Engineering and technology group Silvermines has announced a 54 per cent increase in first-half profits before tax and exceptional items to a record £3.01 million sterling.
The company said all four divisions - aerospace, security, electrical and broadcast and telecommunications - performed well despite the strength of sterling and problems in Asia.
The company also announced the acquisition of Multipoint Communications on July 14th for a cash consideration of £1.3 million. The Essex-based firm specialises in the design, manufacture and installation of fixed, mobile and flyaway earth stations. Silvermines said Multipoint, a family-owned company in which venture capitalists 3i had a stake, fitted well with Continental Microwave Limited in its broadcast and telecommunications division.
Silvermines continues to look for acquisitions in all four of its divisions although managing director Mr Clem Jansen said future acquisitions would be paid for with cash because of the low value of the company's paper at present.
Turnover in the six months to the end of June was up by 53 per cent to £57.7 million while the group's order book increased by 26 per cent, including a substantial improvement in its Asian orders. Sales in Britain and Ireland jumped by 92 per cent to £35.4 million while sales to the rest of Europe also increased, rising by 71 per cent to £9.2 million. North American sales rose by a more modest 15 per cent to £5.5 million.
However, turnover from Asia dropped to £2.6 million from £4.3 million but Mr Jansen said the intake of orders from Asia, which fell away in the second half of last year, recovered in the first half and the company expected a solid second-half performance.
The Asian order book now stands at over £4 million. The security division won new contracts from Singapore, Thailand, Hong Kong, South Korea and China while Silvermines received a £100,000 contract from Taiwan this week.
Mr Jansen says there are some signs that the region is recovering although conditions vary from country to country with some states, like Singapore, remaining fundamentally strong while others have yet to see an improvement.
On a divisional basis, operating profits in the aerospace division rose by 65 per cent to £1.16 million. Silvermines said there was strong growth in repair and overhaul activity and it plans to expand these activities beyond Heathrow airport to other major airline operators in Britain and overseas.
Profits in the security division rose by 107 per cent to £1.46 million, boosted by the acquisition of the Active Imaging Group in December 1997. Although loss-making prior to acquisition, Active Imaging traded profitably in the first half.
The electrical division reported operating profits of £609,000, a 74 per cent increase on last year while broadcast and telecommunications accounted for profits of £1.0 million, a 12 per cent rise.
Headline earnings per share increased by 48 per cent to 2.46p and Silvermines proposes paying an interim dividend of 0.50 pence per share, an increase of 11 per cent on 1997. The company's share price was unchanged in Dublin at 42p following the results. Mr Jansen said the board had received shareholder approval for a share buy-back and that remained part of its strategy.
