Bottom Line: MTM shareholders see light

IT would have seemed scarcely possible a couple of years ago - MTM back in the black, its balance sheet flush with cash, and on the acquisition trail once more.

An interim dividend is the first good news for shareholders since their nightmare began in early 1992.

A spectacular corporate disaster, the formerly high-flying chemicals group lurched from profit warning to contradictory profit warning, faced the scrutiny of the Serious Fraud Office and watched its share price plunge to only 5 per cent of its peak.

Appalled shareholders, who demanded and received the head of the chairman, Richard Lines, were forced to approve the final dismemberment of the company.

The price of letting the market down was the knock-down sale to BTP of all but a peripheral agrochemicals business. That, too, has been sold.

What is left is a sound balance sheet with shareholders' funds of pounds 17m, including pounds 16m cash. That will allow another sizeable acquisition to complement April's purchase of CMM, the detergent formulator. A new chief executive is also imminent.

Pre-tax profits of pounds 1.13m, which included pounds 221,000 interest from the cash pile and pounds 833,000 from discontinued operations, are largely irrelevant, as is the pounds 11.9m loss incurred last year on businesses BTP now owns.

Looking ahead, forecast full- year profits of pounds 2.3m would put the shares, up 6p to 85p, on a prospective price/earnings ratio of 14. The end of the tunnel has been reached, but until the top job is filled and the new incumbent's shopping list becomes clear, that is high enough.