Candover advances through gloom

CANDOVER, the investment group that specialises in funding management buyouts and buy- ins, painted a bleak picture of the economy yesterday as it reported increased interim profits.

Roger Brooke, the chairman, said it was 'a most difficult business environment'. He also said: 'Expectations of recovery have been frequently deferred with official forecasts proving over- optimistic.'

Candover invests money itself but also manages much larger funds. Two-fifths of its assets are in cash, partly as money rolled in from liquidated investments, and partly because it is struggling to find suitable companies to back.

Candover invested in Kenwood, the household electronic gadget company, and Anglian Windows, both of which were floated on the stock market early in the summer.

Many companies in which Candover invests are hived off from larger concerns. In the first six months - a period that included the post-general election optimism - Mr Brooke said there were few opportunities for investment. This was because large companies were waiting to see if the end of recession would mean they could get better prices.

Mr Brooke said he presumed more opportunities were being presented now because larger companies needed to raise cash and could not see an end to the slump.

Candover has pounds 100m yet to invest from the fund it raised in 1989, and pounds 30m from its 1991 fund. It is not trying to raise any money at the moment.

At 30 June net assets were 3 per cent ahead of 31 December. In the year to 30 June assets per share rose 7.7 per cent compared to a 4.7 per cent rise in the FTA All- Share Index. Pre-tax profits, helped by fees from investment management, were pounds 2.3m against pounds 2.1m last time. The dividend is 3.75p, up from 3.5p.