Two acquisitions and rights issue for Hollas

THE NEW management team at Hollas, the textiles importer, has marked out its strategy with the acquisition of two clothing manufacturers. Hollas also announced a five-for-four rights issue to raise pounds 17.3m after expenses.

The acquisitions will double group turnover to more than pounds 57m. Hollas is paying pounds 5m for Textilion, a maker of women's clothes and knitwear for customers such as Laura Ashley and Harrods, and up to pounds 4.5m for Hunter, which makes Macbean foul weather protective clothing.

Julian Lee, chief executive of Hollas since October, led the management buyout of Bricom, the non-financial businesses of British and Commonwealth.

Hollas, his latest vehicle, imports and distributes clothing. With Textilion, it has added its own manufacturing facility.

Mr Lee plans to use Macbean to tap the growing market for protective clothing. It sells heavy-duty work gear to organisations such as British Rail, police forces, fire brigades and the AA.

Macbean will begin to market on the Continent, where European Union legislation is harmonising health and safety standards upwards. It has one deal with the Belgian post office, and the Swiss and German police are testing Macbean products.

Mr Lee said UK requirements for safety clothing are also being upgraded, while privatisation of local authority activities presents extra opportunities as the workforces tend to get smart new uniforms.

Hollas forecast a final dividend of 0.3p for the enlarged share capital, making 0.6p for the year. Earlier this month it announced an interim loss before tax of pounds 254,000, due to restructuring costs of pounds 705,000.

Shareholders will be asked to approve the plans at an extraordinary meeting on 25 March. The shares closed 1p down at 31p.