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[limpsfield chartist] 22/11/2000 09:51

Dragging this one up from the depths as it looks like they are reversing their longer term downtrendthats been in place for about 6 years. Looking for 200 in the short term with a break through here opening up 220 ish - but ;longer term looks like sentiment is a lot more positive over the past 12 months so interesting times ahead I reckon.

LC

[nickb] 27/4/2000 08:15

RNS Number:6678J
Caradon PLC
27 April 2000


Contact Jurgen Hintz, Chief Executive
Caradon plc 01932 850 850

David Bick
Holborn Public Relations 020 7929 5599
[e-mail]


Caradon plc

CARADON TO DIVEST PLUMBING BUSINESSES
AND SHARPEN FOCUS ON GROWTH MARKETS

Caradon plc today announces further significant steps in its strategic
transformation into a simpler business, focused on strong positions in growing
markets.

In the last two years Caradon has radically simplified its portfolio,
divesting 12 businesses and exiting a number of low-growth markets. The
Group's operations have been restructured and focused on achieving growth, as
delivered in 1999: Sales of the continuing businesses grew by 18%, operating
profits by 27%, and earnings per share by 38%.

The strategic transformation of Caradon is now being advanced to the next
stage with the announcement today of plans for:

* the disposal of all Plumbing businesses, Caradon's largest sector, including
leading UK brands such as Mira Showers, Stelrad Radiators, Ideal Boilers and
Twyford Bathrooms.

* the disposal of Friedland, the leading European Door Chimes company, to
focus the Electrical sector on the growing 'Intelligent Building Systems'
markets.

* the acquisition of Columbia, a Californian Aluminum Extruder, to expand
Caradon's vigorously growing Extrusion business, as detailed in a separate
news release.


Group Chief Executive, Jurgen Hintz, commented:

'We are determined to keep simplifying the Group, to concentrate resources on
opportunities for enhanced growth and higherreturns. Today's moves advance
these objectives. They will allow us to build scale and competitive advantage
in our chosen markets, and thereby generate sustainable economic value.

'After these transactions Caradon's exposure to growth markets will have been
trebled since early 1998, when less than a quarter of Group sales were in
markets growing over 5% per year. Going forward, three quarters of our
businesses will benefit from such underlying growth.

'The Plumbing businesses to be divested are performing well, following their
restructuring in the last two years. They benefit from a first-class
management team and from strong brands, combining to a market-leading position
in the UK. They are well placed to continue to advance under appropriate new
ownership.'


In 1999, the companies to be divested grew total sales by 5% to #370m, and
operating profits by 12% to #40m, before restructuring. The proceeds of these
sales will allow Caradon to make further strategic, value-enhancing
acquisitions and to fund possible further share buy-backs. CSFB is advising
on the disposals.

Going forward, Caradon will be concentrated on three sectors, which in 1999
grew reported sales by 25% and operating profit by 31%. Including the
full-year contribution of four recent acquisitions, the 1999 proforma sales of
the three sectors adds to over #1.2 billion, roughly doubling the Group's
scale in these markets, as follows:


1998 1999 1999
Sales # million Reported Reported Proforma

Indalex Aluminum including Easco
Solutions (Extrusions) 196 313 528 and Columbia

Intelligent Building including Brand-
Systems (Electrical) 267 288 470 Rex and eff eff
Alarm
Security Printing
Services 215 244 244
__________________________________________________________

Total 678 845 1,242
__________________________________________________________


In 1999 these three sectors achieved a combined return on invested capital of
16% pre-tax, before acquisitions. Each sector exceeded the Group's cost of
capital, delivering on our commitment to create economic value.


Indalex Aluminum Solutions (formerly Extrusions)

Indalex is a leading competitor in the strategically attractive North American
market for aluminum extrusions. Market volumes are expanding by over 7% a
year, driven by three factors: building demand in the sun-belt states, growth
of recreational products (from golf bag frames to camping vehicles), and
high-tech electronic component growth.

Indalex volumes and profits grew 19% in 1999, excluding the Easco acquisition
contribution. Customer demand for enhanced service performance and higher
technical specification product are driving this organic Indalex growth.
Ample opportunity for further fill-in acquisitions exists in this fragmented
industry, with over a thousand small U.S. extruders serving their local
markets.

Intelligent Building Systems (formerly Electrical)

Intelligent Building Systems (IBS) covers the Wiring Devices, structured
Datacom cabling, Security Controls and Building Controls markets, which are
converging in the channels of distribution and at the customer. Caradon is
now well represented in all key IBS segments. Growth of 5-8% in the Datacom
and Controls markets is driven by four factors: rapid expansion of data
transmission volumes, rising technical specifications, growing security and
energy management demands, and an increasing trend towards remote monitoring
and control of systems via the Internet.

The recent acquisition of eff eff Alarm and Brand-Rex provides Caradon with a
strong platform in these markets, with particularly strong positions in the UK
and Germany. Benefiting from restructuring and growth in Building Controls,
total IBS sales grew by 8%, and operating profit by 20% in 1999, before the
contribution of the recent acquisitions.

Security Printing Services

While the basic UScheque market remains large and stable, the services we
offer to banks and consumers supporting cheque order fulfilment are growing
rapidly.

Non-cheque sales at Caradon's Clarke American cheque company grew by 36% in
1999, approaching nearly a quarter of total revenue. This is driven by the
transfer of cheque re-ordering to our Call Centres and the Internet. These
services quadrupled last year. This growth, plus Clarke American's ability to
win share in the underlying cheque market, supported the 14% sales and 14%
profit growth reported by this sector in 1999.

END

[nickb] 27/4/2000 08:04

Thanks Chris an interesting post, i have picked some up this morning.

[chrisg] 07/3/2000 23:36

Tucked away in the small print of the Operating Review published yesterday there is some interesting detail.

The largest contributor to the Group’s operating profit is what they call the Security Printing division, which operates exclusively in the USA. But it is in much more than just plain printing and it made an operating profit of £49.4million. It’s the largest division in the Group and yet it is not in manufacturing. Its in business services. The main company in the division is Clarke American (100% subsidiary), whose business is that of helping their clients (mainly banks) strengthen their relationships with their customers. “This includes sophisticated fulfilment processes, including call centre services, internet solutions and direct marketing capabilities” according to yesterday’s statement.

Caradon (via Clarke American) owns and operates a telephone call centre in Charlotte which opened just a few months ago, and has a second call centre in San Antonio which will open within the next three months. These centres are substantial within Clarke American, and are very profitable and cash generative. The centres presently employ 600 staff, which indicates how serious this business is, and the second centre has still to open. More will follow where there is the demand. In any event, Clarke American “is accelerating its growth through continued investment”.

So the company which most people probably only think of as the company once which used to own Everest Double Glazing, actually earns the largest single source of profit from “telecoms̶1;, “internet services”, “direct marketing” and specialised printing using InTouchR technology.

And all of the above ignores the acquisition of the fast growing data-com and tele-com cable manufacturing business, Brand-Rex, announced just this week, whose products are so much in demand for the so-called “intelligent buildings” which office tenants now require.

For some reason, Caradon is not singing this transformation from the rooftops. Perhaps it is to avoid accusations of jumping on a bandwagon. But the facts are there, including the historical p/e of exactly 8. Check them out, because sooner or later the world will wake up to the transformation in Caradon.

Always do your own research first, but don’t miss out, because this one should zing, despite any falls in the market generally!! Even the Chief Executive just bought some more yesterday!