Scapa's transformation into a focused industrial tapes business is almost complete. Yesterday it pulled off the sale of most of its specialty materials division, raising pounds 37m to fund the acquisition of tapes businesses and strengthen its hand in the automotive and medical tapes markets.
Industrial double-sided sticky tape is one technology it is keen to acquire. Scapa aims to be a niche player, more nimble than rivals and so better able to meet the changing needs of its customers.
Meanwhile, the existing business is growing strongly. Operating profits in the continuing businesses grew 11 per cent in the first half, driven by rationalisation benefits and strong sales of new products, such as tape for disk drives.
Analysts expect pre-tax profits of pounds 27m in the full year and earnings of 11.7p per share, rising to pounds 30m and 12.9p in 2001. The shares closed up 18p per cent at 149.5p yesterday. Scapa is in advanced acquisition discussions and the outlook is benign. Buy.