Salvesen reports underlying 11% rise: Specialist hire is outstanding performer

Click to follow
The Independent Online
A KEY role in supplying the Barcelona Olympics has helped Christian Salvesen, the distribution to bricks group, to win first-time contracts in Europe for its temperature control hire equipment, according to Chris Masters, chief executive.

Temperature controls is one of its strongest specialist hire products in North American markets. Specialist hire, despite a poor performance from light and sound, where tumbling rock concert ticket sales hit demand, was the outstanding performer last year within an underlying 11 per cent rise in pre-tax profits.

Published pre-tax profits, prepared under the FRS3 accounting standard, show a 64 per cent rise to pounds 75.9m compared with a restated pounds 46.3m and almost doubled earnings of 19.1p. Dividends are up 11.4 per cent to 7.8p.

Under the new standard, pounds 20.9m of provisions and disposal losses in 1991/2 are now set against profits whereas last year a pounds 10.2m goodwill write-off was offset by a pounds 12.6m profit on the sale of its Oilfield Technology subsidiary.

Specialist hire profits rose 19.3 per cent to pounds 28.4m, advancing even in the UK, where a wide spread of customers outweighed the depressed construction sector. Maiden European contracts for temperature controls, which provide 30 per cent of hire revenues, were won in Benelux and Denmark.

UK distribution relied on higher grocery volumes rather than big new contracts to lift profits 3.5 per cent to pounds 20.5m. On the Continent, profits improved by 42 per cent to pounds 6.1m.

Food services profits rose by 6 per cent to pounds 12.4m. Past investment by Salvesen, which packs 30 per cent of all frozen vegetables, offset a small fall in volume. Brick profits - pounds 9.4m at the peak four years ago - slipped to pounds 1.7m and the company says brick prices, down 50 per cent since 1989, may have stabilised.

(Photograph omitted)