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Investment: Meyer can cope with slowdown

IT HAS been a challenging year for Meyer International. Integrating the Harcros building material suppliers with its Jewson retail business, coupled with general uncertainty in the building sector, has taken its toll on the share price, which is down 30 per cent from its May high of 445p.

Yet the City seems agreed that yesterday's interim figures, with half- year profits up 48 per cent to pounds 38.7m, show that Meyer is better equipped than most to weather the flattish growth predicted in the sector.

The integration of Harcros has been more successful than expected, leading to considerable cost savings. And margins, up 36 per cent to 6.4 per cent, are expected to widen further.

With up to pounds 70m in his war chest, the chief executive, Alan Paterson, wants to expand the chain to 500 stores, from the current level of 390.

Yesterday's figures sent the share price up 4 per cent to 313p. On full- year profit estimates of pounds 73m, Meyer shares trade on a forward multiple of just over 10. That might look cheap but the building sector is only for the brave right now.