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Green policy keeps profit firm at Wm Sinclair

Peat farms that do not bespoil places of special interest helped to keep profits firm at William Sinclair Holdings, the garden and pet products group.

The company reported a 3 per cent rise in pre-tax profits to pounds 4.6m for the year to 30 June, on turnover that increased 13 per cent to pounds 36.5m.

The policy of extracting peat only from bogs not classed as sites of special scientific interest boosted Sinclair's market share in compost products.

Sinclair shares leapt 13p to 209p on the announcement, despite a 9 per cent fall in earnings per share to 15.7p, reflecting the dilution arising from the acquisition in April of Secto, a manufacturer of pet care and insecticidal products.

Tom Sinclair, chairman, said that Secto's earnings had a minimal impact for the period under review. He expected earnings to bounce back once it was making a contribution. He said Sinclair was very pleased with the integration of Secto and had left its management and workforce intact.

Prospects for the current year were difficult to assess because of the seasonal nature of much of the business, but the company was still on the look-out for acquisitions, aided by a cash surplus and strong balance sheet.

There was just one setback for the Lincoln-based group. Farmer Foster, which made garden furniture, was sold at the end of August, producing a pounds 411,000 cost that has been written off as an extraordinary item.

The dividend rose 4.5 per cent to 7p. Pat O'Bryan, analyst at Hoare Govett, said the group had good long-term prospects and the shares deserved a higher rating.