PRE-TAX profits at electrical and security equipment company Silvermines rose by 40 per cent to £3.5 million sterling in 1995.

Strong organic growth underpinned the results, according to managing director Mr Clem Jansen. He said he was confident of further progress this year.

Expanding business in the Far East and two new acquisitions, Falcon and Pickering, would boost results in the current year, he said.

Silvermines is establishing a new, fully automated operation at its existing plant in Feltham in London at an initial cost of £4.5 million.

Silvermines Auto Products will initially produce electric motors for two major automotive companies. Six year supply contracts, expected to generate annual revenue of about £11 million starting in mid-1997, have been signed with these companies. This new plant would be funded through a leasing facility, he said.

After an increase in the effective tax rate to 23.6 per cent (from 14.3 per cent), Silvermines reported a 25 per cent rise in after tax profits to £2.68 million for 1995.

Earnings per share were up 13.8 per cent to 4.2p.

A final dividend of 0.85p per share has been declared, up from 0.73p, giving a total dividend for the year of 1.15p compared with 0.98p for 1994.

The results were reported in sterling and 1994 results were restated in the same currency because Silvermines tax residence is now in Britain.

Turnover rose by 24 per cent to £54 million while operating profits on continuing operations rose by 40 per cent to £4.3 million. Strong growth in operating profits led to an increase in operating margins to 7.89 per cent from 6.99 per cent.

Turnover in the motor technology division - Muirhead Vatric, Norcroft and American AutoMatrix - was 41 per cent higher. Orders are at record levels, according to Mr Jansen. A shift from traditional defence markets to aerospace and industrial markets boosted growth, he said.

Since the year end, Silvermines has agreed to acquire Pickering Controls in New York as a platform to expand Muirhead's business, into the US.

Turnover in the security products division rose by 62 per cent. Turnover in the electrical division fell by 9 per cent. But Mr Jansen said the company was "well positioned" for 1996.

Some £4.4 million was raised since the year end through the sale of Marine House and a further, £1.9 million through a placing of 3,201,100 share at 61.5p a share. The funds will be used to acquire Falcon and Pickering.

Following this fund raising, gearing fell to 11 per cent. But this will rise as funds are used for the new auto products plant in Feltham.

Medium term banking facilities are in place to ensure financial flexibility.

Silvermines has appointed Mr Greig Middleton as its financial adviser and British broker.