Menvier falls short of forecasts: Chairman confident of stronger performance in second half

MENVIER SWAIN, the USM-quoted manufacturer of emergency lighting, fire alarms and security systems, announced interim pre-tax profits of pounds 4.1m, up 28 per cent.

The results did not live up to expectations. The share price closed down 30p at 250p, even though Roy McDowell, group chairman, said he was confident that full-year profits and earnings per share would be ahead of last year.

The group reckons its UK businesses, accounting for about 50 per cent of turnover, will perform well in the second half. Both sales volumes and margins are likely to improve, helped by the fact that fire prevention officers are steadily catching up on their backlog of inspections due on existing, rather than new, buildings.

Recession still clouds the Continental markets. France is the most important of these following the acquisition 12 months ago of Nugelec, a maker of the fire detection equipment. This subsidiary performed well in the first half, but profits at Menvier Swain's French emergency lighting business were dimmed by a price war launched by its main competitor. Its German businesses were pounds 200,000 in the red.

Ian Jermin, an analyst with Credit Lyonnais Laing, said: 'I would expect some recovery in the second half, and the outlook is quite buoyant further ahead.'

Menvier Swain made five acquisitions last year, taking it to number one in the European emergency lighting market, with a share of about 15 per cent. EU safety directives being implemented will reinforce long-term demand for its products, especially in southern European countries that are still relaxed about safety standards.

The group is also exploring prospects in the Asia-Pacific region. It has a small Australian business but could build plants in rapidly growing markets such as Indonesia.