DERMOT Desmond's investment in and assessment of engineering, heating and plastics group Barlo as a recovery stock has been vindicated by interim results this week showing a strong profit recovery in the six months to end September.
Barlo had been going through a rough patch but improving market demand, a more favourable currency outlook and the benefits of a costly restructuring programme are beginning to show up in the results. In the six month period under review Barlo doubled its pre tax profits to £2.1 million with operating profits rising from £2.2 million to just over £3 million. In its last full financial year profits at Barlo nose dived 37 per cent to £3.5 million after an exceptional £6 million restructuring charge. Using the immortal phrase "in the absence of unforeseen circumstances", Barlo chief executive Dr Tony Mullins expects growth to continue during the remainder of the year.
While the profit recovery has more than doubled earnings per share to 122p dividend policy remains cautious. Shareholders must be content with an unchanged interim dividend of 4p a share.
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