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Bottom Line: European label chase

Wednesday 17 November 1993 19:02 EST
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RICHARD BREWSTER is playing the same game at Jarvis Porter, the Leeds-based label manufacturer, that he did at David S Smith in the 1980s. Once again he is growing a business rapidly by acquisition.

Mr Brewster plans to cater for the big label users, such as Procter & Gamble, by developing a business that can service them throughout Europe. As yet the Waterlomat operation in Belgium is its only one on the Continent, but with the label business there highly fragmented, Jarvis Porter makes no secret of its plans for more acquisitions.

The fruits of the strategy are evident at the half-year. Profit before tax is up 84 per cent to pounds 3.4m for the six months to 31 August and turnover up 71 per cent at pounds 28m. But these figures are flattered by four recent acquisitions. More to the point, earnings per share are 41 per cent higher at 7.2p. The interim dividend is 1.65p against 1.5p last year.

Despite gearing of only 5 per cent, investors may fear that ambitious growth targets will inevitably lead to a rights issue, especially as the shares are on a prospective p/e of 19 at 277p, up 7p.

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