Heiton, the builders merchants and DIY group, yesterday announced record profits for the six months to the end of October, 1998. The company predicted the construction industry in the Republic would remain buoyant and said as a result it was optimistic about its own prospects.
Heiton said pre-tax profits rose 9.7 per cent to £6.3 million (#8 million) and turnover rose almost 16 per cent to £97.3 million (#123.6 million). The directors declared an interim dividend of 3p, an increase of 0.9p over last year, which includes an additional 0.6p brought forward from the final dividend to allow shareholders benefit from a tax break.
The company's managing director, Mr Richard Hewat, said almost one-third of the 15.6 per cent rise in turnover was due to the acquisition of the British builders, Cooper Clarke Group, last September. The £19.8 million sterling (#28.1 million) purchase of Cooper Clarke was of major strategic significance for the Heiton group, he added, and meant that in a full year some 20 per cent of turnover would be British-based.
The company said it was considering expansion into Poland, and had two staff members already in the central European country to research the market. Executives said although they would like also to acquire a business in Northern Ireland, its enquiries so far had been met with "unrealistic" price demands. This situation could change if sterling dropped in value against the euro, they added.
In the Republic, he said, Heiton continued to benefit from growth in the construction market. While farm building had slumped as a result of the agricultural sector's current difficulties, construction elsewhere was expected to grow at around 7 per cent. In the third quarter of 1998, applications to local authorities for planning permission had soared 28 per cent compared to the same period in 1997.
The company said its repositioning of its Atlantic Homecare chain was continuing, with an added emphasis on furnishings and high-quality fittings. The chain was also planning to close some of its smaller outlets, opening larger ones with more retail space.
At a press conference yesterday, executives at the company said they had examined the effect of the reduction in corporate profit tax on Heiton's earnings. The Government move - which will see tax for companies drop from 32 per cent in 1998 to 12.5 per cent in 2003 - is set to generate a 29 per cent increase in earnings per share, assuming flat earnings.
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