US subsidiary helps Wassall to pounds 27m gain

PROFITS at Wassall, the conglomerate run by two former employees of Hanson, rose 30 per cent for the year to 31 December.

The growth was achieved despite an absence of acquisitions. Operating profits grew by 32 per cent to pounds 27m as Wassall benefited from an improved performance at DAP, its US building products subsidiary.

Chris Miller, the chairman, said tight control of costs also helped.

In January last year, Wassall failed in a takeover of the glues group Evode, bought by Laporte, the specialist chemicals company.

Wassall raised pounds 50m in a rights issue for the takeover. Interest on the cash raised profits 55 per cent to pounds 27.6m. The increased shares in issue meant the rise in earnings per share (23 per cent to 11.7p) reflected growth in operating profit.

The rights issue has left Wassall pounds 41m in a war chest. 'We would have liked to have spent the money but we have found nothing suitable to buy,' Mr Miller said. 'We want companies where there are problems we can put right, and we also want the right price.'

He said changes under consideration for accounting rules governing acquisitions would make no difference to Wassall's strategy.

Shares rose 10p to close at 295p. The final dividend was raised to 2.4p from 1.7p, making a total dividend increase of 36 per cent.