INISHTECH, the paper and packaging group being taken over by James Crean, has increased its pre-tax profit by 18.8 per cents from £7,377,000 in 1994 to £8,765,000 in 1995.

The group had to contend with exceptional costs of £214,000 incurred during the lengthy talks with Crean and had a share of £103,000 in losses from associates. Against this, acquisitions boosted profits by £942,000.

Operating profits of the continuing operations grew by 12.2 per cent. And, if the adverse currency translation of £350,000 is taken into account, the underlying growth amounts to a creditable 16.2 per cent.

Inishtech is now a very focused group with a strong balance sheet and has further significant development potential, said its chairman, Mr Tom Toner. Noting that Crean intends to sell off Inishtech to a third party, he expressed confidence that Inishtech would continue to progress for the benefit of its new owners, customers, management and employees.

Crean had a 71 per cent stake in lnishtech but bought shares in the market at 550p to bring the stake up to 93 per cent. It has now made an offer to acquire the outstanding shareholding at the same price. It will have to receive acceptances from 80 per cent of the outstanding shareholding to enable it to compulsorily acquire the holdings of those who do not accept the bid.

Inishtech, in a circular which will be received by its shareholders this morning, recommends acceptance of the offer. The recommendation is being made for two reasons:

(a) the price represents a 34.8 per cent premium on the pre-offer price;

(b) Crean now effectively controls the company.

Mr Toner also noted assurances have been given to all employees and management that their employment rights, including pension rights, would be "fully safeguarded".

The latest Inishtech results show a 20.5 per cent rise in sales from £68.2 million to £82.2 million. Most of the growth came from the core operations but acquisitions contributed £4.2 million.

Earnings per share went up from 38.1p to 45.3p. In line with the conditions of the offer from Crean, no final dividend is being paid.

While net debt increased from £6.4 million to £7.7 million, the gearing is still a low 13.1 per cent. The net assets per share went up from 326p to 357p.

Reviewing the latest results, Mr Toner said Colchester-based Droyhurst had "another outstanding year achieving sales growth of 36 per cent".

Bell & Bain, the Glasgow-based specialist printer of technical journals and books, had sales growth of 14 per cent.

Cartoncraft, the Dublin-based printed carton company had a 26 per cent increase in sales.

The group's Leeds-based distribution business, Douthwaite, had another disappointing year with a 10 per cent fall in sales.

The two US acquisitions, of Meridian Printing and Elite Color Group, made in January, have "performed satisfactorily".