Market welcomes Cullens expansion

CULLENS, the convenience store chain, yesterday blamed the recession for its inability to find potential franchisees. With budding entrepreneurs unwilling or unable to raise bank finance, the company said a planned expansion of its 27-shop chain would have to be funded internally.

The market warmed to the group's plans, despite a warning that internal growth would mean an increase in borrowings. The shares rose 4.5p to 19.5p despite a 34 per cent drop in pre-tax profits from pounds 608,000 to pounds 401,000.

Profits would have been even lower had Cullens not cashed in the assets of a dormant company pension scheme worth pounds 400,000. Offset by the costs of developing new selling ideas such as the first Cullens Patisserie, the pension surplus led to an exceptional profit of pounds 239,000, which easily outstripped profits from trading of pounds 162,000.

Peter Matthews, chief executive, blamed lower profits from the sale of franchises and lower rental receipts, but said that a jump in administrative expenses was part of a planned increase in the group's management resources. 'We are now ready for the next stage in our development.'

Earnings per share were almost half 1992's 1.5p at 0.8p. The unchanged final dividend of 0.5p follows a passed interim payout.