Watmough profits almost doubled

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The Independent Online
WATMOUGH Holdings, printer of Cosmopolitan, Harpers & Queen and Hello] as well as travel brochures and catalogues for seeds and Avon Cosmetics, has announced a surge of 97 per cent to pounds 5.12m in interim pre-tax profits.

Last year, a weak second quarter nearly halved the interim figures after Watmough temporarily lost the contract to print the Times Saturday Review and suffered a reduction in mail order business.

But turnover reached record levels in the six months to 30 June, rising 14 per cent to pounds 55.5m. 'We believe further progress can be made in the second half,' Patrick Walker, chairman, said. Earnings rose 80 per cent to 11.14p

Mr Walker said there had been a broad advance in all sectors, adding: 'UK market conditions remain very difficult, particularly in terms of magazines and publications, but supplements are holding up remarkably well.'

Higher turnover was achieved through volume increases rather than contributions from acquisitions. Interest charges fell to pounds 164,000 from pounds 1.32m after receiving proceeds from February's pounds 22.3m rights issue.

Watmough expects to spend about pounds 33m on capital expenditure this year, including pounds 9m in Spain where it is building a pounds 36m gravure plant to print Hello]

The News International contract, worth about 10 per cent of turnover, has been extended until 1998. In July, Watmough won a contract to produce discount coupons for insertion in newspapers from Shoppers Friend, a News International subsidiary.

Watmough is the first British company to install technology for placing inserts directly into a paper as it comes off the press.

The interim dividend is 2.7p against 2.5p last time. The shares closed up 6p at 443p.