IWP International, the household products and distribution company, has increased its profit before tax and exceptional charges by 13.4 per cent from £19.06 million to £21.61 million in the year to March 31st, 1996. The results are somewhat better than brokers' predictions.
A further rise in profits is expected this year. "Our growth is continuing right across the board," said chief executive, Mr Joe Moran. The group is interested in expanding into markets in eastern Europe, an area which Mr Moran describes as having "good prospects".
IWP director, Mr Richard Hayes, who is responsible for acquisitions, said IWP might evaluate the acquisition of a distribution business in eastern Europe. That could be followed up "with a manufacturing set up".
The group is continuing to look for acquisitions in the personal care and household products business, said Mr Moran. And IWP would be interested in expanding its labels business if a "good" company in that area of business became available.
Last year, group sales rose 10.8 per cent, from £150.1 million to £166.3 million. Turnover in personal care and household products increased from £99.6 million to £108.2 million while distribution and packaging rose from £48.7 million to £58.1 million.
Operations in the Republic account for just 17.4 per cent of group sales by destination. Most, around 49.7 per cent, are generated in continental Europe.
Mr Neil Popham, a director and chief executive of the personal care and household products business, said the Dutch operations produced a very good performance in a flat market.
Sales to eastern Europe increased with the Polish market proving buoyant. The Dutch companies continued to focus on cost controls. They replaced about 30 per cent of their 2,200 products with new lines which offered better margins.
There was a setback in Britain because of a decline in the haircare market with products becoming widely available in the retail market. Air fresheners had a positive year with higher volumes and margins.
The Tiger Tim firelighter products reversed a three year profit slide. Profits rose by around 10 per cent.
Burlington Industries, a British toiletry and gift products company, purchased for £9.6 million last December, had "problems bigger than what we expected", said Mr Popham.
Labels had a "good year", said Mr Moran. Despite the strong pound relative to sterling, New Era Packaging exported over 60 per cent of its output. And distribution "is doing well and continues to grow".
Group earnings per share grew from 36.1p to 41.1p. A final dividend of 5.7p net per share has been declared, making a total of 9.7p up from 8.8p.
IWP had to contend with an exceptional charge of £3.46 million, up from £2.4 million. This occurred following the sale of its carton businesses and arose from a write back of acquisition goodwill of £5.3 million, offset by a profit on the disposal of £1.8 million.
Gearing is at a manageable 58 per cent. Net cash flow is expected to increase from £6 million to around £9 million following the disposal of the carton businesses. However, the benefits from this are not expected to filter through until 1997/8 as the redemption of preference shares has cost the group £13 million this year.
