Bottom Line: Haynes' new leaf

HAYNES Publishing has come a long way in the last three years. A one-third cut in its workforce, tighter stock control and closure of peripheral operations has helped it to eliminate the pounds 3.5m of debt - half its net assets - that was dogging its performance.

It ended the half-year to 30 November with pounds 2.4m on deposit even after pounds 1.4m of capital expenditure.

The benefits are also showing through in profits, which rose 40 per cent to pounds 2.1m - including pounds 170,000 of currency gains - as it made the most of its 90 per cent share of the UK market for car manuals and its growing domination in the US.

It has tripled its market share in the US to 54 per cent in five years, but hopes to expand that further through initiatives like producing Spanish manuals from its recently built print plant in Nashville, Tennessee. In-house printing will also mean that stocks can be kept to a minimum.

Haynes should also benefit from the growth in new car sales - 1.5 million in Britain last year - that tends to spark the purchase of Haynes manuals.

The fledgling French business is unlikely to make money this year, or for the best part of 1994/5. The potential, though, is big and the management's estimate of annual sales of 1 million manuals is not unrealistic.

Growth here and in the US, however, should help Haynes drive forward to profits of pounds 4.9m for the year and a conservative pounds 5.6m for the 12 months to May 1995.

The one remaining quibble is the loss-making operation in the general publishing of books on modes of transport. While it should return to the black in about a year, questions remain about its long-term role.

Haynes shares at 490p, down 8p, are trading on a price/earnings ratio of 25 for this year and yield 2.2 per cent, assuming a 5p final will follow the 4p interim. The shares, which touched 83p at the height of the company's problems in 1991, are fully valued.