Profit continues to rise at Saia-Burgess
Saia-Burgess, the electrical components company that is the subject of a hostile takeover bid, has reported increased sales and net profit for the first half of 2005.
The firm said that net profit for the first six months was SFr17.8 million ($13.93 million) up by 11.3 per cent over the comparable period last year. Sales rose by 13.8 per cent to SFr314.6 million.
Saia, which has rejected a bid from Japan’s Sumida Corporation, said all divisions had contributed to growth.
The "marked" increase in sales was mainly attributable to the successful integration of two acquisitions made the previous year, it said in a statement on Tuesday.
Earnings before interest, tax and amortisation (EBITA) rose 4.1 per cent to SFr24.9 million.
The firm, which is based in Murten, canton Fribourg, has benefited from rising demand for its niche products, as the use of electrical devices such as climate control and door locks becomes more widespread.
Saia said it was "confident" of reaching its full-year target of increasing sales by around ten per cent and improving profitability.
It added that it expected business to pick up in the second half of the year.
On Friday Saia went on the offensive against overtures from Sumida, which has offered to pay SFr950 per share to acquire the company.
In full-page advertisements in several Swiss newspapers, Saia rejected the offer, criticising Sumida’s intentions as "obscure, hardly credible and against all economic logic".
And it said there were no synergies between the two in terms of markets, products or development.
The advert repeated the company’s view that the offer did not reflect its true value.
It argued that since Sumida was going to third parties to finance any deal, debt would weigh on the group to such an extent that Saia’s profits would have to finance this, rather than being used for its growth strategy.
And it pointed out that Sumida’s sales in 2004 were SFr420 million, while Saia’s were higher at around SFr570 million.
Saia’s CEO Daniel Hirschi told Reuters in an interview on Friday just how upset he was by the Japanese offer.
"I don’t see a single thing that deserves the word strategy in everything I’ve heard so far," he said.
Sumida boss Shigeyuki Yawata has said the two firms offer short-term synergy potential in the consumer goods area and long-term potential in the car parts division.
In Tuesday’s statement, Saia’s board of directors said it clearly rejected the "unwelcome and unsolicited" bid and remain convinced that Sumida did not represent an attractive alternative for any of the target groups concerned – shareholders, employees and clients.
Sumida’s bid has not yet been officially published because of clarifications being sought by the Swiss Takeover Board in Zurich.
swissinfo with agencies
Sumida’s bid to buy Saia-Burgess at SFr950 per share values the firm at about SFr580 million.
Saia stock has gained more than 40 per cent this year, partly due to Sumida’s overtures.
The company has said it expects acquisition-driven sales growth of SFr40 million this year, along with internal growth and improved profitability.
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