Unidare profits to beat expectations

Industrial supplies group Unidare will significantly exceed market expectations when it reports full-year figures in November.

Operating profits at the company are expected to hit €10.5 million, according to a trading statement released yesterday.

The figures for the year to the end of this month compare to projections of between €8.8 million and €7.5 million.

Last year, Unidare recorded operating profit of €7.8 million.

Pre-tax profits are now forecast to hit €8.5 million, about 27 per cent ahead of broker projections of €6.7 million and considerably stronger than the €5.3 million recorded in 2003.

The company said that each of its three operation companies - ORS Nasco in the United States, Daalderop in the Netherlands and Eland in Britain - contributed to the improved performance.

Mr John Sheehan, analyst at NCB, the company's broker, said that Unidare had benefited from the impact of recent cost-cutting, together with growth in its key US market.

"Unidare has broad exposure to the US economy given the huge range of products it distributes there, and that market has been growing," he said.

He said railway investment in Britain had boosted Eland, which mainly distributes cable. Water heater manufacturer Daalderop, which has been a "steady earner" for the group, appeared to have overcome the rising price of copper and relocation to new premises, Mr Sheehan added.

Unidare shares jumped more than 8 per cent to €2 in light trade yesterday, matching their high for the year and a level not exceeded since early 2001, when falling margins saw the company undertake a restructuring programme.

The trading statement is certain to reignite speculation among shareholders about a resumption of dividend payments. Dividends were cut three years ago and then suspended in 2002.