Unidare shareholder boost in sale

LIGHT engineering group Unidare is to sell its Dutch subsidiary Daalderop to venture capital group 3i for €55 million.

The sale will see nearly 48m returned to shareholders in an unexpected windfall.

News of the Dutch sale was contained in the group’s interim results statement, which was published yesterday. The results showed a very strong first half profit performance by the group.

Following the announcements, shares in Unidare shot up 61 cents on the day to €3.90, an increase of 18.5% on the previous day’s close.

Daalderop manufactures electric water heaters, gas fired condensing boilers and central heating systems for domestic and international markets.

Although a major player in the Dutch market, it has never managed to impose itself internationally and remains a minority player in its sector.

The cash windfall promised is subject to satisfactory completion of the deal, the group said.

Unidare’s pre-tax profit growth for the six months to March was up by 102% to €6.5m, from €3.2m the same time last year.

Sales rose 12% to €110.8m from €99.2m.

Adjusted earnings per share increased 107% to 23.8 cent, compared to 11.5 cent previously.

Unidare said any future growth of the business required an enhanced international presence.

That would necessitate a significant investment in terms of capital and sales and service infrastructure, it said.

For those reasons the board concluded the interests of stakeholders would be best served by a sale of the Dutch business.

Unidare said its North American distribution operations, ORS Nasco, increased its sales by 18% to $102.3m (€82m) while EBITDA rose to $5.1m (€4.1m) for the period.

Elsewhere the group reported that British-based Eland Cables boosted sales to £8.2m (€12m), while EBITDA rose to £0.6m (€0.9m). Eland benefited from the decision to concentrate its business on cables, it said.

Meanwhile Unidare said the Dutch sale would have a significant impact on the full year’s trading results if it went ahead.

“We expect ORS Nasco and Eland to continue to make progress, but at a lower rate of growth than the first half, which had lower comparative bases.”

It said it will continue to add value to its existing businesses as the best way of maximising shareholder value.