Acquisitions help to boost BPI to a record pounds 15.4m

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The Independent Online
ACQUISITIONS and better trading conditions in the second half of the year helped take pre-tax profits at British Polythene Industries to a record pounds 15.4m in 1993. Turnover rose by a fifth to pounds 212m, and Cameron McLatchie, chairman, said sales would exceed pounds 250m in 1994.

Mr McLatchie said: 'We see the pattern of growth of the past two years continuing. We are in discussions about four or five potential acquisitions at the moment and will probably buy a couple of them.'

During the past 12 months, BPI has bought eight businesses for a total of pounds 20.4m, but gearing fell from 36 per cent to 29 per cent at the year-end thanks to last March's rights issue.

The company is building a joint venture manufacturing plant in China to supply lightweight, labour-intensive products to the UK at prices up to 20 per cent below current levels.

Profit margins improved during the year, particularly in the acquired companies. Mr McLatchie said: 'Although we have shown the underlying quality of our business during a recession, it will take continued economic recovery before we can realise our further potential.'

Analysts' profit forecasts are around pounds 17.5m for 1994. Half of BPI's sales are directly or indirectly to the food retailing chains. Will Wallis, an analyst at SG Warburg, said pressure from the retailers could limit further improvements in margins.

Earnings per share rose from 25.22p to 28.39p, and the dividend increased 15 per cent to 11.5p for the year. The shares closed 7p higher at 501p.

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