It attributed the surprisingly strong 33 per cent increase, with turnover up only 7 per cent, to the beginning of the end of the recession and strict cost controls. The share price jumped 55p to close at 528p.
The health of Denmans' electrical wholesale business, accounting for most of its turnover, depends on the state of the construction industry. John Moulton, finance director, said some areas were still depressed.
However, Denmans sells mainly to smaller firms, such as private house builders, which are harvesting the fruits of recovery first.
A second sign of an improving trading climate was the fall in the level of bad debt provisions from an exceptionally high 1.5 per cent of turnover the previous year, saving nearly pounds 200,000.
Although the market is highly competitive, Denmans has been extremely successful in developing relationships with large retailers, according to Albert E Sharp, the broker, whose analyst rates Denmans good value on the current price-earnings ratio of just over 17.Reuse content