Some of Victaulic's most important products are the yellow plastic pipes that gas and water companies use for infrastructure renewal.
The year-long Monopolies and Mergers Commission investigation into British Gas, which made its report last week, cast a cloud over Victaulic. British Gas has limited its capital expenditure during the investigation.
The environment is unlikely to improve - at least in the short term - even now the MMC has reported, because the Secretary of State for Trade and Industry has yet to decide whether to adopt the MMC's recommendations.
Taxable profits for the six months to 30 June slipped back to pounds 5.8m, compared to pounds 6.3m last time. Turnover was maintained at pounds 51m, but only because additional sales from a newly acquired subsidiary replaced a pounds 3m shortfall in sales to British Gas.
David Stewart, managing director, said the MMC's proposal that British Gas should be split in two, with control of the pipeline network separated, could benefit Victaulic by stimulating expenditure on the network.
But the company remains cautious in the short term. David Winch, the chairman, said: 'A resumption of investment in the network would clearly have benefits for the group, but we are not anticipating an improvement in orders in 1993.'
Water companies are Victaulic's other main source of sales. But sales to them were flat at pounds 22m in the half.
Victaulic was cash positive in the period, adding to a cash pile that stood at pounds 10m on 30 June. In November 1992, it bought Lindapter, a steel fixings company, for pounds 4.8m. Mr Stewart said the company was looking for more acquisitions, to reinforce its position in the piping market and unrelated areas.
He said he would be prepared to see gearing rise to 30 per cent - indicating the company could spend pounds 12m on top of its pounds 10m cash balance.
Earnings per share fell to 8.8p, down from 10.3p in the half year. The interim dividend was maintained at 2.5p. Last year's total was 7.8p. Shares rose 5p to 301p yesterday.