No Pain, No Gain: Music in cars and shops is the sound of profits

Armour Group is one of the many smallcaps that have been around the block a few times. In the past 40 years or so, it has dabbled in a variety of activities, including soft drinks and confectionery. Until recently it had enjoyed limited success. But it is now on a veritable roll - thanks to yet another interest.

These days it is an impressive player in the world of in-car communication and entertainment. It is a lucrative business, judging by the results Armour produced last week. Sales in the year to end August rose 94 per cent to £31.1m, pre-tax profits jumped 105 per cent to £2.9m, and earnings per share 74 per cent to 4.7p. The dividend increase was less spectacular: a mere 29 per cent to 0.45p. Still, a little caution at this stage in the group's development is no doubt justified.

What about the current year? Trading appears to be shaping up well but the high notes hit last year are unlikely to be repeated. Sales are expected to reach a commendable £35m with profits emerging at, say, £3.4m.

It is all a far cry from the days when Armour was an obscure investment vehicle. Subsequently it was transformed into a mini-conglomerate. Among the companies it alighted on was Tizer, then a quoted and struggling soft drinks enterprise. But Armour did not have the resources to recapture the sparkle that Tizer once enjoyed. So it was quietly ditched. The brand is now owned by AG Barr which has for years enjoyed the distinction of being Britain's only quoted "pure" softdrinks operation. However, in the New Year it will have company - in the shape of Britvic, which is due to be floated by its owners, three former brewers.

In its search for salvation, Armour at one time or another owned the Bond boiled sweets business, as well as companies involved in providing air-fresheners, mainly for cars. But a move into in-car hi-fi eventually transformed the then heavily indebted group. It wanted, for a time, to sell the in-car operation to its management, but shareholder resistance scuppered the plan. Later, serial investor Bob Morton, already nursing a small stake, saw his chance to assume control. Not only did he retain the entertainment business, but he made it Armour's core activity, overseeing some intriguing acquisitions.

Mr Morton, chairman of six quoted companies and significant shareholder in 15, moved in as chairman and Armour swung from the slow to the fast lane. Its shares, bumping along at about 15p when he arrived, are now about 73p, after hitting 90p earlier this year. Some observers think the best is over and from now on Armour's progress will be much more sedate. It is true that current-year estimates suggest a more pedestrian display. But is there too much caution around? Even if forecasts for this year are correct, there is little doubt the group is on a roll.

It is not just with in-car equipment that it is hitting the right note. Similar in-home sound systems have been developed. Its home operations should make a reasonable profit this year. Housebuilders are studying its hi-fi installations and I believe Armour feels that two builders are near to signing contracts to include its systems in some of their up-market developments. Installing sound systems in shops, malls and pubs are other developments high on chief executive George Dexter's agenda.

Last year Armour had £2.5m in the bank. Expansion since then has left it with an overdraft. Its last deal was the £1.75m acquisition of a company fitting home installations. I agree Armour is set for a quieter existence; but it will continue to make heady progress, with its in-car entertainment side making the right noises and the expansion into homes, shops and pubs providing more than adequate back-up. The ground has been prepared for what could emerge as a substantial company, which could attract a takeover bid. The shares are now regarded, in some quarters, as a sell. But if I were a shareholder, I would certainly stay in tune with the Morton music. And I would not attempt to dissuade any investors from buying - providing they have the courage, in this uncertain world, to take a relatively long-term view of, say, a few years.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at

Arts and Entertainment
Louis Theroux: By Reason of Insanity takes him behind the bars again
tvBy Reason of Insanity, TV review
Arts and Entertainment
Cassetteboy's latest video is called Emperor's New Clothes rap
videoThe political parody genius duo strike again with new video
Stephen Hawking is reportedly taking steps to trademark his name
Seth Rollins cashes in his Money in the Bank contract to win the WWE World Heavyweight Championship
WWERollins win the WWE World Heavyweight title in one of the greatest WrestleMania's ever seen
Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Retirement Coordinator - Financial Services

    Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

    Recruitment Genius: Annuities / Pensions Administrator

    Negotiable: Recruitment Genius: You will be the first point of contact for all...

    Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

    £18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

    Ashdown Group: Learning and Development Programme Manager

    £35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

    Day In a Page

    No postcode? No vote

    Floating voters

    How living on a houseboat meant I didn't officially 'exist'
    Louis Theroux's affable Englishman routine begins to wear thin

    By Reason of Insanity

    Louis Theroux's affable Englishman routine begins to wear thin
    Power dressing is back – but no shoulderpads!

    Power dressing is back

    But banish all thoughts of Eighties shoulderpads
    Spanish stone-age cave paintings 'under threat' after being re-opened to the public

    Spanish stone-age cave paintings in Altamira 'under threat'

    Caves were re-opened to the public
    'I was the bookies’ favourite to be first to leave the Cabinet'

    Vince Cable interview

    'I was the bookies’ favourite to be first to leave the Cabinet'
    Election 2015: How many of the Government's coalition agreement promises have been kept?

    Promises, promises

    But how many coalition agreement pledges have been kept?
    The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

    The death of a Gaza fisherman

    He built his own reef, and was fatally shot there by an Israeli gunboat
    Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

    Saudi airstrikes are fuelling the Gulf's fire

    Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
    Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

    The only direction Zayn could go

    We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
    Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

    Spells like teen spirit

    A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
    Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

    If fashion is a cycle, this young man knows just how to ride it

    British designer Jonathan Anderson is putting his stamp on venerable house Loewe
    Number plates scheme could provide a licence to offend in the land of the free

    Licence to offend in the land of the free

    Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
    From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

    From farm to fork in Cornwall

    One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
    Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

    Robert Parker interview

    The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
    Don't believe the stereotype - or should you?

    Don't believe the stereotype - or should you?

    We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor