FKI strengthens e-commerce link with pounds 228m American acquisition
Thursday 16 December 1999
The $368m (pounds 228.6m) cash purchase of Pinnacle Automation will be added to FKI's Logistex division, which provides supply chain solutions used by Internet retailers, postal services and other distributors to send out goods and letters. The acquisition takes the share of FKI turnover from Logistex to almost 30 per cent, on a pro-forma basis.
Michael Blogg, an analyst at Charterhouse Securities, said: "E-commerce businesses will need to invest in hardware and those that can provide this will do very well. FKI is moving in this direction and very quickly. The growth rates in this division [Logistex] will be way above its other businesses."
The Pinnacle move is the third acquisition FKI has made in the materials handling sector in 1999, taking its spend on this activity this year to pounds 447m. The company's shares rose 6.5p yesterday to 195p on the news.
However, the purchase almost doubles FKI's gearing to 160 per cent. Analysts said that the company's strong cash flow and sale of non-core businesses should bring this level of debt down.
Steven Jones, FKI's director of corporate planning, said that interest cover was not a problem, at over five times. He said that news on disposals was likely in the next three to six months.
He said: "We have found an area of e-commerce that we know something about. There is long-term growth in these businesses. It's bigger in the US right now but it will spread to Europe in the next three or four years."
In the nine months to 30 September, Pinnacle had turnover of $282.6m, with 28 per cent of sales directly to "dot.com" businesses. Operating income for the period jumped 65 per cent, compared to the equivalent period last year, to $25.2m.
Bob Beeston, chief executive of FKI, said: "We believe Logistex will now be able to offer an unrivalled breadth of expertise and experience in the market for logistics and sortation equipment, with pro-forma sales of some of pounds 460m."
- 1 Autistic adults could take pure MDMA to 'reduce social anxiety'
- 2 Natalie Portman tells Harvard graduates: 'Accept your lack of knowledge'
- 3 Before you complain about your GP, this is what you need to know about actually doing the job
- 4 Father of 12 accused of raping, beating, starving and abusing his own children in US 'cult'
- 5 Charlie Charlie Challenge explained: not a Mexican demon being summoned — it's gravity
People are criticising Fifa World Cup sponsors with corrupt corporate logos
Natalie Portman tells Harvard graduates: 'Accept your lack of knowledge'
University league tables: Best universities for teaching standards rank Oxford, Cambridge and Coventry among top 20
Fifa corruption live: Uefa to consider pulling teams from Fifa tournaments if Blatter stays
Skull found in Spain could be the world's first-ever murder victim
EU referendum: David Cameron's rules are a 'democratic disgrace', says French-born Scottish politician set to be denied a vote
The day that Britain resigned as a global power
SNP fury as HS2 finds 'no business case' for taking fast train service to Scotland
Australian man punched in the face for defending Muslim women from abuse on train
A nation of inequality: How the UK is failing to feed its most vulnerable people
EU referendum: David Cameron to deny EU migrants and under-18s the chance to vote
iJobs Money & Business
£30 - 35k: Guru Careers: We are seeking a Pricing Analyst to join a leading e-...
£20000 - £25000 per annum + OTE £45K YR1: SThree: At SThree, we like to be dif...
£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...
£55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...