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Manders' strategy starts to pay off

Magnus Grimond
Thursday 23 March 1995 19:02 EST
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Manders has undergone the nearest thing to a revolution since it saw off an £89m hostile bid from the paint maker Kalon two and a half years ago.

It has dumped the old low-margin paint business, where it was a minnow in a pond dominated by sharks, and now concentrates wholly on the more exciting inks operation.

With over £80m spent on expanding the business last year, the strategy is risky, but the results are starting to come through. Yesterday it reported underlying profits up 15 per cent to £11.8m in the year to December and revealed plans to raise turnover by £100m to £250m in the next two to three years.

With £13m still in the bank from a property sale, the company has a war chest of perhaps up to £60m for acquisitions. The target is Europe, particularly Germany, France and Spain, but deals can take 12 to 18 months to pull off, the chairman, Roy Amos, warns.

Last year's reported figures, which showed pre-tax profits more than doubled to £23.9m, were distorted by £12.2m property disposal profits and £2.67m rental income.

Forecast profits of £14m this year would put the shares, up 9p at 312p yesterday, on a prospective multiple of nearly 14. Worth holding while the strategy unfolds.

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