Del Monte buy bears fruit for Yorkshire

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The Independent Online
YORKSHIRE Food Group lifted earnings and dividend 14 and 11 per cent respectively in its first year as a public company.

Pre-tax profits rose 89 per cent to pounds 5.1m in 1993. Much of the improvement was due to the acquisition of the dried fruit business of Del Monte in the US, which chipped in pounds 1.9m in the five months after Yorkshire's purchase. Operating profits from the rest of the business rose 11.4 per cent to pounds 4.9m on sales 27.5 per cent higher at pounds 78.7m.

Mike Firth, chief executive, said the group had realised that trading in Britain was going to be difficult in 1993, so had chosen to go for volume at the expense of margins. 'If things get better and the margin returns, you are sitting pretty.'

Yorkshire made it clear when it floated that it intended to expand by acquisition, and Mr Firth said he would be surprised if there was no purchase this year. The Del Monte business cost dollars 26.7m, funded through an pounds 11.4m placing at 114p a share - 4p above the offer price when the group floated in March.

Gearing at year-end stood at 53 per cent of shareholders' funds. Mr Firth said he would prefer any acquisitions to be in Britain, and said it may require raising funds from shareholders.

Earnings per share were 9.33p, up from 8.21p, while the final dividend was 2.48p, for a total of 3.2p, compared with a notional 2.88p.