Bowthorpe surges through US deals

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The Independent Online
ACQUISITIONS in the US have fuelled a 14 per cent increase in profits at Bowthorpe, the electrical components maker.

The company made pre-tax profits of pounds 31.2m in the six months to 30 June, up from pounds 27.6m. Much of the advance was attributable to growth in the US, where the company spent dollars 50m ( pounds 32m) on three acquisitions between May and December 1993.

Operating profits in the US rose 26 per cent to pounds 11.6m on sales up 56 per cent to pounds 80.6m. Colin McCarthy, finance director, said that organic growth in the US businesses was 17 per cent.

The US operations have now overtaken Continental Europe as Bowthorpe's biggest contributor.

Operating profits from the Continent, where recession has given Bowthorpe problems in the past two years, were up 7 per cent at pounds 9.4m. John Westhead, chief executive, said: 'Continental European operations have shown an improvement as the anticipated recovery has begun to take effect.' Operating profits in Britain rose 19 per cent to pounds 8.2m.

The shares were unchanged at 305p yesterday but are trading below the 320p price at which the company raised pounds 65m in a rights issue in January. The one-for-eight rights issue diluted the advance in earnings per share, which rose 4 per cent to 9.2p. The dividend is also up by 4 per cent at 1.96p.

Although the cash call was made to fund an extended programme of acquisitions, most of the money remains unspent and the company has net cash of pounds 35m.

Dr Westhead said the company looked at about 300 acquisition possibilities a year but bought only when it was sure the target would benefit the group. He added: 'The search for niche businesses continues.'