Adare Printing plans to expand as profits near £11m

ADARE Printing Group which has announced strong profit growth, from £7.76 million to £10.94 million in the year ended April 30th 1997, is planning to almost double its size over the next two years.

The "broad objective" is to achieve a turnover of £200 million by 1999, chairman Mr Denis Bergin said in his preliminary statement. Around half the upsurge is expected to come from acquisitions and half from core growth.

Sales rose from £70.1 million to £115.88 million last year. Since then it has acquired the business of Platignum with sales of almost £8 million and the plan is to continue to "make acquisitions in its strategic path of branded goods and services in niche print and stationery sectors".

The group, he added, was assembling scale to its activities to ensure that it was a "solid, cash generative, entity" that would achieve its target by 1999.

Adare also has a capital in vestment programme in place which will call for some £8 million per annum in each of the next three years to achieve its ambitions. He noted that it was already half way through year one. The group said it was committing significant investment in its IT systems across the group.

Asked about its ability to achieve its growth target on a balance sheet which shows a negative net worth of £6.1 million, and net borrowings of £24.6 million, finance director, Mr Peter Lynch, said cash flow would repair the balance sheet. And if a significant acquisition came along, the group would have a rights issue. He noted that Adare was negotiating the acquisition of a second company at the same time as it purchased Prontaprint last year and had that gone ahead, there would have been a £24 million rights issue.

The latest published growth largely reflects acquisitions. These accounted for £3.5 million of the group's £12.9 million operating profits. Excluding these still indicates an underlying growth of 11.2 per cent.

Reflecting real growth, diluted earnings per share rose from 48.37p to 62.21p, an increase of 28.6 per cent. And shareholders are to benefit with a 50 per cent rise in the final dividend from 2.986p to 4.479, bringing the total up by the same percentage to 7.598p. That is 9.1 limes covered by available earnings.

The group now has 17 operating companies with 83 per cent of pretax profit and 87 per cent of sales being generated in Britain.

Mr Bergin said the business systems division now has sales of almost £50 million following the amalgamation of Carwin.