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June 18, 1987

RELUCTANT UK TELECOM DEBUTANTE VANDERHOFF ACCUMULATES BY ACQUISITION

By CBR Staff Writer

Back in 1984, Vanderhoff Ltd beat off the likes of Plessey to land a major order to supply British Telecom with subscriber line test equipment but only recently has the Nuneaton-based company really started to spend the proceeds of what turned out to be a UKP17m deal. Last year, it acquired answering machine manufacturer Recorder Corp from Thorn Ericsson; Eagle Distributors when Audiotronic was broken up; and Elcom Ltd of Fleet, Hampshire, a PABX power supply maker. Since the start of this year, Vanderhoff has paid out UKP1.2m for AB Precision (Poole) Ltd, a UKP3.5m per year manufacturer of defence products; UKP1.1m for a similarly-sized bell set maker, Lero Industries Ltd of Coventry; and a nominal sum for a Cheltenham-based bureau specialising in computer aided design services to printed circuit board developers. And, the acquisition trail is unlikely to end there. Future purchases, however, are likely to be for shares or shares and cash rather than straight cash as, despite pulling out of a proposed flotation last Autumn, the company is still committed to obtaining quotable paper at some point. Any listing, though, is likely to be postponed until the new purchases have all been integrated into the business and until the directors feel that, unlike last Autumn, the City’s valuation of the business matches their own perception of its worth. Vanderhoff grew from pre-tax profits of UKP556,000 on sales of UKP5.3m in calendar 1984 to profits of UKP2m on sales of UKP11.6m in 1985 and, according to group finance director Martin Bray, the results for 1986 when they are released shortly will show a substantial profits increase on turnover up around UKP14m. With the Business Systems subsidiary, formed by merging Elcom and Recorder Corp, starting to make a positive contribution, and AB Precision also already profitable, Vanderhoff looks on the road for further major growth this year. So, it shouldn’t be too long before backers like Birmingham-based broker Albert E Sharp’s Sharp Technology Fund, headed by Apricot chairman Lindsay Bury, can sell their shares on the Stock Exchange and realise a large profit on their investments.

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