Bowthorpe launches pounds 64.4m rights issue: Pledge to increase total dividend by 8.6%

BOWTHORPE, maker of electrical components for the telecommunications, construction, automotive and defence industries, is raising pounds 64.4m in a one-for-eight rights issue.

It forecast that profits for the financial year ending this month would be pounds 50.5m, a rise of nearly a fifth on figures for 1992. Bowthorpe also promised to increase the total dividend by 8.6 per cent to 6.9p.

Shares in the company rose in early morning trading but settled later in the day to close down 9p at 373p. The rights issue price is 320p.

The new money will clear debts of pounds 46m, and despite spending dollars 17m ( pounds 11m) on another acquisition Bowthorpe expects to have net cash of pounds 18m at the end of the year.

The latest purchase is of Kaye Instruments, a US component supplier to data managers. The company added: 'The rights issue will enable Bowthorpe to strengthen its balance sheet and provide flexibility to pursue acquisition opportunities as they arise.'

Analysts have been predicting profits and earnings growth of 12 per cent next year. Colin McCarthy, finance director, said: 'There will be a lower rate of earnings growth next year because of the rights, but long-term it will come back.'

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