Williams still on takeover trail

WILLIAMS Holdings, the industrial conglomerate whose brands include Rawlplug and Yale, is set to continue the takeover spree that has seen it make four purchases so far this year, with 'one or two' deals expected before the end of the year.

Nigel Rudd, chairman, said the acquisitions under consideration were small deals, designed to add to its three core areas of operation - building products, security and fire protection. He did not rule out a large deal if the opportunity came along, but there was 'nothing major in the pipeline'.

A pounds 267m rights issue in May has left the group with pounds 12.7m of cash at the end of June after the pounds 47.1m cost of the three acquisitions made in the first half of the year. Since then it has paid pounds 64m for the wood care and adhesive business of Solvay, the European chemical group, which has left it with borrowings of about pounds 50m.

Mr Rudd said that provided interest was covered at least five times by operating profits he would in principle be prepared to have debts higher than net assets.

The net asset value on the balance sheet was not a good guide to the worth of the company as intangibles, such as the value of brands like Cuprinol, Yale and Rawlplug, were not included.

His comments came as he revealed a 12.8 per cent increase in profits before tax to pounds 86.2m on sales 10 per cent higher at pounds 648.7m for the six months to June. The three acquisitions made a pounds 3.1m loss, although that was after pounds 4m of reorganisation costs. That process is now complete and Mr Rudd said they were all performing well.

He highlighted Corbin & Russwin, the locks business acquired in December, where Williams has doubled margins by improving stock and work in progress.

Earnings per share were 9p, up from 8.3p, and the interim dividend is increased by 6.7 per cent to 5.25p. The shares closed 20p higher at 365p.