The Investment column: Wace presents a triple whammy
Tuesday 20 August 1996
The triple whammy was delivered yesterday by news that pre-tax profits have crashed from pounds 10m to pounds 4.21m in the six months to June. Earnings per share have slumped from 7.3p to 1.4p, not quite enough to cover an unchanged interim dividend of 1.85p. The shares accordingly slid 15p to 152p.
The merger of Wace's existing wine and spirit labelling operations with those of Ferry Pickering, a maker of specialist packaging acquired for pounds 26m last year, was always going to be expensive, but the market was wrong-footed by the pounds 3.2m exceptional unveiled yesterday, which comes on top of a pounds 800,000 loss on the closure of a US plant.
More serious was the performance of the UK businesses. Excluding acquisitions, printing profits slid from pounds 6.2m to pounds 3.5m in the half, hit by the destocking flagged by the company earlier in the year and hefty competition, exacerbated by desperate rivals on the brink of collapse. Meanwhile, imaging, the process of transforming images and words into a form in which they can be printed, crashed from pounds 2.2m to just pounds 800,000 as a large customer slashed his business with Wace.
The figures would have been worse, but for pounds 800,000 profits from Ferry Pickering and Hallmark's Irish greeting card plant, also acquired last year.
Chief executive Trevor Grice has been feted by the City for turning the group round, but with profits unlikely to top pounds 17m this year, his stock has (literally) taken a tumble. A forward multiple of 14 and gearing of 67 per cent suggest investors should exercise caution.
Geoffrey Macnab does not like the comedian's big screen debut
Look beyond the usual shows for the best festive telly
The battle for control of Stieg Larsson's £30m legacy
French pub fined €9,000 after customers returned empties to bar - because it's 'undeclared labour'
Sun will 'flip upside down' within weeks, says Nasa
PAs cleared of fraud - and Nigella Lawson left reeling at 'ridiculous sideshow' of drug allegations and public dissection of marriage to Charles Saatchi
Burglar steals video tapes of child abuse, hands them into police
Paul Walker's daughter Meadow attends Justin Bieber Believe premiere
- 1 Bonuses for goals and top four finish as Luiz Suarez joins Premier League's top three earners
- 2 Sun will 'flip upside down' within weeks, says Nasa
- 3 #Teamnigella: It’s the only side to be on
- 4 Christmas comes early: Justin Bieber is 'retiring from music'
- 5 Burglar steals video tapes of child abuse, hands them into police
- < Previous
- Next >
iJobs Money & Business
£Negotiable: Citifocus: High calibre individual with institutional client serv...
£120000 - £150000 per annum: Cornwallis Elt : Programme Manager, Strategy Lead...
£55000 - £120000 per annum: Pro-Recruitment Group: The Financial Services Tran...
£600 - £700 per day: Harrington Starr: Client based in West London is looking ...