Bottom Line: Casket pedals into profit

Three years ago Casket, the bicycle maker, was almost bust, a 100-year-old mishmash of 14 textiles companies with gearing of 130 per cent. In the year to March 1990 losses amounted to pounds 3.2m.

Enter new management under Joe Smith, chief executive, and some strategic backpedalling. Yesterday's pounds 2.85m profit, up from pounds 2.1m before the previous year's exceptionals, vindicated the drastic action taken by the new team. Earnings per share doubled and shareholders were rewarded with a 60 per cent increase in the dividend.

The focus of Casket has shifted to bicycles, where the company can now boast 25 per cent of the UK market, second only to Raleigh, whose lead has been narrowed considerably.

Casket has an impressive portfolio of brand names, including Falcon, Eagle, Claud Butler and Townsend, and sells 600,000 bikes a year. A high- profile marketing deal with Lotus brings a road version of Chris Boardman's Olympic gold-winning Monocoque bike into the Casket stable.

Profits of pounds 4m this year look likely, putting the shares on a prospective p/e of 12 at the current 42p. Good value.