Star performer was the Pacific division, where profits rose 46.6 per cent to pounds 7m on the back of a rise in margins from 8.7 to 10.6 per cent. This helped to limit a fall in overall group margins to 8 per cent from 8.1 per cent. South Africa contributed an extra 39 per cent to profits, helped by restocking and foreign exchange gains.
The real problems lie in the US, where the previous year's pounds 2.2m was turned into a pounds 200,000 loss. While the economy is awful, a pounds 1.1m restructuring charge did not help. The company's outlook hinges on how well US operations perform. And although demand there is picking up, Michael Ost, chief executive, would say only that he was 'hopeful' of the division returning to profit this year.
At home McKechnie's link to the housing and automotive markets makes the future uncertain. The 10 per cent rise in UK profits to pounds 13.7m was largely due to a 10- week contribution from Savage, the do-it-yourself products company bought for pounds 47.3m.
On forecast profits of pounds 31.5m for this year the shares, which closed at 432p, are on a prospective multiple of 17.4, a 20 per cent premium to the market and good value for a company with better-than-average growth prospects.