Heiton poised to finalise Poland deal as pre-tax profits rise by 16%

Heiton Holdings, the Atlantic Homecare DIY group, hopes to finalise the acquisition of a 20 per cent stake in a Polish builders' providers company in the first quarter.

Announcing the expansion at the presentation of interim results, which showed a 16 per cent rise in pre-tax profit to €11.8 million (£9.3 million) in the six months to October 30th, 2000, group chief executive Mr Leo Martin said the acquisition would provide a platform for further development in Poland.

He said the deal had been agreed and its closure was awaiting completion of legal formalities. The stake will cost €1.6 million and Heiton will have the right to increase this to a majority holding.

Such a move would depend on how the trading link developed. The Polish company, which has not been named, has eight branches and does not trade outside Poland.

Heiton has been developing its extensive property portfolio. These include planning permission for 125 houses on an undeveloped tract of land at Mullingar, Co Westmeath, and a planning decision for an office redevelopment of Heiton's Ringsend property in Dublin. These are expected to provide a gain of more than £10 million above book value.

Another development has been the inception of Buy4Now, the online store in which it has a 7.5 per cent stake. Superquinn and Eircom have the majority shareholdings. There are 15,000 registered users and the site is receiving one million hits weekly. Mr Martin said that, during the first nine weeks of trading, it had received 300 orders, with an average of £100 per order.

Heiton was very pleased with the website's development, he said. Atlantic made a positive contribution to the group interim results with sales up 26.9 per cent and "strong profit growth". It opened two further stores and additional outlets in Liffey Valley and Swords should open within the next six months.

The group results showed an 18.8 per cent rise in sales to €192.3 million. Profit margins fell to 6.13 per cent from 6.28 per cent. Net debt increased to €55.5 million from €30.25 million, pushing the gearing up to 52.4 per cent from 32.6 per cent. However, the interest is well covered at 6.9 times, giving the company plenty of room to expand further from internal sources.

Earnings per share rose by 21.8 per cent to 21.0 cents from 17.2 cents. The interim dividend is being increased by 22.1 per cent to 5.8 cents.

The group's core merchanting business saw sales rise by 16.1 per cent. This division continues to seek add-on businesses and new developments, such as land purchases in Santry, Dublin.

The market endorsed the latest results with an eight cent rise in the share price to €3.35, before falling to €3.28, a rise on the day of one cent.