Graseby to float subsidiary in US

GRASEBY plans to cut its debt- equity ratio by floating a large chunk of its air pollution monitoring business on the Nasdaq market in the United States.

The electronics group's gearing has risen to 99 per cent because it has maintained its 10.9p a share dividend at a cost of pounds 6.9m. Coming on top of disposal and closure costs and the near-disappearance of Graseby's defence profits, this has knocked shareholders' funds pounds 9.4m lower to pounds 20.9m - less than half the amount of two years earlier.

Graseby hopes to raise pounds 17m or more by selling shares in Graseby Andersen, which was formed from the environmental business acquired with Tace in 1991. Graseby will retain a majority holding in its subsidiary.

Bob Brown, the finance director, said the flotation will provide funds to support the growth not just of Graseby Andersen, but also of the group's medical and contaminant monitoring businesses.

Without Tace and its Goring Kerr subsidiary, Graseby would be in serious trouble. Environmental profits grew by pounds 1m to pounds 3.2m and Goring Kerr lifted profits from instruments by pounds 2.9m to pounds 4.2m.

On the new FRS3 accounting standard, pre-tax profits fell from a re-stated pounds 7.5m to pounds 1m. Operating profits from continuing operations fell from pounds 12.4m to pounds 9.5m. This year has started 'encouragingly', helped by more than pounds 5m of defence orders.