Clydesdale halts float as profits miss target

CLYDESDALE Group, the Scottish company that claims to be Britain's third-biggest electrical retailer, yesterday cancelled its plans for a stock market float after profits failed to match expectations.

The company was expected to be capitalised at about pounds 80m on its debut later this month. It hoped to raise about pounds 30m to eliminate debt.

But late yesterday afternoon, the company announced that operating profits for the year to 31 March, at pounds 5.6m, had failed to match the pounds 7m forecast when the listing was mooted.

The disappointing profits came despite the company hitting its sales target of pounds 141m, a rise of 27 per cent. Despite failing to match forecasts, operating profits were still ahead 26 per cent.

The pre-tax figure was pounds 2.6m against a forecast of pounds 4m.

Clydesdale has expanded quickly in the past three years under the guidance of Hank van Eck, the Dutch chief executive brought in by institutional investors to turn the company around in the mid-1980s.

It has 130 outlets in Scotland and the North of England and had plans to open another 20.

Clydesdale was originally a management buyout for pounds 30m in 1983, which soured amid mounting debt and an unsuccessful foray into England.

Mr van Eck picked up 51 per cent of the equity when he joined in 1985, but he has since reduced his stake to 29 per cent.

NM Rothschild and NatWest Securities were advising Clydesdale on the flotation.