Recovering copper coil and bakeware group Frederick Cooper announced plans last week to look for acquisitions after unveiling strong cash generation over the past year.
Chairman Geoff Gahan said the company had £12m in cash to fund acquisitions, although it had £7.2m of borrowings at the year-end in July.
The cash includes £3.2m raised through selling its loss-making Bonny Products arm in the US, a further £500,000 from a property sale and £400,000 from tax refunds.
The sale of Bonny Products and the closure of Cooper’s US bakeware businesses resulted in an exceptional charge of £3.6m, which pushed the company into a £1.8m deficit.
However, the group’s architectural hardware business saw profits increase £100,000 to £1.96m – though this was mostly wiped out by the strength of the pound, which hit exports of bakeware to Germany.
Operating profits from continuing operations were £2.2m, down from £3.3m.
Michael Blogg, house broker at Charterhouse Securities predicted respectable if unspectacular progress in the current year.
`With a gearing of 130%, forecast interest cover of 3.8 times and a price/earnings ratio of 3.5, Cooper’s ability to finance acquisitions is severely constrained. However, modest steps should be possible,’ he said.