The Investment Column: Bensons Crisps

SAVOURY SNACK maker Bensons Crisps has margins that are, naturally, wafer thin. pre-tax profits were just pounds 900,000 in the first half of the current year on the back of sales of pounds 21m. But in real terms, Bensons' margins are far fatter.

The interims were hit by the accounting effect of the group's sale of one its plants, which it now leases, in order to buy Country Harvest Natural Foods in May. But margins on a like-for-like basis rose to 5.5 per cent from 5.4 per cent. The shares closed up a slim 1.5p at 49p yesterday, continuing their steady rise since 1996, as Bensons posted interim results.

Country Harvest contributed pounds 39,000 of profits, despite being included in just three weeks of the numbers. The group expects that the real action from the acquisition will come later this year.

Managing director Neil Hopkins-Coman expects Bensons to capitalise on our increasing impatience in the preparation of food by continually innovating new snacks.

Investec Henderson Crosthwaite expects pre-tax profits of pounds 3.58m and earnings of 5.8p for the full year, putting Bensons on a p/e of 8. Although Bensons is in good health, its markets are tough and the shares are likely to continue to underperform.