Hopes high for Inishtech sale

JAMES Crean is confident that it will sell off Inishtech, the print and packing subsidiary, by the end of the year. It also expects reasonable profit growth in the current financial year.

The group is about to appoint a merchant bank to start the auction process for Inishtech, according to Crean director, Mr Martin Delany. Crean is in the process of buying the remaining minority shares in Inishtech, at 550p per share. It now controls 92.7 per cent of Inishtech.

Crean has not yet received acceptances from 75 per cent of the shareholders which would allow it to compulsorily acquire the outstanding shares (it has received acceptances from around 80 per cent of the value, the other requirement). Mr Delany said the group was confident the necessary level of acceptances would be received which would allow the compulsory acquisition of the outstanding shares.

Asked about price, he said there was "no reason why a pie of at least 12.5 (the same level it is paying at 550p per share) would be received". He noted that p/e's in Britain range from 14 to 15. However, the offer document sent to shareholders yesterday said the indications from potential buyers to date was for a price of less than 550p per share.

Inishtech is expected to make a positive contribution to group earnings this year. The bulk of growth from Inishtech will be organic and operating profits are now running ahead of last year.

The Meridian and Elite operations, acquired in January are expected to make a positive earnings contribution.

Crean will lose around £0.68 million in annual interest payments from EJA, the Dutch office products company in which it had a 50 per cent shareholding before selling out last year, following an arrangement with EJA's bankers. While this deferral of interest may continue beyond July 1996, Crean is confident that all the deferred interest will be paid and the £9.5 million principal will be paid, as scheduled, in the year 2000.