Suter is ready to expand after 17% rise in profits
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Your support makes all the difference.SUTER, the mini-conglomerate, reported a 17 per cent rise in profits before tax and exceptionals to pounds 19.1m in 1993.
Pre-tax profits of pounds 38.2m were more than double 1992's level, boosted by an exceptional gain of pounds 19.1m from the disposal of its industrial valves division.
The company signalled it was looking for acquisitions. David Abell, Suter's chairman, said it had the balance sheet and management strength to become a much bigger business.
He could not comment on the future of its 29 per cent stake in James Wilkes, the Sheffield engineering firm, although he said it was an ideal fit with Suter's businesses. The holding was acquired at an average share price of 90p, making Suter's unrealised gain on its stake about pounds 3.7m.
The group's net borrowings fell sharply, from pounds 31m to pounds 6.7m, and gearing dropped to 11 per cent. Mr Abell expects a new bonus issue of warrants, one for every 10 ordinary shares, to raise about pounds 20m.
Recent acquisitions have been distribution businesses, of haircare and commercial refrigeration products.
The company has focused on a diverse range of core businesses - distribution, industrial products and chemicals. Sales in 1993 rose slightly in the first two of these areas and advanced 8 per cent in the third after a strong performance in speciality chemicals.
'I am delighted with our trading performance, but trading conditions were not as good as expected,' Mr Abell said. 'We were all dressed up for a party that hasn't started yet.' He thought 1994 would see further gradual improvement.
Earnings per share, fully diluted and before exceptionals, advanced 18 per cent to 11.3p, and the dividend rose from 8.8p to 9.2p. Although analysts forecast earnings growth of around 20 per cent for the current year, the shares closed down 3p at 202p.
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