Umeco delighted the City last week with a 28% rise in half-year profits to £3.5m and a 25% hike in its interim dividend.
Shares in the company, which supplies fasteners and chemicals to the aerospace industry, jumped 52p to a new high of 532.5p. This more than doubled the value of the stakes held by directors Brian McGowan and Clive Snowdon.
The two men took over Umeco two and a half years ago after their own company, Burnfield, was taken over – they bought £2m of shares, which were worth just 245p each at the time.
The group began its European expansion earlier this year by purchasing the ASED Group, a European distributor to the aerospace and defence industry, for £11.8m in cash.
This acquisition, together with Aerovac Systems, bought in March 1999, has left Umeco with a high level of gearing which Snowdon said would be reduced by strong cash flow.
`But our interest cover is very high, at around 11 times,’ he said, adding that he is not worried about the level of gearing.
Snowdon said continued UK expansion would come through winning contracts and setting up new sales offices, as well as through small bolt-on acquisitions.
`In the EU there are only a few companies which it makes sense to acquire,’ he said. This gives the specialist aerospace distribution and services group – whose customers include Eurocopter and BMW Rolls-Royce – increased scope for growth, but also rules out larger acquisitions, he added.
Company Pre-tax Turnover Dividend profit £m £m p This Last This Last This Last
Arlen 0.41 -0.79 15.1 20.2 nil 0.4Interim to 30/6/99
Chamberlin & Hill 1.56 1.60 15.0 15.5 3.55 3.3Interim to 30/9/99
Frederick Cooper -1.84 0.76 45.4 52.3 0.8 nilYear to 31/7/99
Fenner 11.1 15.2 196 285 5.675 5.6Year to 31/8/99
Pressac 21.4 14.0 194 117 4.45 4.14Year to 31/7/99
Railtrack 236 224 1,275 1,286 9.3 8.7Interim to 30/9/99
Scottish Power 185 247 1,531 1,444 8.27 7.5Interim 30/9/99
Shell 2,426 1,705 25,723 24,300 nil nil3rd Quarter to 30/9/99
Umeco 3.21 2.73 39.7 26.7 3 2.4Interim to 30/9/99}}