Glynwed shares rise after jump in profits

GLYNWED International yesterday announced a 30 per cent increase in annual profits to pounds 45.4m, prompting a 14p rise in shares to 404p.

Profits, including discontinued and divested interests, rose from pounds 30.9m to pounds 45.5m. Glynwed has held the dividend at 11.65p because of the low cover provided by earnings per share of 14.57p.

'All our ratios moved in the right direction,' said Gareth Davies, chairman of the West Midlands engineering group, which makes Aga- Rayburn cookers, copper tubes and drainage pipes.

Profit margins in 1993 improved from 4.7 to 5.8 per cent, returns on capital employed rose from 13.8 to 18.5 per cent and gearing was reduced from 49.5 to 34.3 per cent.

Glynwed's UK markets were mainly down, but the company's main growth was derived at home because 'some of our competitors are in disarray,' said Bruce Ralph, chief executive.

Mr Davies said: 'There is evidence that the UK economy is recovering, albeit slowly, and although the effects of the new tax increases have yet to be felt, we are confident that our progress will continue into 1994.'

Nick Boulder, director, added: 'I don't know whether the tax increases will hold back growth, but I'm not pessimistic about it.'

The future of many of the company's products is dependent on the health of the new housing market, commercial developments and local authority expenditure on infrastructure.

Glynwed's consumer products division, which has been separated from the foundry business, saw operating profits rise 26 per cent to pounds 10.8m. All units generated higher returns, despite 'little or no improvement in their market sectors'.

He said foundry products recovered strongly with profits climbing from pounds 500,000 to pounds 2.6m. 'This was despite the deep recession and very competitive margins in the construction industry throughout Europe.'