Woolcombers pulls float during turmoil

WOOLCOMBERS Group, the wool-processing company, was forced to pull its flotation on the stock market yesterday because of the turbulence and volatility caused by the European currency crisis, writes Paul Durman.

Institutions were reluctant to commit themselves to invest in Woolcombers at a time of such great uncertainty. Alan Lewis, chairman, said: 'There were quite a number of people who wanted to buy but because of the volatility did not take the view to invest the quantum they did before.'

Nick McCarthy of James Capel, Woolcombers' adviser, said institutions are very reluctant to commit money to small companies, preferring larger stocks where it is easier to get their money out again at short notice.

Woolcombers issued its pathfinder prospectus two weeks ago. Dealings in its shares were to have started on 1 October.

Although Woolcombers was to have raised pounds 20m in the flotation, Mr Lewis said the postponement would not cause it any problems. 'The company is doing very well and generating a lot of cash,' he said. 'We'll wait until conditions improve.'

With its next interim accounts date at the end of this month, Woolcombers is unlikely to be able to obtain a flotation before the end of the year at the earliest. The aborted float has cost the company about pounds 300,000.