Caradon ahead 70% after year of change

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The Independent Online
Caradon, the building products and security printing group, yesterday celebrated a year of transition with a 70 per cent jump in pre-tax profits to pounds 213.4m.

The results reflected the disposal a year ago of its 25.3 per cent stake in CarnaudMetalbox, the packaging group, together with the purchase of Pillar, the building materials business, from RTZ for pounds 808.7m in November.

'This was a year in which major steps were taken to reshape the group, which gives us excellent opportunities for further developing our business,' said Peter Jansen, chief executive.

The CMB sale produced a pounds 100.3m profit, although that was offset by pounds 19.1m of provisions for property and business disposals. Caradon said that pre-tax profits, before these exceptionals, rose 5 per cent to pounds 132.2m.

That included a contribution of about pounds 15.2m from Pillar as well as pounds 4m from Checks in the Mail, a US cheque printer acquired in May. There was also a pounds 10.3m gain on currency fluctuations.

Mr Jansen said the group was 'very happy' with what it had found at Pillar. It has, however, shed 44 management jobs, or 20 per cent of the combined head offices, as the two businesses were merged. There will be further rationalisation and redundancies and a pounds 43.8m provision has been established.

Excluding Pillar, profits from the group's British building products business rose 1 per cent to pounds 35.4m, on sales up 8 per cent at pounds 417.3m, as prices remained depressed. Price increases in some of the group's ranges this year appear to be sticking. The European building products division also suffered price pressure, although profits were held at pounds 18.9m.

The Pillar acquisition required a pounds 430.8m write-off of goodwill, which meant that net assets fell from pounds 525.1m to pounds 484.1m despite a pounds 334m rights issue. Borrowings at the end of the year were pounds 36.4m, down from pounds 44.9m last time.

Earnings per share were 31.3p, or 15.2p excluding exceptionals, compared with 15.2p last time. The dividend is 6 per cent higher at 8.79p, via a 6.08p final. The shares dropped 9p to 374p.