Berisford feels the heat
The Investment Column
Tuesday 11 June 1996
From a low of 48p when a new management team came on board in 1992, the shares touched 260p last year as the company bounced back into the black for the first time since 1989 and resumed dividend payments. The improvement continued into the first half, with pre-tax profits rising by 7 per cent to pounds 11.9m and the payout jumping 50 per cent to 1.5p.
But the two legs on which the Berisford bandwagon now stands - kitchen and joinery division Magnet and US commercial-oven maker Welbilt - look a bit wobbly.
Magnet, bought for pounds 58m two years ago, remains very exposed to the fragile UK housing market. In the six months to March, housing starts fell 16 per cent while transactions were 13 per cent lower on the same period a year ago. Building products also suffered, sending the division's operating profits down to pounds 2.3m from pounds 6.5m on sales of pounds 92.9m (pounds 94.5m). Prospects for building products in the UK remain depressed, though there are the first tentative signs of an increase in domestic kitchen sales.
Welbilt, picked up for pounds 198m last year, fared better. It almost tripled profits to pounds 18m as turnover soared to pounds 140m from pounds 46.5m. Piggy-backing on the expansion of fast-food restaurants ought to make sense, but even here Berisford cannot expect a smooth ride.
While the chains continue to go from strength to strength at the expense of traditional eateries, price competition in oven ranges, the core product, is intensifying. Berisford is switching to fryers, grills, steamers and microwaves, but the transition will incur a pounds 1.6m cost this year.
In-fill acquisitions in bedroom products and PVCu plastics are earmarked, though chief executive Alan Bowkett is unhappy about some of the prices being asked.
Pre-tax profits of pounds 33m put the shares, down 15p to 202p yesterday, on a forward multiple of 13, yielding 3.1 per cent. Unattractive.
Fracking is turning the US into a bigger oil producer than Saudi Arabia
Missing Malaysia Airlines plane: Details emerge of two young Iranians using stolen passports in search for a better life
Three-quarters of Britons are saying it wrong - the top ten most common mispronunciations
Oscar Pistorius trial: Athlete's friend asked him if 'he was f***ing mad' after shooting through sunroof
Oscar Pistorius trial: Forensic analyst says athlete 'was not wearing prosthetic legs' when he shot Reeva Steenkamp through locked door
Britain's top vet sparks controversy with call for ban on slashing animals' throats in 'ritual' slaughters for halal and kosher meat products
Exclusive: Impact of immigrants on British workers ‘negligible’
Katie Hopkins continues campaign to become Britain's most hated talking head with poorly timed Bob Crow tweet
Grace Dent: Who cares if she spells it Barraco Barner? Gemma Worrall is more employable than some bookish arts graduate
Ukraine crisis: Russia pledges to 'retaliate against sanctions' as Ukrainian president says Crimea vote will not be recognised
The quiet diplomat: Catherine Ashton - recognised and admired in all the world’s troubled countries, yet ridiculed at home
- 1 Three-quarters of Britons are saying it wrong - the top ten most common mispronunciations
- 2 Boy George: Bad karma
- 3 Grace Dent: Who cares if she spells it Barraco Barner? Gemma Worrall is more employable than some bookish arts graduate
- 4 First Kiss video: Filmmaker gets 20 strangers to make out on YouTube with awkward results
- 5 Ian Wright breaks down in ITV documentary charting his rise to Arsenal and England striker
iJobs Money & Business
£57000 - £77000 per annum + Benefits: Pro-Recruitment Group: Top 10 Specialist...
£350 - £450 per day: Harrington Starr: Harrington Starr are currently working ...
£40000 - £60000 per annum: Harrington Starr: Application Support - FIX protoco...
£45000 - £60000 per annum: Harrington Starr: Application Support - OMS/EMS, FI...