Bodycote, the acquisitive metal treatment specialists, has made impressive use of the pounds 117m it raised in last November’s rights issue. Turnover in the first half was 63 per cent up on last year at pounds 100m, and profit before tax grew by 82 per cent to pounds 23m. It could have been even better, but for exchange rates which reduced profits by almost pounds 2m. Ongoing businesses contributed pounds 16m, an increase of 30 per cent, but last year’s acquisitions made pounds 6m, recording impressive improvements in profits and margins within months of being snapped up.
Margins in most of the group’s businesses lie between 20 per cent and 30 per cent thanks to a combination of tight cost control and pounds 120m of capital investment in new technology over the past eight years. The City has been wondering when the company will reach the limits of its growth.But Bodycote has only just scratched the surface of potential markets according to John Chesworth, chief executive. The company is the biggest of its kind in the world but it has less than 5 per cent of the global market for sub-contracted work and much less of long-term contract work, which accounts for less than 15 per cent of its existing business.The group is well spread between the UK, US, Scandinavia and western Europe and between the automotive, aerospace and power generating industries. The fact that Bodycote now has more than 100 operating units in 13 countries poses no problems over controlling the beast, Mr Chesworth claims.

The company still has pounds 21m worth of cash from last year’s rights issue, which could fund a sizeable acquisition.Several brokers upgraded full-year forecasts yesterday from around pounds 48m to pounds 50m Williams de Broe is looking for pounds 54.7m pre-tax. Bodycote’s share price has doubled in the past year and rose a further 35p to 942.5p yesterday. However, a prospective rating of 20-21 times looks high enough for now.. Hays, the logistics and business services group, is poised to expand its commercial services division with an acquisition of up to pounds 100m. Speaking yesterday after the group announced its biggest acquisition to date, the pounds 93.4m purchase of two continental European logistics businesses from Australian transport group Mayne Nickless, Hay’s chairman Ronnie Frost said the group’s commercial division remained the focus of growth.
Hays was looking to add a new activity to the commercial side which includes high-margin businesses like mail order, billing and supplying surgeon’s operating packs to hospitals.Mr Frost quashed speculation that the group might consider a hostile bid for rival Christian Salvesen, having had its friendly approaches rebuffed last August “It really has gone. I would have loved to do a deal if we had got a recommendation.

But as soon as Salvesen went public, they killed it.”More such deals in logistics are likely over the next year, according to Mr Frost, including a move into Italy, possibly to support a French customer looking to expand, and later Spain. Hays is also looking to make a small acquisition, probably less than pounds 50m, in German food distribution to complement its Mordhurst business.Though Hays has low gearing, Mr Frost emphasised the importance of finding the right opportunity.Analysts were positive on this latest deal, but preferred to see the group expanding in faster growing areas. Andrew Ripper of Merrill Lynch said: “I’d rather they do this kind of small acquisition than buy Salvesen. Hays has performed well in distribution, but the logistics sector generally has been abysmal. If Hays were a pure logistics company and not in areas like personnel, they would not have such a good rating.”Mr Frost said the acquisition of FDS in France and the smaller Van der Heijden distribution business in Holland for pounds 72m cash plus debt would enhance earnings by around 3 per cent in the first year after pounds 5m integration costs, and with combined profits of pounds 8.8m and “substantial” growth prospects could add at least pounds 5m to profits. Prior to the acquisitions, analysts had pencilled in pounds 180m for the year to June 1998.Mr Frost said that the new businesses, which have combined sales of pounds 150m were a good fit with the group’s existing pounds 255m logistics operations in continental Europe. He said that adding FDS, which distributes non-chilled food and other goods to Hays’ Frils business in France, which is mainly a chilled goods distributor, would offer customers in both businesses a greater choice.Van der Heijden adds pounds 35m of sales to Hay’s pounds 11m Dutch distributor, making the company a key player in Holland.

Analysts said the strengthening logistics on the continent relative to the more difficult UK market, where margins have been under pressure from the supermarkets was positive.. Wassall, the manufacturing conglomerate, yesterday triggered speculation about a possible pounds 500m acquisition spree after it sold its remaining 19.5 per cent stake in General Cable Corporation of the US for almost pounds 100m. It has now raised almost pounds 500m from demerging the business. Speculation immediately turned to Wassall’s publicly disclosed holdings of 5 per cent in Thorn lighting group, Europe’s second-largest lighting group, which is capitalised at pounds 175m, and its 2.9 per cent stake in McBride, a quoted company making own-label and minor brands of soap powders, toiletries and personal care products. McBride is capitalised at pounds 260m.
Wassall would look for one or possibly two acquisitions costing pounds 400- 500m which fit its acquisition criteria, preferably in the UK or US but possibly in Europe, said David Roper, deputy chief executive.It was looking for quoted companies which were currently underperforming or trade sales of subsidiaries of larger companies which no longer fit their owners’ criteria, he said.Wassall’s interests include the manufacture of suitcases, bottle tops and sealants and the preferred sectors would be light engineering or manufacturing rather than specialised or high technology businesses.The planned disposal of the remaining holding in General Cable was well flagged, but the price was ahead of expectations and was completed earlier than scheduled. Wassall’s majority stake was floated in New York in May at $21 a share. The remaining 5 million shares were placed yesterday at $31 each, just 25 cents below the closing price on the New York market on Tuesday night.Wassall had announced its intention last year to float the entire company in the US, but the minority stake was retained in order to avoid depressing the price of the float.At the time of the float Wassall had undertaken to hold its remaining stake for at least six months, and had expected to take as long as 12 months to realise it.

But in the light of the recent strong demand for General Cable shares, Wassall’s New York advisers agreed to release the company from its undertaking and place the shares ahead of schedule.The successful disposal immediately raised speculation about Wassall’s plans for its newly acquired war chest. Mr Roper said yesterday Wassall had more than pounds 300m on deposit in the bank earning around 6 per cent and the money would be reinvested as soon as possible to maintain the return on capital.. Regalian, the specialist residential property developer, and three Singapore- based partners yesterday bought the former West London Air terminal building in Cromwell Road for pounds 60m. They plan to spend a further pounds 60m to convert the building into 400 residential apartments and build a 25,000sq ft leisure centre over the next two years.