Hozelock basks in the heat of a profitable summer sun: Dry weather prompts pounds 2m upgrade on results forecast
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Your support makes all the difference.SCORCHING summer weather, though not hot enough to provoke widespread hosepipe bans, has boosted the fortunes of Hozelock, Britain's leading supplier of garden watering equipment, writes Terence Wilkinson.
The company, based in Birmingham, said yesterday the hot, dry summer meant that demand for its products had exceeded expectations. As a result, pre-tax profits for the year to 30 September, due to be announced in early December, would be ahead of stock market forecasts.
Philip Shepeard, an analyst with James Capel, Birmingham, said that he had added pounds 2m to his sales forecast for Hozelock.
The operational gearing of these extra sales and productivity gains achieved by the company during the season had led him to increase his profit forecast by 15 per cent from pounds 6m to pounds 6.9m.
Hozelock shares rose 12p to 285p on the company's upbeat trading statment. It was floated last November at 250p with a pounds 59.5m price tag. The company was bought out from Ropner for pounds 24m in 1990 and with 300 products holds about two-thirds of the UK market for garden watering and spraying.
David Codling, chief executive, said wetter than normal weather had meant a slow start to the season in April and May. But the almost unbroken hot, dry weather in June and July had stimulated business in the retail trade. Watering products account for more than half of Hozelock's sales and had shown the strongest sales growth.
In particular, demand for hosepipe storage products - reels and systems - had been buoyant and sprinklers had begun to sell again for the first time since 1990.
Sales had received a further boost from a growing appetite for ponds, which Hozelock supplies with pumps and lighting from its aquatics range.
The company is shortly moving into a purpose-built, 175,000 sq ft factory. As a result of the extra efficiency this will provide, James Capel has also raised its profit forecast for Hozelock in 1994/5 from pounds 6.75m to pounds 7.5m.
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