Heiton Group bets on Paddy Power

Heiton Group confirmed yesterday that it had acquired Waterford-based plumbing and heating specialist Paddy Power and Company.

The purchase price was not disclosed but analysts believe it ranged between €3 million and €5 million. Paddy Power, a family owned firm, had a turnover of some €8 million last year and its net assets at the end of 2003 are estimated at about €1 million.

The most recent accounts available for the firm show that it posted a pre-tax profit of almost €400,000 in 2002.

Heiton said the acquisition, which is expected to be earnings-enhancing from the start, would be funded from internal resources.

Goodbody analyst Mr Robert Eason has estimated that the purchase could add 0.5 cents to Heiton's full-year earnings.

Heiton chief executive Mr Leo Martin said the firm would continue to seek suitable acquisitions in the future.

Mr Eason is expecting a second bolt-on acquisition to emerge within two months.

The property associated with Paddy Power will be retained by the company's former owners, who will continue to run the business in the medium term.

It will be rebranded as Heiton Trade and should fill a coverage gap for the merchanting chain, which now has 38 outlets around the Republic.

Paddy Power, which is located at Kilbarry near Waterford city, is the largest plumbing, heating and drainage merchant in the south-east.

Shares in Heiton fell five cents to €4.65 in a generally weaker market yesterday.