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Smallbone

  • BY: Andrew Hore |
  • POSTED: 02/09/2008 |

Fitted kitchens supplier Smallbone is buying a US-based luxury kitchen retailer for up to $15m (£8.3m).

The purchase of Christopher Peacock Cabinetry gives Smallbone critical mass in the US. CPC has two showrooms (in Greenwich and Chicago) and is opening a third in San Francisco. There are also two dealerships in Boston and Los Angeles. It also has a workshop in West Virginia which will be used to satisfy all of the group’s US demand.

The initial payment is $8m in cash and $4.5m of shares at 111p each. The rest is dependent on performance.

CPC had revenues of $14.6 million (£7.8m) and pre-tax profits of $835,000 (£450,000) in 2007 and is expected to do better this year. The acquisition should be earnings enhancing in the first year.

Smallbone also revealed that revenues increased 15% to £30.4m in the six months to June 2008. The Mark Wilkinson Furniture brand grew faster than the core Smallbone brand. Pre-tax profits trebled to £620,000.

Net debt was £6.6m prior to the latest acquisition. Smallbone is paying an unchanged dividend of 0.6p a share.

The order book is 8% higher at £34m but management is still cautious about the future. The contracts are tending to have longer lead times.

At 81p a share, Smallbone is valued at £18.4m. 

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