Sighs of relief at Bullough: The Investment Column

Michael Pickard knows a thing or two about turning a sow's ear into a silk purse - he is chairman of the London Docklands Development Corporation - so it is perhaps not surprising he has done such an apparently sound job rescuing Bullough since he took the chair seven months ago. Nonetheless, the change in fortunes at the engineering, heating and office furniture company, is an impressive recovery story, worthy of the 18.5p rise in the share price yesterday to 95p.

The collective sigh of relief from investors reflected Bullough's unexpected success in drawing a line under its disastrous investment in the French office furniture market. A heavy exposure to the public sector there means the company has fallen foul of Paris's desire to meet the Maastricht criteria for inclusion in the single currency. Government spending has stopped.

The cost of pulling the plug on Atal has been considerable and a pounds 21m exceptional write-off put a heavy dent in full-year profits to October, already badly scarred by French trading losses and a dip into the red by the struggling UK refrigeration division. Pre-exceptional profits of pounds 7.99m compared with pounds 14.5m in 1995 and earnings per share tumbled from 6.6p to 3.4p before an exceptional 22.5p-a-share charge.

The dramatic rise in the shares yesterday, however, reflected the market's relief that all the bad news would appear to be out in the open and measurable. It had been feared that Bullough would struggle on with Atal, incurring further open-ended losses. The management's confidence that it was all water under the bridge was reflected in the fact that the final dividend, after a one-third cut at the half-way stage, was maintained for a 5.47p total.

Since Mr Pickard came on board, nine businesses have been sold which accounted for a measly pounds 1m of operating profit from more than pounds 50m of sales. UK office furniture and heating are performing well and the balance sheet is in much better order with borrowings reduced to only 14 per cent of shareholders' funds. On the basis of UBS's forecast of pounds 17m profit this year, the shares trade on a prospective p/e ratio of about 11. Until credibility is restored a discount to the market is to be expected. But it should narrow and the shares are reasonable value.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Executive / Foreign Exchange Dealer - OTE £40,000+

£16000 - £40000 per annum: Recruitment Genius: A Foreign Exchange Dealer is re...

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

Day In a Page

The long walk west: they fled war in Syria, only to get held up in Hungary – now hundreds of refugees have set off on foot for Austria

They fled war in Syria...

...only to get stuck and sidetracked in Hungary
From The Prisoner to Mad Men, elaborate title sequences are one of the keys to a great TV series

Title sequences: From The Prisoner to Mad Men

Elaborate title sequences are one of the keys to a great TV series. But why does the art form have such a chequered history?
Giorgio Armani Beauty's fabric-inspired foundations: Get back to basics this autumn

Giorgio Armani Beauty's foundations

Sumptuous fabrics meet luscious cosmetics for this elegant look
From stowaways to Operation Stack: Life in a transcontinental lorry cab

Life from the inside of a trucker's cab

From stowaways to Operation Stack, it's a challenging time to be a trucker heading to and from the Continent
Kelis interview: The songwriter and sauce-maker on cooking for Pharrell and crying over potatoes

Kelis interview

The singer and sauce-maker on cooking for Pharrell
Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea