Whitecroft falls on warning

The Investment Column

Whitecroft, a mini-conglomerate spanning lighting, doors and medical cotton, has been revitalised since 1992 under the direction of new management led by chief executive Mike Derbyshire. After a classic kitchen sink job in 1993, when massive provisions sent the group to pounds 41.8m loss, profits have recovered sharply. However, the market was keener to focus on what it saw yesterday as a profits warning than news of an 18 per cent rise in underlying profits to to pounds 8.08m in the year to March. (The reported figures were distorted by a pounds 5.91m property-related profit last time.) The shares duly slid 12p to 212p.

The continuing deterioration in the commercial construction market meant both the lighting and building products divisions were having to combat lower levels of activity and price deflation, the company warned. But Mr Derbyshire reckons the market has over-reacted. The company managed to shrug off the malaise to produce strong second-half figures, he said, and still ended the year with order books 20 per cent ahead.

Certainly the current year should be boosted by a full-year's contribution from Chalmers & Mitchell, acquired for pounds 4.75m in November. The Glasgow- based company has given Whitecroft market leadership in so-called hazardous lighting - equipment used on oil rigs and in chemical plants, for instance - to add to its strong market positions elsewhere. The lighting division, the second biggest in the commercial market behind TLG, raised profits last year by 6.3 per cent to pounds 6.21m last year.

The Leaderflush doors business, the other area affected by the construction market, also did well to lift profits by a tenth to pounds 13.5m. But, given that in total between a fifth and a quarter of group profits are exposed to construction, the market is probably right to be a little cautious over short-term prospects. Further out, the pounds 7.3m being spent on Edward Hall, which leads the European market in medical cotton fibre, should drive future growth and there may yet be recovery in the construction market.

With profit forecasts downgraded to around pounds 8.5m, the shares stand on a forward price-earnings ratio of around 15. High enough for now.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Graduate Recruitment Resourcer

£20000 per annum + commission: SThree: Sthree have an exciting opportunity for...

Recruitment Genius: Telesales Executive - OTE £32,000+

£18000 - £32000 per annum: Recruitment Genius: A Telesales Executive is requir...

Ashdown Group: Marketing Manager - B2B, Corporate - City, London

£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...

Neil Pavier: Commercial Analyst

£50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...

Day In a Page

War with Isis: Iraq declares victory in the battle for Tikrit - but militants make make ominous advances in neighbouring Syria's capital

War with Isis

Iraq declares victory in the battle for Tikrit - but militants make make ominous advances in neighbouring Syria
Scientists develop mechanical spring-loaded leg brace to improve walking

A spring in your step?

Scientists develop mechanical leg brace to help take a load off
Peter Ackroyd on Alfred Hitchcock: How London shaped the director's art and obsessions

Peter Ackroyd on Alfred Hitchcock

Ackroyd has devoted his literary career to chronicling the capital and its characters. He tells John Walsh why he chose the master of suspense as his latest subject
Ryan Reynolds interview: The actor is branching out with Nazi art-theft drama Woman in Gold

Ryan Reynolds branches out in Woman in Gold

For every box-office smash in Ryan Reynolds' Hollywood career, there's always been a misconceived let-down. It's time for a rethink and a reboot, the actor tells James Mottram
Why Robin Williams safeguarded himself against a morbid trend in advertising

Stars safeguard against morbid advertising

As film-makers and advertisers make increasing posthumous use of celebrities' images, some stars are finding new ways of ensuring that they rest in peace
The UK horticulture industry is facing a skills crisis - but Great Dixter aims to change all that

UK horticulture industry facing skills crisis

Great Dixter manor house in East Sussex is encouraging people to work in the industry by offering three scholarships a year to students, as well as generous placements
Hack Circus aims to turn the rule-abiding approach of TED talks on its head

Hack Circus: Technology, art and learning

Hack Circus aims to turn the rule-abiding approach of TED talks on its head. Rhodri Marsden meets mistress of ceremonies Leila Johnston
Sevenoaks is split over much-delayed decision on controversial grammar school annexe

Sevenoaks split over grammar school annexe

If Weald of Kent Grammar School is given the go-ahead for an annexe in leafy Sevenoaks, it will be the first selective state school to open in 50 years
10 best compact cameras

A look through the lens: 10 best compact cameras

If your smartphone won’t quite cut it, it’s time to invest in a new portable gadget
Paul Scholes column: Ross Barkley played well against Italy but he must build on that. His time to step up and seize that England No 10 shirt is now

Paul Scholes column

Ross Barkley played well against Italy but he must build on that. His time to step up and seize that England No 10 shirt is now
Why Michael Carrick is still proving an enigma for England

Why Carrick is still proving an enigma for England

Manchester United's talented midfielder has played international football for almost 14 years yet, frustratingly, has won only 32 caps, says Sam Wallace
Tracey Neville: The netball coach who is just as busy as her brothers, Gary and Phil

Tracey Neville is just as busy as her brothers, Gary and Phil

The former player on how she is finding time to coach both Manchester Thunder in the Superleague and England in this year's World Cup
General Election 2015: The masterminds behind the scenes

The masterminds behind the election

How do you get your party leader to embrace a message and then stick to it? By employing these people
Machine Gun America: The amusement park where teenagers go to shoot a huge range of automatic weapons

Machine Gun America

The amusement park where teenagers go to shoot a huge range of automatic weapons
The ethics of pet food: Why are we are so selective in how we show animals our love?

The ethics of pet food

Why are we are so selective in how we show animals our love?