Danka chief executive gains 1.5m pounds bonus

DAN DOYLE, chief executive of Danka Business Systems, received a bonus of pounds 1.5m last year as the American photocopier distributor continued to expand, writes Tom Stevenson.

Most of the payment, pounds 1.2m, was made to release the company from future performance-related bonuses, which had left Danka with a large contingent liability to Mr Doyle.

Under his original contract he was to be paid 10 per cent of the company's pre-tax profits above a certain level until 1996. Two years ago, at the company's request, he cancelled 70 per cent of the outstanding bonuses in exchange for a pounds 2m payment.

Last year's payment ended the obligation, although the terms were sweetened for Mr Doyle in December with the granting of options on 700,000 shares at the then market price. Since December Danka's shares have nearly quadrupled from 200p to yesterday's close of 783p.

Profits grew 63 per cent in the year to March from pounds 10.8m to pounds 17.5m. Stripping out the impact of last year's nine acquisitions, profits were 43 per cent higher, benefiting from a strong final quarter.

Mark Vaughan-Lee, chairman, said that hardware sales had grown sharply as people started to upgrade their office machinery once more. Margins from previous years' acquisitions had also started to improve.

Turnover rose 62 per cent from pounds 115m to pounds 186m, including a pounds 22m contribution from acquisitions. Earnings per share were 58 per cent higher at 42.4p and the final dividend of 3p makes a total for the year of 4.5p, a 20 per cent increase.

Because of the rapid growth in the share price, largely thanks to interest in the company's ADRs, which gained a Nasdaq listing last December, a four-for-one share split is planned.