US acquisition boosts Heywood: Shares rise as building materials company forecasts pounds 34m profit

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The Independent Online
HEYWOOD Williams, the building materials company, yesterday announced its third acquisition since the disposal earlier this year of its glass merchanting business to Pilkington.

The market reacted warmly to the deal, which was accompanied by a forecast of profits for the year of pounds 34m and an increased dividend. The shares closed up 42p at 386p.

The acquisition of Bristol, a US- based manufacturer of plumbing products for pre-fabricated houses and recreational vehicles, will cost pounds 54.9m, funded by a one-for-four rights issue to raise pounds 50.6m.

The deal follows the acquisition in June of LaSalle, which supplies furnishings to the same markets in the US, for pounds 35m. In October, Bridgewater, a windscreen replacement business, was bought for pounds 10.6m.

Ralph Hinchliffe, chairman, said the acquisition would increase US sales to 50 per cent of the group total. He added that a further pounds 30m had been earmarked for further acquisitions, probably in the UK.

After the deal, Heywood will have net cash of about pounds 10m, compared with net assets of pounds 120m. The disposal to Pilkington raised pounds 95m.

The markets for manufactured housing and recreational vehicles in the US are growing fast. In 1992, manufactured homes accounted for 15 per cent of total housing starts, with sales 23 per cent higher than in the previous year. Sales of recreational vehicles increased by 24 per cent last year.

Bristol's turnover and profits rose by 13 and 34 per cent respectively in 1992. In the year to November, it is expected to have made profits of pounds 8.4m, so the deal should enhance earnings in 1994.

The final dividend for the year to December will be 8.5p, making a total of 13p (12.5p).