Better than expected annual results coupled with an upbeat statement on prospects lifted the depressed share price of Courtaulds Textiles by 10p to 426p. Profits before tax were £47.3m, up 22 per cent from the previous year and around £2m higher than most analysts' forecasts.
The City was also heartened by a 5.6 per cent increase in the dividend total to 15p a share, with the final payment rising from 9.5p to 10.1p. The dividend is more than twice covered by earnings per share, which rose 15 per cent to 33.7p.
Noel Jervis, chief executive, said: "The profit advance demonstrates the benefits of past rationalisation, continuing operational improvement and the integration of acquisitions." While he was confident about 1995, he did inject a note of caution about increasing raw material prices.
Operating profit margins improved in all five divisions, and for the whole company rose from 4.4 to 5.2 per cent on sales up from £955.5m to £1.053bn.
The best margin improvement was in branded clothes, which recovered from a tiny 0.3 per cent to 2.5 per cent, aided by better results from Aristoc and the first-time contribution from the Well hosiery business.
Profits of £7.1m, up from £600,000, in branded clothing would have been even better but for "the continuing unsatisfactory" performance of both Georges Rech and Contessa. Own-label clothing raised profits from £16.3m to £17.6m. There was a mixed performance in the Marks & Spencer business, with increases in several areas offset by reduction in others.
Profits from fabrics rose from £19.9m to £25.5m, while home furnishings' contribution was up from £3.7m to £4.1m despite tough market conditions. Earnings from spinning advanced from £1.4m to £2.2m, reflecting sales of higher margin products.