Yorkshire Foods issue snapped up

YORKSHIRE Foods, which prepares and distributes dried fruit and nuts, was deluged by demand for shares issued as part of its flotation, writes Robert Cole.

There were 10 times more takers than shares available. Yorkshire is raising pounds 15m in the exercise, most of which will be used to reduce debt.

The Bradford-based company was set up in 1979 by Mike Firth with a pounds 3,000 overdraft. Mr Firth, now chairman and chief executive, has paper wealth of pounds 10m.

Forty per cent of the enlarged share capital is being placed. Mr Firth will retain ownership of 25 per cent of the company, and with other directors and employees will speak for 50 per cent of the shares after flotation.

Mr Firth is realising pounds 750,000 of his stake in the company.

Yorkshire made operating profits of pounds 3.8m in the year to 31 December, 40 per cent up on the previous year. Turnover was pounds 63.2m.

The shares are to be placed at 110p, 15 times 1992 earnings per share - adjusted to negate interest payments on debt that will be repaid. Debt gearing will be reduced to 27 per cent from 80 per cent.

Dealings are expected to start on 9 March. Shares are likely to jump in price in early trading. The heavy demand suggests that Panmure Gordon, Yorkshire's adviser, underpriced the issue.