Kalon buys French paint firm

KALON, the Yorkshire-based paint maker, has spent Fr161m ( pounds 20m) on Novodec, a French paint manufacturer, writes Robert Cole.

Novodec will be Kalon's first major acquisition overseas. It makes paint for the own-label market and made profits of Fr12m after tax in the year to 31 December.

Kalon's year also runs to 31 December, and while Novodec will not influence last year's results, it is expected to contribute an extra pounds 2.5m to pre-tax profits this year.

Smith New Court, the company's own stockbroker, predicts Kalon will make pounds 18m this year. Before the acquisition it was forecasting profits of pounds 15.5m.

Mike Hennessy, Kalon's chief executive, said Novodec was similar to Kalon before he took charge in 1988. Mr Hennessy has developed the number of paint products produced and opened a distribution network. He has the same plans for Novodec.

Kalon is placing nearly 12 million new shares (10 per cent of the capital base) with institutional investors at 117p to raise pounds 14m. The balance will be satisfied by dipping into cash resources, but will still leave Kalon pounds 6.5m in the black.

Kalon said it expected to make pounds 13m before tax for the year to last December, 41 per cent ahead of 1991's pounds 9.2m. The total divdend will be 3.2p, 45 per cent more than 1991. Yesterday Kalon shares closed up 1.5p at 123.5p.