Bibby soars on doubled profits

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The Independent Online
Shares in J Bibby rose by 13 per cent to 96p yesterday after the industrial group unveiled doubled first-half profits and an increased dividend. The driving force was the capital equipment division, which turned a loss into a pounds 3.5m profit. Group pre-tax profits for the six months to March improved from pounds 7.2m to pounds 14.2m on sales up 14 per cent to pounds 343m.

Bibby has been hampered by the disastrous performance of Finanzauto, which controls the Caterpillar machinery franchise in Spain. Bought for pounds 86m in 1992, it managed to lose pounds 18m only a year later. Last year, however, the Iberian operations turned in a profit of nearly pounds 4m, with the Caterpillar operations helped by strong demand for public works and mining equipment in Spain. Labour disputes in Spain have been resolved.

Bibby is moving out of agricultural activities and sold both the loss- making Twyford Seeds and Twygen during the first half for pounds 1.7m. Part of the industrial division was sold to API in April for pounds 4.6m.

Overall the industrial division achieved profits only marginally ahead of last time, held back by a weak performance from Bibby Paper. which was affected by rising raw materials prices. As a result margins have been squeezed. The sale of the Rochdale foil laminating business will enable Bibby Paper to concentrate on specialist markets such as vacuum dust bags.

In materials handling, operating profits rose sharply, helped by good performances from the Hyster lift truck dealerships. The UK market is now climbing out of recession and the southern US states are also proving a growth market.

Sales in the capital equipment division increased by 31 per cent.

The interim dividend was increased from 1p to1.75p.