Cooker maker to raise £5m

William Gleeson
Tuesday 09 May 1995 23:02 BST
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BY WILLIAM GLEESON

Stoves, the Merseyside-based cooker manufacturer,plans to raise £5m on the stock market early this summer in order to pay off debenture loan stock held by venture capitalists since a 1989 management buy-in.

The new investors will hold 20 per cent of the company's stock, implying a market value between £35m and £40m.

The move comes at a time when the number of companies listing on the market has fallen off compared with the previous year.

Stoves is owned by five of the company's managers as well as venture capitalists, including Candover and CINVen. The directors, who own a third of the shares, are selling between 10 and 15 per cent of their holding to create some liquidity in the market for Stoves' shares.

The company made profits for the year to the end of May 1994 of £2.1m on turnover of £41.8m.

As well as paying off the debenture stock holders the money will be used to boost the company's cash at bank. Stoves plans to grow organically. It is not looking for acquisitions.

Sean O' Connor, chairman, said there were opportunities to expand into built-in units and electric free-standing cookers. The company has agreed a contract to supply cookers to the Italian market and hopes to gain new business in France and Germany as well as Australia.

A market capitalisation of £40m implies the 33 per cent stake held by management has a value of more than £13m. At the time of the buy-in management put up £150,000.

The number of new issues has fallen off this year due to uncertainties about the direction of the stock market. However, Mr O'Connor said: "We are selling a bit of our shareholding to help with making the market. We are not walking out, we have been in no rush to come into the market. We could have come at any time. The price of the flotation is less relevant than the fact we are moving on to the next stage of our development."

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