Sighs of relief at Bullough: The Investment Column
Friday 31 January 1997
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.
- 2 Oil tanker with $100 million cargo goes missing off Texas coast
- 4 A teacher speaks out: 'I'm effectively being forced out of a career that I wanted to love'
- 5 Lady al-Qa’ida: On the trail of Dr Aafia Siddiqui, the world’s most wanted prisoner
YouTube video posted by Isis militants shows 'execution of 250 Syrian soldiers'
Keira Knightley topless: Usually conservative actress does own take on #Freethenipple campaign for Interview Magazine
Oil tanker with $100 million cargo goes missing off Texas coast
George Galloway left with severe bruising after attack in Notting Hill by man 'shouting about the Holocaust'
A teacher speaks out: 'I'm effectively being forced out of a career that I wanted to love'
Robin Williams Emmys tribute led by Billy Crystal criticised for including 'racist' joke about Muslim woman
The Rotherham child abuse scandal is a tale of apologists, misogyny and double standards
What do immigrants really think of Britain? Polish immigrant's Reddit post goes viral
Scottish independence TV debate: Pumped-up Alex Salmond bounces back in bruising second round against Alistair Darling
Do you realise just how foolish the UK looks?
With Douglas Carswell joining Ukip, my party has taken another giant step forward
- < Previous
- Next >
iJobs Money & Business
£35000 per annum: Harrington Starr: Network Engineer (CCNP, CCNA, Linux, OSPF,...
£50000 per annum: Harrington Starr: DevOps Engineer (Systems Administration, L...
£60000 - £70000 per annum: Harrington Starr: A prestigious leading professiona...
£50000 per annum: Harrington Starr: Financial Technical Consultant (C++, C#, F...