Jones Group expects cash surplus of £20m
JONES Group, which is selling off its shipping and manufacturing business, is expected to return a cash surplus of more than £20 million to shareholders this year.
The payout implies a value of 157p per share for Jones, even before taking account of the distribution business, which had sales of £80 million last year and accounted for 80 per cent of turnover.
Jones yesterday announced it had returned to the black, reporting pre-tax profits of £2.19 million, compared to a loss of £1 million in 1996.
Earnings per share rose to 14.7p compared with a loss of 8.6p per share last year. The company said it would not be paying a dividend for 1997 as it intended ``to return surplus capital to shareholders in 1998 by way of a capital distribution following the disposal of the shipping and manufacturing divisions''.
The company declined to say exactly how much it planned to give back to shareholders, but reliable sources indicated it should be more than £20 million.
Jones has completed the sale of two ships, the Rathrowan and Rathboyne, since the end of the financial year and has contracted to sell the final ship, the Rathcarra, in the second quarter of this year.
Jones is to continue to dispose of its manufacturing interests, which reported modest profits last year. Earlier this week it sold the loss-making Mid-West Circuits to Jim O'Mahony, the former managing director of Golden Vale.
Jones also plans to sell its two radiators businesses, Runtalrad in Ireland and Thermal in the UK, as well as Tube Rollers in Callan, Co. Kilkenny.
Chief executive Pat Nevin, who took over at the helm in 1995, said: ``I think we still have a significant business in distribution.
``We have been growing and there is no reason why we should not continue to do so.''
Jones said operating profit rose to £1.98 million compared with a loss of £2.88 million last year due to a strong performance in the distribution division and a marginal return to profits in manufacturing.