Upbeat TenCate looks to fuel growth with M&A

* H1 op pft up 83 percent to 38.2 million euros

* To expand 150 mln euro war chest, expects no share issue

* Sees considerable rise in H2 net profit

* Sees debt/EBITDA ratio falling towards 2.0 by end-year

* Shares up 8.1 pct

AMSTERDAM, Aug 26 (BestGrowthStock) – Dutch specialty textiles and
materials firm Ten Cate NV (NTCN.AS: ) signalled a return to
acquisitions and said on Thursday it would increase its war
chest as it forecast sharply higher second-half earnings.

Shares in TenCate, which makes protective fabrics and armour
for the U.S. military and synthetic grass for sports pitches,
were up 8.1 percent at 20.50 euros at 1059 GMT, the
second-biggest gainers in a positive Amsterdam market.

“It is certainly a sign of confidence,” ING analyst Jan Hein
de Vroe said of TenCate’s acquisitions plans, but he added the
company should also consider divestments and he would closely
watch acquisition prices.

Ten Cate, which has been an active acquirer in the past
decade but made only a few small acquisitions this year, said
the recovery in its results meant it is financially well placed
to give greater priority to its “buy & build” strategy.

“Growth is expected to continue, both organically and
through acquisitions,” the company said in a statement. Group
spokesman Frank Spaan said the company has a shortlist of
targets and is talking to several companies.

Ten Cate, which issued shares in 2007 to buy the synthetic
grass operations of Dubai-based Mattex for $178 million, plans
to add to its 150 million euro ($190.5 million) war chest, but
does not currently expect to issue shares.

It added it sees Brazil and Asia as major growth markets
with room for growth in water management and protective fabrics
for industrial, oil and gas workers and firefighters.

Ten Cate’s first-half operating profit rose 83 percent to
38.2 million euros as margins at its Geosynthetics and Grass
sector rose to 8.3 percent from 2.3 percent on cost savings.
Sales rose 5 percent rise to 454.6 million euros.

The company’s debt-to-EBITDA (earnings before interest, tax,
depreciation and amortisation) ratio was already 2.7 at the end
of June, just under the 3.0 agreed with crediting banks.

Spaan said the ratio was hurt by the higher U.S. dollar and
the company expects it to fall to 2 or below by the end of the
year as operating profit improves.
(Reporting by Anna Ferschtman and Aaron Gray-Block; Editing by
David Holmes)
($1=.7874 Euro)

Upbeat TenCate looks to fuel growth with M&A