chairman, said: 'The recent consolidation seen in our sector can only strengthen our position as one of the few independent insurance brokers with genuine worldwide capability in all classes.'
Broking profit rose by 70.7 per cent to pounds 7.0m, without the benefit of the currency gains enjoyed by many of Lowndes' competitiors.
The shares fell 9p to 393p.
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