Currency upheaval gives a lift to MAI
The group's moneybroking arm, Butler Harlow Ueda, has enjoyed an exceptional week, though it has not shown the massive profits some of the banks have made as it does not take positions in the currency markets.
Lord Hollick, who is chief executive of MAI, says Butler is looking forward to a good first half of 1992-93, with continued turbulence in the currency markets and falling interest rates, which increase demand for the debt securities traded by Butler.
Low US interest rates provided the good news in the year to 30 June, helping Butler to increase profits by pounds 4.4m to pounds 44m.
This led to a 7 per cent increase in MAI's pre-tax profits to pounds 71.2m. Earnings per share rose 9 per cent to 13.7p and a final dividend of 4.6p gives a total of 6p (5.5p).
The figures were held back by another fall in the contribution from Avenir, the French media group in which MAI still has a 15 per cent stake. The recession was responsible for the fall from pounds 6.6m to pounds 2.2m. Avenir is at present going through a rationalisation and Lord Hollick said he thought it had reached its nadir.
There was good news from Wagon, which specialises in second hand car finance, where bad debts fell, and from the market research business, where the merger of NOP and MIL has gone well in the UK. However, the group's insurance broker, Safeguard, had a poor year and is being restructured.
The group is the backer of Meridian Broadcasting, which won the independent television franchise in the TVS region and has invested pounds 15m out of pounds 30m it ultimately expects to invest in the business. MAI has a 51 per cent holding in Meridian but does not expect any contribution to its profits until at least 1993-94.
MAI is in the midst of a pounds 75m investment programme spread across its business, but such is the cash generation of its businesses that it does not expect the programme to dent the balance sheet, which has pounds 100m of net cash.
The City is anxious to see how this money is spent and points to the 13 per cent stake it has in the debt collection group Intrum Justicia. But Lord Hollick has said he is in no rush to spend the money and has given no indication about moves on Intrum.
Karen Neale, financial companies analyst at Barclays de Zoete Wedd, expects MAI's profits to rise to pounds 80m this year. Its shares rose 2.5p to 126.5p.
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