Smaller Companies: Bruntcliffe on the acquisition trail

SIX months ago Bruntcliffe was a tiny, little-known investment trust with close ties to the textile industry. Only its preference shares enjoyed a quote.

The arrival of six businessmen has transformed it. It now has ambitions to emerge as a powerful aggregates group and in two digs has raised pounds 12.7m in the stock market for acquisitions.

The pounds 3.6m produced by its opening share placing allowed it to embark on its aggregates build-up. First deals pulled in a Warwickshire quarry and aggregate and coal interests in the US.

One new director, Mike Wallis, is a former Tarmac executive. When his old firm put five hard rock and limestone quarries in northern Scotland up for sale he moved swiftly. Bruntcliffe needed to raise pounds 9.1m, and shareholders were confronted with another batch of new shares. The price was pitched at 25p when Bruntcliffe started its build- up. For the Tarmac deal the shares were valued at 35p. They are now 41p.

More deals are likely, and more share placings. Mr Wallis believes the recession has pulled quarry prices to more realistic levels. They are now historically low with many operators willing to consider selling to cut back their debts.

Ideally he would like time to absorb the Tarmac quarries, which made operating profits of pounds 1.5m last year, before expanding again. But Bruntcliffe must remain active to take advantage of the buyer's market while it lasts.

Many expect Bruntcliffe to strike again in the next six months. And it could be its largest deal yet. The rumour is that possible targets in the UK and US are being studied.

The shares, despite the threat of more cash demands, are an interesting speculation on the Wallis team's ability to create a new quarrying force.