Manchester-based Carbo, the recently refocused industrial abrasives manufacturer and distributor, could spend up to £10m on acquisitions this year.
Carbo, which employs 1,470 people mainly in the UK and Germany wants to grow its abrasive arm into a £100m turnover business in 18 months, said chairman Bill Goodall.
Last year it completed its exit from mechanical engineering with the sale of its Bryan Donkin mechanical engineering businesses for £13m, and acquired UK abrasives distributor Noble Macaulay. In February it added German abrasives distributor and family business Dilumit.
Last week Carbo reported a pre-tax profit (before exceptionals) of £800,000 to 31 January 1998, compared to £500,000 the year before. Turnover was down to £80.4m from £85.4m. Turnover in abrasives, which accounts for 81% of group sales, was down slightly on last year from £69.6m to £65m.
Restructuring costs of £600,000 included the rationalisation of its bonded production facilities in the UK and Germany. It closed its Abrafract factory and transferred production to Trafford Park.
The abrasives operation achieved margins of 3.1%. Carbo is aiming for a minimum 6% return on sales by 1999/2000.
The other arms of the firm are plastics and Polybau. The plastics business, which supplies the white goods industry, had a turnover last year of £10m (11% of group turnover). Excluding Scotland, it reported sales up 6%, and operating profits up 24%. The Polybau business had a £5m turnover (6% of group turnover).
Both businesses could be sold off, said Goodall.