Hewden spending pays off

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HEWDEN STUART, Britain's largest plant hirer, continued to recover strongly in the half-year to July from the recession that savaged its main customers in the construction industry.

Following a 35 per cent increase last year, interim profits jumped 77 per cent to pounds 16.2m, benefiting from a capital spending programme maintained throughout the recession and amounting to pounds 100m over the past 18 months.

Sir Matthew Goodwin, chairman, said the company was beginning to feel the impact of the improving economy. Hewden's heavy spending during the downturn meant it now had a much more modern fleet than its competitors.

Sales were boosted following the Taylor report into safety standards at football grounds and the increasing realisation from customers that it made more sense to hire rather than to buy large equipment.

Sir Matthew said the first signs were emerging of industrial projects getting under way. Tower cranes, which had become almost an endangered species, were returning to the skyline in some parts of the country.

Analysts bumped up forecasts after the better-than-expected figures. They are predicting profits of pounds 30m in the year to January, followed by pounds 35m to January 1996.

Hewden Stuart remained profitable throughout the construction industry slump despite utilisation rates - the key measure of a plant hire company's health - falling to less than 50 per cent, and prices described by Sir Matthew as suicidal.

Turnover during the half increased from pounds 91.7m to pounds 120m, with trading strong in machinery sales and plant hire. Earnings per share were 65 per cent higher at 4.94p and the interim dividend rose 10 per cent to 0.825p.

The shares, which have tripled since the beginning of 1993, closed unchanged at 146.5p.