Wace returns to the black in wake of restructure

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RESTRUCTURING at Wace, the specialist printing group, brought it back into profit in 1993. Pre-tax losses of pounds 19m in 1992, when the group made property and restructuring provisions of pounds 26m, turned into profits of pounds 23.8m last year.

Frans ten Bos, chairman, said: 'Despite difficult business and market conditions, many of our operations performed strongly.'

Turnover rose 5 per cent to pounds 336m. Cost-cutting and tighter control of working capital improved the group's trading margins from 6.3 to 7 per cent.

Trading profit in the UK printing and pre-press businesses doubled to pounds 12.7m, boosted by a large number of customers redesigning their packaging during the year. Turnover at Wace's advertising pre- press business in Britain fell, but profits rose.

Trading conditions on the Continent were difficult, with turnover flat and profits down from pounds 3.9m to pounds 3.3m. The company said its German and Italian subsidiaries, selling to international markets, did well. In France, though, recessionary losses led it to close regional businesses and concentrate on the perfume, cosmetics and fashion markets in Paris.

Trading profits in the US fell from pounds 9m to pounds 8.4m. The company blamed uncertainty resulting from the earlier planned sale of the business and said performance recovered in the second half of the year after it announced Wace USA would remain in the group.

Stephen Puckett, group finance director, said cost-cutting would continue - especially outside the UK - but no further provisions would be needed. Wace would now begin to market integrated services to its customers rather than operating as 70 individual businesses.

Analysts were impressed as much by the improvement in Wace's balance sheet as by the group's return to profitability. With pounds 23.3m cash generated in 1993, and pounds 6.2m raised, through a share placing, borrowing fell to pounds 59.2m at the year-end.

Tim Huddart, of Credit Lyonnais Laing, said: 'This was an incredible turnround, especially as capital expenditure of almost pounds 11m showed them to be still investing in the future of the business.'

Wace increased the dividend more than expected, from 2.25p to 3.5p. The shares rose 4p to 247p.

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