Oglesby & Butler Group, the manufacturer of soldering irons, is paying its first dividend since 1989. Although profit before tax fell from £553,095 to £462,139 in the year ended March 31st 1997, a dividend of 1p per share has been declared. As the dividend is being paid out of royalty income, it is tax free in the hands of the recipients. The dividend is 4.1 times covered by available income. The first quarter is better than this time last year, said chairman, Mr Nevin Dowling. And renewed profit growth is expected for the remainder of the year. However, he cautioned that the "volatility of world markets is a cause for concern as are potential adverse currency fluctuations, despite steps taken to hedge against such adverse effects". Nevertheless, its policy to invest in plant and new products has placed it "in a strong competitive position". The group is to launch a new product, a gas-powered glue gun, shortly. Trials are now taking place, said Mr Nevin. The latest results show a drop in sales from £4,343,618 to £3,803,213. Earnings per share fell from 4.44p to 3.68p.
"Variations in economic conditions in the group's world markets during the year meant that the group did not experience the growth expected", Mr Nevin noted. The softening of sales in the US market at the half way stage continued into the third quarter. There was a recovery in the last quarter and this has continued into this year. The drop in sales is attributed to restructuring and destocking in the third quarter by some of its US customers. Although margins were maintained, profits were down. Oglesby & Butler is in a strong financial position. It got rid of its bank debt last year and now has net cash of about £170,000.
