GGT launches 14.7m pounds cash call
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Your support makes all the difference.GOLD Greenlees Trott, the advertising agency behind the Red Rock Cider campaign, is raising pounds 14.7m from shareholders to fund its future expansion.
The company, whose profits have fallen due to lower spending by advertisers, said it was evaluating three acquisition opportunities in the UK and the US to develop existing operations and boost its client base.
'The purpose of the rights issue is to enable the group to react in a timely and flexible fashion to potential acquisition and investment opportunities,' Michael Greenlees, the joint chairman, said.
Although the company's net borrowings amount to pounds 24m, proceeds from the one-for-three rights at 235p will be placed on short-term deposit.
GGT is also forecasting a maintained final dividend of 5p for the year ending 30 April, which would leave the total payout unchanged at 8.3p a share.
GGT said there were increasing signs of an upturn in confidence among US consumers that should result in another strong performance from its American operations. The strong dollar is also expected to make a positive impact on the group's results.
Although the UK market remained difficult, the company said its broad spread would help to insulate it from the worst effects of the recession.
Lorna Tilbian, media analyst at Warburg Securities, is forecasting taxable profits to slip from pounds 5.5m to pounds 4.7m for 1993.
GGT shares closed 12p lower at 288p. They have come up from a 12-month low of 197p last April.
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