Riva Group Plc of Bolton, Lancashire which came to the Unlisted Securities Market in October 1988 (CI No 1,037) looking to raise its profile and make acquisitions, has seen a healthy rise in pre-tax profits up 22% to UKP1.5m on turnover that rose a spectacular 49% to just under UKP14m. Furthermore, these results include those […]
Riva Group Plc of Bolton, Lancashire which came to the Unlisted Securities Market in October 1988 (CI No 1,037) looking to raise its profile and make acquisitions, has seen a healthy rise in pre-tax profits up 22% to UKP1.5m on turnover that rose a spectacular 49% to just under UKP14m. Furthermore, these results include those of Infocare, acquired in January (CI No 1,097), which means that the group total has had to absorb a loss of UKP39,000 while Infocare donated only around UKP400,000 to turnover. Infocare was acquired from Eurotherm Plc for UKP450,000 and develops and markets dispense control electronic point-of-sale systems for use by licensed victuallers. Infocare’s range, which controls the dispensing of alcohol, is presently being made compatible with Riva’s own point-of-sale systems. The more interesting acquisition was that of Hugin Sweda, purchased in September for UKP3m (CI No 1,263), which has not yet had an impact on Group figures. Riva has had its eye on Hugin for some time indeed Riva’s flotation might well have been motivated by its pursuit of this last acquisition. Having been rebuffed a couple of times by Hugin, Riva finally got its chance when the company put itself up for sale on the understanding that it would sell its loss-making US operation. Despite the fact that the problems of the combined companies that make up Hugin Sweda stem from somewhat outdated electronic till technology, Riva badly wants the continental outlets that the acquisition opens up. For the UK market is now widely considered to have reached saturation, making expansion overseas a must for UK point of sale manufacturers. Nevertheless, Hugin Sweda needs a good deal of reshaping to make it a going concern for Riva. To begin with, Hugin Sweda’s offices in Stockholm and London have been closed and their activities relocated to Bolton. Meanwhile Riva is undertaking extensive market research into the continental markets and is developing a new product range to bring Hugin Sweda’s customer base into line with Riva’s product capabilities. In a year’s time, Riva reckons that Hugin Sweda will be contributing UKP80m to group turnover and will be profitable during the first half of 1990. Should this prove to be the case then Riva will have got a bargain acquisition indeed – but the group’s short-term progress is going to be a little difficult to follow, because it is changing its financial year end from June to December to bring it in line with the bigger Hugin Sweda.