Glynwed, the engineering group best known for its Aga and Rayburn cookers, this week announced the long-awaited disposal of its metals distribution activities.
The stainless steel and aluminium distribution businesses sold for £100m to a privately owned US company comprised the bulk of Glynwed’s metal services division.
Chief executive Tony Wilson expressed delight at the sale price, some £20m higher than analysts’ expectations. Wilson revealed that Glynwed was also in talks to sell its metal processing businesses.
‘We’ve had some interest expressed and we’re being careful to take our restructuring strategy forward. A disposal here is a medium-term objective,’ he said.
‘We want to be sure we are getting the right price.’
Metals distribution made an operating profit of £10.1m last year on turnover of £268m. Net assets at the year-end were £60m.
In recent years the businesses have expanded across Europe, with activities in Holland, Spain, and Ireland.
The buyer is Kingston Metals, part of Henley Management. Trading under the Aalco, Cashmores and Amari names, the division employs 1,250 staff, mostly in the UK.
The businesses sold will continue to use their present trading names, although known collectively as Amari Metals.
The sale does not include the plastic sheet and rod distributors Amari Plastics in the UK and US-based Port Plastics, which were included in the distribution business for reporting purposes.
Metals processing, which accounts for a third of profits after the disposal of distribution, produced operating profit of £30.5m last year, a margin on sales of 9.9%.
Wilson said he expected the group to gain £95m net from the sale of metals distribution, with the proceeds to be targeted towards acquisitions in Glynwed’s remaining core divisions, pipe systems and consumer and food service businesses.