Flotation at Denby likely to net 10m pounds

Click to follow
The Independent Online
IN SHARP contrast to many recent new issues, Denby Pottery - which published its pathfinder prospectus yesterday - has a long history. The maker of distinctive earthenware mugs and tableware was founded in 1809. It still uses old-fashioned potters' wheels and hand-made glazes for some of its products.

It is likely to be valued at more than pounds 40m. New funds of about pounds 10m raised in the flotation will leave Denby debt-free. The present management bought the firm out from the administrators of the defunct Coloroll empire in 1990. Coloroll had acquired it in 1987.

Denby sees growth prospects in the trend away from formal dining, for which people prefer fine china. It said that with domestic sales of pounds 14.7m last year it had a 7.3 per cent share of the British market for tableware and cookware.

It is extending its distribution network to include outlets such as garden centres and kitchen shops as well as department stores.

It also plans to increase its marketing efforts overseas, especially in the US and France. Last year 16 per cent of turnover came from exports, which is likely to rise to 20 per cent this year - but its top three competitors sold more than half their output abroad.

Since the buyout Denby has been profitable. Profits before tax in the year ending September 1993 rose to pounds 2.8m from pounds 1.3m, on turnover 41 per cent higher at pounds 17.6m. The company forecast pre-tax profits of pounds 4.1m for the current financial year. It said it would have a progressive dividend policy.

Denby has invested pounds 7m in production and distribution facilities since 1990. It has about 17 years' worth of its main raw material, clay, on site.

Management and the venture capitalists 3i will each retain about 20 per cent of the equity following the flotation, which will be by way of a public offer and placing. Listing details are expected to be announced on 19 May.

(Photograph omitted)