Finelist sells cash and carry business for pounds 68m

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FINELIST, THE car-parts distributor, yesterday announced the pounds 68m sale of its non-core cash and carry wholesale business Maccess, pocketing a profit of pounds 35m after two years of ownership.

Shares in the group dropped 11.5 per cent to close at 172.5p as analysts lowered pre-tax profit estimates for the year to June 2000 to pounds 22.5m - pounds 23m from pounds 34m - pounds 35m.

Chris Swan, chairman and chief executive of Finelist, denied criticism the group had expanded too quickly and was forced to sell the Maccess division to focus on core activities.

However, he admitted that the sale was the only way for the group to go forward in the current climate.

"The City said it didn't like highly geared companies. The environment is such that we can't raise equity through shares or put more debt into the business. Our view is based on the available funding structures. It's the same for another 2,000 companies," he said.

"We'll attack properly on three fronts and we've got the capital to do so," he added.

Barclays Private Equity financed the purchase and will retain the Maccess management team to run the group, including Tim Dean, the managing director.

Analysts said the deal was seen as a high price for Maccess, representing around half of Finelist's pounds 161m market capitalisation for a business which generated less than 20 per cent of its profits.

None the less, Barclays said it believed that the business, which made operating profit of pounds 7.7m on pounds 81m sales for year to June 30 1998, was well worth the price.

Maccess employs 700 people across its 24 UK branches and in its Warrington- based distribution centre.