Traidcraft seeking £3.25m in ethical float

Traidcraft, the UK's biggest "fair trade" company, is seeking to raise £3.25m from a share offering to ethically minded investors, to finance expansion.

Although Traidcraft will not be listing on a stock exchange, its broker, Brewin Dolphin, will make a market in the new and existing shares, on a "matched bargain" basis. The minimum investment required is £500. The new equity will make up some 60 per cent of the company's share capital.

Traidcraft, which sells food, textiles and crafts sourced from the developing world, has seen its turnover grow 40 per cent in the past two years to £10.4m for the last financial year, when it made a profit of £119,000.

The company typically pays farmers more than the prevailing market price for goods, to help alleviate poverty, and it makes a smaller margin on selling on the goods than most food groups. Paul Chandler, the chief executive, said the company was a plc rather than a charity because it wanted to show that it was possible to trade "non-exploitatively" and still make a profit.

"We are looking for investors who want to see their capital work to fight poverty," Mr Chandler said. "We do aim to provide a reasonable return but that it is not our number one priority."

About half of Traidcraft's sales are made by 4,250 activists who sell the goods direct to the public.