Eurotherm is investing pounds 10m on development of a new temperature control device which it hopes to bring to market later in 1995.Business in North America, already the company’s biggest market, will get a shot in the arm from the March acquisition of Systems Automation and Services on a multiple of just four. SAS made pounds 1.5m last year, adding pounds 200,000 for the month it was included in Eurotherm’s figures.Full year figures from Eurotherm should see profits rise from pounds 26.1m to around pounds 34m, putting the shares up 12p to 447p yesterday on a forward multiple of around 18 Hold.. But such is Eurotherm’s operational gearing, that the increase in sales had the effect of catapulting half- year profits 31 per cent ahead to pounds 15.8m.
With earnings per share lifted 32 per cent to 11.7p, Mr Hultman has more than delivered on his promise to deliver organic growth, and he sees plenty more to come.He says that approximately half the sales increase in the six months was organically driven, as process industries around the world replace recession-worn plant, a trend which should be boosted as companies seek to drive output higher.But new products should also drive sales this year. The 6 per cent expansion last year has accelerated to 11 per cent in the first half of this, raising turnover to pounds 91m in the six months to April.

Those moves held back turnover growth while the group was knocked into shape, but sales have now started to take off. Led by Claes Hultman, the Swedish chief executive now also chairing the board at Wembley, the group has dumped businesses generating around pounds 25m of annual sales over the last three years as it got out of peripheral and unprofitable areas. Eurotherm, the Sussex-based maker of meters and recording devices for industry, has followed a text book path back onto the growth track after losing its way in the early 1990s. The US-based company, controlled by entrepreneur Jim Cotter, is one of America’s largest privately controlled cinema exhibitors, and has recently launched a worldwide search, advised by merchant bank CS- First Boston, to expand overseas.The MGM auction, which is being handled by SG Warburg, is scheduled to be completed by 30 June.. It is also willing to see Rank help to finance the deal, which is likely to be highly leveraged and linked to MGM’s cash flow performance over the coming years.But Virgin is thought to be against seeing Rank take a leading role in the consortium, partly because of fears of Monopolies Commission intervention and partly in light of its long-stated opposition to concentration of ownership of cinemas.Reading Corp, which is making its first foray into the UK market, may be open to a collaboration with Rank, one of Britain’s oldest cinema exhibition companies.

Having withdrawn its own offer, the British company – already owner of the largest chain of cinemas in the UK – is prepared to take a minority stake in the MGM houses, according to sources close to the sales talks.Virgin is believed to be attracted by Rank’s expertise in electronic point-of-sale technology for ticketing. Rank bid in excess of pounds 200m but withdrew because of concerns that a deal would face scrutiny by the Monopolies and Mergers Commission.Reading Corp, which is in exclusive talks likely to lead to a purchase of the cinemas by the end of the month, was approached by Rank last week. Virgin, which is bidding with lead investor Reading Corporation of the US, is believed to be prepared to accept Rank as a joint minority shareholder provided there are no special distribution arrangements between Rank and the cinema chain, and as long as Virgin’s stake is not substantially diluted.
MGM’s 120 cinemas in the UK were put up for sale by owner Credit Lyonnais last year, and attracted several bids at the pounds 200m level. Virgin Group, a minority partner in the consortium tipped to win the MGM cinema chain, would welcome the involvement of Rank Organisation in its bid, with certain conditions. The results were weighed down by trading losses of pounds 1.77m at El Paso and a pounds 2.79m deficit on disposal.The final dividend takes the total for the year to 0.3p.Ray Horrocks,chairman, said the group had a strong base with its electronics businesses to develop the company this year.. In March the company sold a loss-making power supplies business, Chloride El Paso, which pushed the group into the red last year.
Chloride yesterday announced pre-tax losses of pounds 318,000 for the year to March, compared with restated profits of pounds 1.21m the previous year.