Wyevale on lookout for acquisitions

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WYEVALE Garden Centres is priming the acquisition pumps with a pounds 11m rights issue, writes John Shepherd.

The company also announced the purchase of the Challis Garden Centre, which occupies a 10-acre site near York, for pounds 1.2m.

Wyevale said the rights would reduce gearing from 26 per cent of shareholders' funds of pounds 44m to almost zero and would enable it to respond quickly to acquisition opportunities.

Several deals are being considered by Wyevale, which has built up a chain of 41 stores mostly through purchases. The biggest deal was the purchase two years ago of the 15 outlets owned by Cramphorn.

The rights, which will also lead to Wyevale graduating from the Unlisted Securities Market to a full listing, is on the basis of two for nine at 152p a share - a 16 per cent discount to yesterday's closing price of 181p, down 4p.

Wyevale, which recently announced a 20 per cent increase in interim profits to pounds 3.7m, said its centres were performing in line with expectations. Analysts expect the company to make pounds 4.3m profits for the whole year.