Bottom Line: ECC confidence looks well placed
Tuesday 15 March 1994
Recovery in construction is likely to outpace that in the paper industry, in the short term at least. The shares of the combined group are already on a historic multiple of 25, although given the heady multiples of rival building materials groups, there may be scope for some improvement in the rating of Camas - as the demerged business will be called.
That may, however, be limited if ECC goes ahead with its plan to land Camas with a 3.75p dividend. Camas's earnings last year were probably about 2.3p allowing for the extra costs of the demerged business. It will take a dramatic recovery in profits for that to be even once covered this year.
The same, of course, is true of the minerals business, which will form the core of the continuing ECC. While operating profits in materials, before exceptionals, rose pounds 1.4m to pounds 16.9m, minerals dipped from pounds 91.8m to pounds 74.4m, accounting for the lion's share of the drop in group pre-tax profits from pounds 100.2m to pounds 88.1m.
An increase in the tax charge now that the losses which benefited last year's bill have been used up meant earnings fell more sharply, from 26.72p to 20.45p.
Mr Teare is pleased to have secured a 'very small' price rise in parts of Europe and, with paper volumes up 3.5 per cent, his confidence that this will hold looks well placed. He is working hard at boosting the volumes of Calgon, the speciality chemicals business acquired last June.
More optimistic analysts think post-demerger profits could hit pounds 96m this year, giving earnings of 22.2p - sufficient to cover its share of a maintained 20p dividend. That is enough to justify buying the shares, regardless of Mr Teare's caution on the demerger.
- 1 Humans of New York image of crying gay teen receives best response yet from Ellen DeGeneres
- 2 What supermodels really think about posing in the nude
- 3 North Korean defector flees to Finland 'with evidence of chemical testing on humans'
- 5 Swedish minister gives strongest case yet on why EU should stop turning away asylum seekers
Humans of New York image of crying gay teen receives best response yet from Ellen DeGeneres
Greece debt crisis explainer: A history of just how the country landed itself in such a mess
North Korean defector flees to Finland 'with evidence of chemical testing on humans'
Swedish minister gives strongest case yet on why EU should stop turning away asylum seekers
Isis schoolgirl Amira Abase who fled London to join terrorists in Syria mocks victims of Tunisia massacre
More Britons believe that multiculturalism makes the country worse - not better, says poll
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Greece crisis: IMF was pushed around by Angela Merkel and Nicholas Sarkozy – and now it is being humiliated
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Osborne to cap family benefits at £23,000 – announced ahead of his post-election Budget
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
iJobs Money & Business
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...
£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...
£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....
£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...