Berry Birch lifts dividend and eyes main market

BERRY Birch & Noble, the financial adviser quoted on the Unlisted Securities Market, is increasing its dividend by 66 per cent as a mark of its confidence in its future, writes Paul Durman.

The company is seeking acquisitions in the Midlands and the Manchester area and is keen to move up to a full listing at the earliest practical opportunity.

John Cole, managing director, said that such an opportunity might arise if Berry Birch made a substantial acquisition of another company, in excess of pounds 1m.

The company is otherwise tempted to wait for the dying USM to be merged with the main stock market, which would allow Berry Birch to obtain a full listing more cheaply.

Mr Cole believes that Berry Birch's shares, which were up 9p yesterday to 170p, are now high enough to allow the company to finance acquisitions with paper rather than with cash.

Pre-tax profits in the year to the end of January rose from pounds 815,000 to pounds 1.06m. This continues Berry Birch's steady recovery since 1989, when an electronics sideline and the weak housing market pushed the group into loss.

Earnings rose by 27 per cent to 12.8p a share. The 5.3p dividend, including a 3.3p final, is covered 2.4 times.

About two-thirds of the company's pounds 6.4m turnover comes from financial counselling with pensions, mortgages and commercial insurance making up much of the remainder.

Berry Birch also runs a profitable business providing directories of the insurance services that companies like BP and British Gas arrange for their employees.

The partners of Menzies, a medium-sized firm of accountants, have recently exercised options priced at pounds 1 to give them an increased stake of about 12.5 per cent in Berry Birch.

Menzies passes its financial services business to Berry Birch. An even closer working relationship was expected, Mr Cole said.

Derek Berry, chairman, and David Birch, another of Berry Birch's founding directors, retain substantial holdings in the company even after selling some shares to Menzies' partners.