Waddington makes pounds 4m from society conversions

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The Independent Online
Waddington, the consumer packaging to plastic plates group, has revealed its own pounds 4m windfall from building society conversions and flotations this year. The group, one of the largest junk mail printers in the country, reckons this is the value of sales it has won providing the prospectuses and leaflets mailed out to millions of savers, borrowers and policy holders in mutual organisations converting to plc status.

Martin Buckley, chief executive, said the group was probably the largest integrated provider of services, from printing and stuffing envelopes to manipulating computer databases of direct mail target customers, in a business growing at more than 20 per cent a year.

Waddington did part of the printing and handled all the data processing for more than 9 million customers mailed ahead of Halifax's stock market launch, as well as dealing with the Bristol & West sale to the Bank of Ireland and the Woolwich float. Work on the Norwich Union flotation was done partly in Belgium while Waddington handled some project management for the operation in Canada.

The group, which will have invested pounds 18m in the business over the 24 months to the end of this financial year to March, has been so busy it has been turning business away. But Mr Buckley insisted the building society work had been no bonanza: "If we hadn't had the business with them, we would have had it with someone else."

Forecasting further growth in all its markets this year, Mr Buckley revealed a surge in Waddington's pre-tax profits from pounds 11.9m to a record pounds 32.1m in the year to 29 March, which represented a 25 per cent rise once exceptional losses on businesses sold were stripped out. Earnings per share on the same basis rose 21 per cent to 21.6p, and a final dividend of 6p raised the total payment for the year by 11 per cent to 10.4p.

The figures were well received by the stock market, which pushed the shares 25p higher to 297.5p. Francesca Raleigh, an analyst at Panmure Gordon, suggested Waddington had shrugged off its reputation for finding banana skins. It was now one of a handful of stocks in the paper and packaging sector where the growth story remained intact. She has raised her profits forecast for the current year by pounds 1m to pounds 37m.

All four divisions raised profits, although the biggest, the cartons operation, continued to be restrained by problems in the UK. The group moved in February to cut costs and introduce 24-hour-a-day working but the business has been hit by a cut in demand from big customers, which include Bird's Eye.

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