Vymura's new strategy inspires a turnround

CONCENTRATION on a small number of do-it-yourself retail groups helped Vymura, the wallpaper manufacturer, turn a pounds 2.6m loss into a pounds 2.4m profit in five years. It hopes the trading record will persuade investors to subscribe for shares in a flotation expected to value the company at pounds 40m, writes Heather Connon.

Vymura intends to raise about pounds 10m, of which pounds 5.3m will be used to redeem preference shares issued as part of its pounds 14m management buyout from Imperial Chemical Industries two years ago, and the remainder to repay borrowings. That will leave it with pounds 4.4m of debt, down from pounds 8.9m, equal to a third of net assets. The directors, who own about half the company, and the venture capitalists who backed the buyout, are also likely to sell some shares. The pathfinder prospectus was issued yesteday and pricing is expected on 5 May.

Tom Smail, chief executive, said that the company had suffered from trying to service too many customers with too many products.

Since he took over in 1988 the group had dropped a quarter of its product range - it now offers 2,000 - shed 22 per cent of the workforce and focused its sales on do-it-yourself retailers.