Holliday readies for acquisition

HOLLIDAY Chemicals, the Yorkshire-based dyes manufacturer that was floated in March, is preparing to issue paper for its first acquisition, writes Robert Cole.

Two purchases are under scrutiny, one likely to be about twice the size of the other. Combined they could amount to pounds 30m.

Expansion plans came as Holliday published its maiden set of results as a quoted company. Pre-tax profits were pounds 5.7m for the six months to 30 June, compared with pounds 5.1m.

The company said the interim profits were depressed by unfavourable movements in exchange rates. Three-quarters of Holliday's sales are overseas. However, the company said its hedging operation will bear fruit in the second half. It estimates a pounds 1m benefit in the second half of this year and pounds 2m next year.

Holliday, which makes dyes and colourings for myriad uses, was also hit by the cancellation of an order by one of its hair-dye-making customers, but expects to regain the business.

Philip Morrish of the stockbroker Smith New Court is forecasting that Holliday will make pounds 15m in the full year.

The shares were floated at 195p and peaked in early June at 225p. They rose 3p to 214p yesterday.

Earnings per share - adjusted for the effect of the flotation - were flat at 5.9p. The interim dividend is 1.6p. The company said its policy was to pay 40 per cent of the total at the interim stage - an indication that the total payment will be 4p.