Harrisons is slow to bear fruit; The Investment Column

Harrisons & Crosfield just cannot seem to fire on all cylinders at once. Bill Turcan, who moved over into the chief executive's slot in May 1994, has done his best to shake the tree, but the former plantations group has resolutely failed to deliver.

The first half to June was no exception, with pre-tax profits down from pounds 66.4m to pounds 64m, hit by a collapse in the results of the builder's merchanting operations on both sides of the Atlantic. Underlying profits from Harcros, which has been overtaken by Travis Perkins as the UK's leading chain, slumped from pounds 9.6m to pounds 5.1m, while Moore's in the US turned pounds 1.1m profits into a pounds 2.4m loss.

But most of the UK industry has suffered in the past 18 months and Harcros's northern bias has left it particularly exposed. In the US, Moore's has faced aggressive competition from a new entrant in the DIY market and floods in Pennsylvania. The restructuring initiated in both businesses has clearly hit the figures in the short term, but the results are starting to come through. Moore's is back in profit and new management at Harcros has already exceeded its original cost savings target of pounds 8.5m.

Harrisons recognises that operating margins at Harcros, 3.1 per cent in the latest figures, need to catch up with the industry's best. Despite more difficult conditions, Travis Perkins is still notching up 7.2 per cent, some 2 percentage points better than Harcros in its peak year of 1994. The omens are good, however, especially since Harcros has won back half the market share lost since April last year.

Elsewhere, chemicals continue to shine, with profits rising from pounds 28.6m to pounds 29.3m in the latest period. Harrisons has an enviable position in chrome chemicals, used in a range of applications from wood treatment to aerospace alloys, and is strong in pigments for paints and the like. Most of the pounds 250m to pounds 300m firepower provided by the group's ungeared balance sheet will initially be concentrated here. Discussions about acquisitions are under way, but nothing is imminent, the company says.

With the impending disposal of the remaining plantation interests next month, Harrisons' only other division will be the BOCM Pauls animal feeds to malt operations. These kept profits moving despite what was effectively a pounds 1.5m hit from the mad cow scare.

Profits of pounds 119m this year would put the shares, up 1.5p at 143p, on a forward multiple of 13. Questions remain about the continuing absence of a finance director and management's ability to spend wisely, but the shares are worth holding now.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee