HEITON Holdings, the builders' merchants and Atlantic DIY group, is looking for further strong growth following the good profit upsurge in the "first half. Pre tax profits jumped by 40 per cent from £2.7 million to £3.8 million in the six months to October 31st, 1995.
Shareholders will benefit partly from this upsurge. The interim dividend is being raised from 0.8p net a share to 0.95p a share, while the dividend cover has widened from 4.65 to 5.64.
Heiton is looking for continued growth in all its core business sectors. However, the trading pattern will vary.
"While Heiton sees a flattening in the growth in the housing sector - between zero and 2 per cent - business from large building contracts is expected to grow at a rapid rate.
"We are very confident," said managing director, Mr Richard Hewat. While the group, continues to look for acquisitions, envisaged growth will be organic and in the domestic market.
Sales in the first half grew by a modest 8 per cent from £61.5 million to £66.4 million and profit margins improved from 4.4 per cent to 5.7 per cent. Earnings per share went up from 3.72p to 5.36p. Gearing was reduced from 30.5 per cent to 23.4 per cent while net assets per share grew from 62.5p to 66.7p.
The profit growth in the first half is attributed to better profits from builders' merchants and steel, while the Atlantic Homecare division moved into profits. Sales in builders' merchants and steel increased from £52.7 million to £57.7 million. Builders' merchants benefited from buoyancy in the market, while steel won a number of important contracts.
Sales in Atlantic fell from £8.8 million to £8.7 million due to the closure of three small stores but the cost/income ratio improved.
The shares, which were unchanged 79p yesterday (12 month high 83p; low 65p) are on a prospective price/earnings ratio of 8.5, assuming earnings per share rise by 40 per cent to 9.4p.
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