Allied buys American firms: Textile company spends 52m pounds to gain base across the Atlantic

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The Independent Online
ALLIED Textiles, the Huddersfield-based spinner, weaver and dyer, is to spend pounds 52m buying two North American companies.

Allied is issuing pounds 27m of new shares at 500p, by a placing and open offer. It is paying pounds 17m for Cleyn & Tinker, a Quebec maker of woollen clothes, and pounds 10m for Carleton, a US weaver. The deal will also use up Allied's pounds 25m cash pile as debts are paid off.

John Corrin, chief executive, said the company needed a base across the Atlantic to circumvent North American import tariffs. 'We export to 45 different countries but the US is our 43rd largest export market. As it is one of the largest economies on the globe, we need to redress the balance.'

For the year to 30 September, Allied's pre-tax profits rose 8 per cent to pounds 13.7m. Earnings per share jumped from 30.8p to 33.2p. The dividend has been increased to 12.9p from 12.6p.

Turnover fell slightly from pounds 129m to pounds 127m, because Allied closed a small, loss-making subsidiary. Mr Corrin said group sales would be pounds 210m once C&T and Carleton were integrated.

Barclays de Zoete Wedd, Allied's stockbroker, is forecasting a taxable profit of pounds 17.4m for the year to next September, equivalent to earnings per share of 37p.

The company has spent pounds 36.5m on capital expenditure projects since 1990, which has enhanced operating efficiency. The operating profit margin has grown to 7.6 per cent from 6.7 per cent.

C&T and Carleton both lost money in 1990 but provisional figures for 1993 suggest C&T will triple profits to Cdollars 2m ( pounds 1m) and Carleton's earnings will rise 30 per cent to dollars 3.6m ( pounds 2.4m).

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