450% profits surge at Ransomes lifts shares

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The Independent Online
SHARES in Ransomes, the lawnmower company, jumped 40 per cent after a change of fortunes in the US helped to lift profits 450 per cent, writes Robert Cole.

Ransomes, under new management, has reduced costs and re-organised its product range. The recovery in the US economy also fuelled a surge in demand.

Overall pre-tax profits increased from pounds 1.2m to pounds 6.7m for the six months to 2 July. The shares closed 12p higher at 42p.

Ransomes also broke one of the last remaining links with its previous management when Geoffrey Comer, the finance director who had been with the group since 1989, resigned. He was paid pounds 90,000 a year and had a three-year rolling contract. The company said it was still negotiating the details of Mr Comer's pay-off.

Peter Wilson, formerly of BTR, was appointed chief executive last October. At the same time John Clement, previously chairman and chief executive of Unigate, became chairman.

The growth in profitability means interest on the company's debt is covered 2.6 times by operating profit, up from 1.3 times. However, the ratio of debt to net assets remains high at 450 per cent.

Ransomes' earnings of 4.5p a share compared with losses of 4.4p. There is no ordinary dividend but the company will pay the preference share dividend.

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