Kalon soars with help from French purchase

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The Independent Online
VIVE la France was the message from Kalon, the paint maker, yesterday as it announced a 42 per cent rise in profits on the back of its French acquisition, Novodec, writes John Murray.

The group made pounds 8.7m before tax in the six months to 3 July, almost pounds 2.5m of which was contributed by Novodec. The French company, bought in February for pounds 18m, was included in the figures for only five months.

Mike Hennessy, group managing director, said Novodec's 40 per cent profits improvement reflected savings from bulk buying of raw materials and other economies of scale from which the enlarged group benefited.

Kalon also progressed in the UK, increasing market share despite fierce price competition and pressure on margins.

Mr Hennessy said that Kalon's strategy of expanding its trade centre network had helped to increase turnover, and that the group had reacted to changes in the market by introducing budget brands rather than by debasing prices.

Kalon now has 73 trade centres and plans to open another four next month. Mr Hennessy said the group was aiming for a total of between 100 and 120 centres.

But he added that the domestic paint market was still volatile, although he expected further growth in the second half of the year from Kalon's specialist products subsidiary.

The interim dividend rises 30 per cent to 1.3p on earnings per share that increased 29 per cent to 4.46p. The shares closed 7p higher at 167p.