Underpinning the profit performance is a substantial improvement in Kalon's operating profit margins. Overall margins grew from 8.6 to 11.3 per cent for the six months to 30 June.
Mike Hennessy, Kalon's chief executive, said its operations were benefiting from economies of scale as paint production increased. Kalon's main business is downmarket paint. It owns the Leyland brand but has several other small businesses.
Its chemicals, industrial and Spanish Smyth-Morris operations all lost money. Manders, Kalon's target in the all-paper bid, immediately criticised the figures.
Roger Akers, managing director, said: 'Shareholders . . . should ask how sustainable such profits are, and why there is no full year forecast.'
Kalon has promised to pay a 3.2p full year dividend. The interim payment is 1p, up from 0.7p last time. Manders forecasts an 8.4p full year payout, which means both companies are yielding 4.5 per cent.
Manders also pointed to minimal acceptances for the offer at yesterday's second closing date as evidence that the bid will ultimately fail. Kalon extened the offer to next Monday.Reuse content