Williams puts brake on its acquisition spree: Rudd promises focus on core activities as underlying profits rise 13%

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The Independent Online
WILLIAMS Holdings, the Yale locks to Rawlplug group, has not lost its appetite for acquisitions but future purchases will be closely related to the company's core activities of fire protection, building products and security, according to Nigel Rudd, the chairman.

'We are now a serious, focused company and not in an acquisition mode,' he said, reporting a decline in Williams' pre-tax profits from pounds 157.4m to pounds 153.2m after a pounds 17m loss on disposals.

Excluding this and an pounds 11m profit in 1992 on selling a stake in Racal Electronics, there was an underlying rise in profits of 13 per cent to pounds 170.3m.

Despite an increase in underlying earnings of 14 per cent to 19.7p a share, Williams is lifting the total dividend by only 2 per cent to 12.75p, with a final of 7.75p.

Mr Rudd said Williams wanted to increase earnings cover for its dividend from 1.5 times towards two times and this would mean that dividends would continue to rise more slowly than earnings.

Last year Williams made seven acquisitions totalling pounds 157.6m - pounds 107.6m in cash and pounds 50m in shares. These included Lecat Porion, a French maker of curtain track, Hammerite, the UK brand leader in metal coatings, Thorn Fire Protection, Aqualisa, the shower maker and Corbin Russwin, a top US manufacturer of commercial locks.

The new companies contributed pounds 5.3m to profits after pounds 3.1m was spent on reorganisation.

'The deal flow is getting better all the time but we are also getting more choosy. Any opportunities must be relevant to our existing activities,' Mr Rudd said.

In December Williams sold its underperforming engineering businesses, no longer considered a core activity, to management for pounds 40.3m. A sale of its auto electronics companies, whose German exposure led to more than halved profits of pounds 4.2m in Williams' 'other' non- core activities, is likely to be delayed until profits recover.

Sales in North American building products showed an underlying rise of only 2 per cent excluding currency gains but profits were 20 per cent higher at pounds 88.7m on the back of cost reductions and a switch to higher-volume distributors.

Margins in European building products and in fire protection held steady at 18 per cent and 20 per cent respectively, showing operating profits of pounds 76m and pounds 47.6m.

After a cash outflow of pounds 37m gearing ended the year at 60 per cent.

(Photograph omitted)

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