Bemrose seeks pounds 19.5m to finance purchase of US calendar printer

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BEMROSE, the printing group, is acquiring McCleery-Cumming, the second-biggest advertising calendar printer in the US, for dollars 27m cash, writes Neil Thapar.

The deal is being financed by a pounds 19.5m rights issue, the company's second this year.

The one-for-four cash call is priced at 325p a share, against yesterday's closing price of 427p, up 42p.

Bemrose forecasts a leap in taxable profits, before exceptional credits, from pounds 6.25m to pounds 10m for the year to 1 January. Earnings per share will amount to at least 27.9p, against 22.18p, after adjusting for the pounds 21m rights last March. The company intends to pay a final dividend of 7.45p making a total of 11.75p, up from 10.73p.

Bemrose said that McCleery, which also owns the rights to print and distribute Playboy calendars, was an 'excellent fit' with its operations in the US, where it is the third-biggest printer of promotional calendars.

About two-thirds of McCleery's sales come from the George Washington range of calendars sold through 3,000 distributors. The rest are tailor-made designs for clients such as Ford, Wal-Mart and Texaco.

In the three years to 28 February, annual pre-tax profits rose from dollars 4.8m to dollars 5.1m, on virtually unchanged turnover of dollars 32m. Its net assets, which amounted to dollars 8.5m, include a 20-acre manufacturing site in Washington, Iowa.

The business, being sold by four owners who are retiring, is expected to enhance Bemrose's earnings.

Rodger Booth, Bemrose's chief executive, said: 'We didn't plan to make two rights issues, but this is a tremendous opportunity.'