Fine Art profits defy recession: Shareholders see rise in pre-tax profits and payout

FINE ART Developments, the greetings card and mail order group, continued to defy the recession in the year to March, with pre-tax profits rising 16 per cent. Shareholders, who have seen their shares rise steadily from 179p in 1990 to 552p at yesterday's close, were rewarded with a similar increase in the dividend.

Keith Chapman, the chairman, said: 'Economic indicators suggest that consumer confidence is returning, albeit slowly. In the teeth of the recession the group has made substantial investments and is now in a much stronger position.'

Home shopping shrugged off difficult trading conditions, posting a 10 per cent improvement in operating profits from sales 14 per cent higher. The Christmas hamper business was the star performer and Mr Chapman said that further growth this year was 'virtually assured'.

Express Gifts, which sells cards, toys and inexpensive jewellery through catalogues, saw more orders although their value had fallen. Creating catalogues for charities was particularly affected by the recession, with sales falling 5 per cent.

The greetings card division saw a small increase in pre-tax profits to pounds 20m from sales of pounds 140m. A new central distribution depot opened at Brighouse, Yorkshire, and for the first time Papertree, the retail chain, made a profit.

Group pre-tax profits rose from pounds 29.7m to pounds 34.4m on sales 8 per cent higher at pounds 312m. Earnings per share were 19 per cent better at 30.3p and a final dividend of 9.75p makes a total for the year of 12.75p, up 16 per cent.

Analysts, who have watched Fine Art increase its profits throughout the recession, said yesterday that its success reflected dominance of niche markets, tight cost control and strong cash flow.

County NatWest expects pre-tax profits this year to move ahead to pounds 40.5m, putting the shares on a prospective p/e of 16.