Laporte profits dip but Wassall up 73%

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The Independent Online
LAPORTE, Britain's second-biggest chemicals company, yesterday delivered pre-tax profits of pounds 86.6m ( pounds 96.4m) for 1992, in line with forecasts it made when it bid for Evode in January.

Wassall, Laporte's rival for Evode, also reported on-target results, with a spectacular profits rise of 73 per cent to pounds 17.8m before tax in 1992.

Laporte's pounds 10m profits fall reflected the unwinding of its joint venture with Solvay, the Belgian group. But earnings per share declined only 2 per cent to 39.2p, as the deal with Solvay reduced the number of Laporte shares in issue.

The group was bullish about growth prospects this year. Ken Minton, chief executive, said the absorbents and organic chemicals divisions would drive growth.

'Four out of five divisions increased operating profits, despite a trading climate that did not improve in 1992,' he added.

He highlighted the absorbents division, which showed a dramatic improvement in margins and profits in the second half of the year. 'The division was a bit of a villain,' he said, 'but we have spent pounds 54m of capital in the past three years to reshape that business.'

The only division to show a decline in operating profits was metals and electronic chemicals, which Mr Minton put down largely to cyclical factors in the United States.

Mr Minton said the integration of Evode was going very well. 'We've already taken out pounds 3m of costs just at the group overheads level.' He was encouraged by the enthusiasm of Evode's managers for changes being introduced.

The shares fell 10p to 675p despite results being in line with expectations. Analysts said the fall reflected some concern that gearing rose to 53 per cent. Hoare Govett marked its forecast for 1993 profits down pounds 6m to pounds 114m, but Martin Evans, chemicals analyst, said the shares, at a small premium to the market, remained inexpensive.

The final dividend rises 3 per cent to 19.5p.

Wassall's results were helped by the first full-year contribution from DAP, the mini-conglomerate's US DIY company.

Chris Miller, Wassall's chief executive, said DAP's performance was the highlight of the year, contributing pounds 8.9m to operating profits of pounds 20.6m.

Wassall is sitting on net cash of pounds 31m following a rights issue made when the group was after Evode. Mr Miller said: 'We're looking to identify another good acquisition, but to rush into a deal just because the market is expecting it would be a disaster.'

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