Smaller Companies: Bemrose close to US acquisition

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JUST AS the US economy is showing signs of an upturn, Bemrose Corporation, the Derby-based printer, is poised to expand its activities across the Atlantic with an acquisition.

The company, whose activities include printing tickets for the FA Cup final, is understood to be in advanced negotiations over the purchase of a promotional gifts business for about pounds 1m. A deal could be announced by Christmas.

Bemrose already has a significant presence in the promotional gifts market thanks to its calendar and diary printing businesses. The latest purchase will take it into a complementary sector.

The target is believed to be Lite-R-Line, a distributor of personalised gifts such as nail clippers and penknives. The business, which specialises in printing names on gift items, is owned by London International Group, the manufacturer of Durex condoms.

The acquisition is likely to be made though Bemrose's 50 per cent-owned associate, Bemrose Yattendon, which has become the largest supplier to the US speciality advertising market over the past two years.

The move follows the purchase of Colson Calendars and LTA Calendars earlier this year. With Lite's sales approaching dollars 2m ( pounds 1.3m) this year, the trio should boost BY's annual turnover by about dollars 8m.

By any standard, Bemrose has had a hectic year. In January, Sir Gordon Bruton was replaced as chairman by David Wrigglesworth, who vacated the post of chief executive for Rodger Booth. Since then, several high-powered non-executive directors have joined the board, including Richard Hanwell, the former chief executive of Norton Opax, the big cheque printing group.

In February, Bemrose decided to close its credit card printing business due to stiff competition and losses at the division.

Apart from the US acquisitions, the group has also bought Rowson Crystal, a market leader in etching and engraving on crystal glass and other materials, for pounds 750,000 this year.

Warburg Securities, the broker, estimates that the group's security printing arm accounts for about 40 per cent of its directly- owned businesses. The balance is made up by ticket printing, promotional and other businesses.

Taxable profits for the year ending this month are expected to increase from pounds 5.1m to pounds 5.6m. With pre-tax profits of pounds 6.3m on the cards for next year, the shares - at 234p last Friday - are trading at nine times 1993 earnings. They are good value, provided the US and UK economies live up to recovery hopes.