BICC pounds 170m cash call surprises City
Friday 20 September 1996
Alan Jones, chief executive, said: "It will put the whole business on a much sounder footing. I have come under tremendous pressure from our managers on a number of investments we want to make. It is right to persevere with our programme."
BICC's two-for-11 cash call at 270p will help fund investment opportunities at home and abroad worth pounds 215m.
The company plans to spend about pounds 140m on higher-margin optical fibres, data communications cables and high-voltage cabling. Another pounds 40m is earmarked for the Asia-Pacific region while pounds 35m will go to fund the Government's Private Finance Initiative scheme where its Balfour Beatty division is already involved in pounds 186m of road projects.
Although the money raised will be used to fund expansion, Mr Jones said the immediate effect would be to reduce the level of gearing from 80 to 30 per cent. "I like to think I am a grower of business," he added. "But they have to achieve a 20 per cent return on assets and be companies that lead their markets. That said, I do see myself as being a bit tight with cash."
Since arriving last year from Westland, the helicopter manufacturer, Mr Jones has undertaken a strategic review of BICC. In the year to June BICC set aside a total of pounds 107m for reorganisation, rationalisation and related asset write-down in its cables activities.
One of the actions taken by Mr Jones was to halve the workforce at its German low-voltage cable subsidiary.
In August BICC reported a half-year loss of pounds 2m against a pounds 60m profit last year due to hefty restructuring costs. Analysts expressed concern then that as national utility and telecom companies were privatised, cosy relationships with cable suppliers would end.
They felt the tough pricing climate could continue for up to two years, leading players like BICC to concentrate on higher-margin products.
BICC also said it was likely to maintain the final dividend at 8.5p, taking the year's total to 12.5p.
The cash call has been underwritten by Schroders. Cazenove and the corporate finance division of Hoare Govett are joint brokers to the issue. Dealings in the new, nil-paid shares will start on 20 September.
Comment, page 21
Diving in at the deep end is no excuse for shirking the style stakes
- 2 PornHub begs users to stop uploading video clips of Brazil getting beaten 7-1
- 3 Why I'm on the brink of burning my Israeli passport
- 4 L'Oreal cuts ties with Belgium supporter Axelle Despiegelaere after hunting trip photographs
- 5 The true Gaza back-story that the Israelis aren’t telling this week
Game of Thrones author George RR Martin says 'f*** you' to fans who fear he will die before finishing Westeros saga
Loom bands: Bids for dress made from colourful rubber pass £170,000 on eBay
Supermoon 2014: When and why will the moon look bigger and brighter this summer?
Gaza-Israel conflict: The terrible price Palestinian children are paying for Israel’s war with Hamas
Rotten egg smell could help battle heart disease and Alzheimer's
Sustained immigration has not harmed Britons' employment, say government advisers
War is war: Why I stand with Israel
7/7 memorial defaced on anniversary of 2005 attacks with ‘Blair lied thousands died’ graffiti
Australia facing international condemnation after turning around Sri Lankans at sea
Even when it brutalises one of its own teenage citizens, America is helpless against Israel
Socialist Worker called to apologise over ‘vile’ article saying Eton schoolboy Horatio Chapple's death is ‘reason to save the polar bears’
iJobs Money & Business
£70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...
£75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...
£60000 per annum: Harrington Starr: Trade Desk Specialist (FIX, Linux, Windows...
£35000 per annum: Harrington Starr: Service Desk Analyst (Windows, Active Dire...