BPC plans to raise pounds 250m in flotation

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The Independent Online
BRITISH Printing Corporation, bought out by its management from Maxwell Communications Corporation five years ago, is planning a stock market flotation that is expected to value it at about pounds 250m.

The move is partly aimed at bolstering BPC's balance sheet, which has been saddled with large debts ever since its pounds 237m buyout in January 1989. At that time MCC was being run by Robert Maxwell, the disgraced publisher, whose death a year later led to the collapse of MCC.

Led by John Holloran, BPC's chief executive, the buyout was financed with pounds 217m debt and the balance in equity by Electra and Candover, the venture capital groups.

But a severe recession in the printing industry forced the company into two subsequent equity injections totalling pounds 65m. With an average annual interest charge of pounds 25m, the group has struggled to break even and incurred a pounds 5m taxable loss in 1992.

Although 1993 results have not yet been announced, the group made an operating profit before exceptional items of pounds 19m on sales of pounds 318m for the year to 31 December. Net debts amounted to about pounds 170m at the year end.

The problems also diluted the equity held by BPC's management and staff from 11 to 5 per cent.

'Unfortunately, the buyout was done at the top of the market,' Mr Holloran admitted yesterday.

The flotation, through a placing and offer for sale sponsored by Schroders, the merchant bank, will greatly cut borrowings.

BPC, Britain's biggest commercial printer, has been restructured since the buyout to cover magazines and catalogues, cartons and labels and books and journals.

It prints some of the biggest-selling magazines in the UK such as Radio Times and Woman's Own. The group's customers includes Reed Elsevier, Reader's Digest, the BBC, Argos, Unilever, Gallaher, Nestle and Heinz.

It has also undergone a pounds 110m capital expenditure programme and operates from 25 locations with a 5,100-strong workforce.

'These initiatives have been important in enabling the group to increase sales per employee by 36 per cent in four years,' Mr Holloran said. He said that the group was seeking a listing at a time when trading conditions were improving. 'There are good signs that the advertising market is picking up.'

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