Turnaround firm makes a packet in sale to rival

PRIVATE equity firm Endless has made a nine-fold return on packaging business Excelsior.

Paper and packaging firm Mondi yesterday paid £33m for Excelsior, which is behind a type of pouch for steam cooking in the microwave.

Excelsior, which has plants in Wales and Lancashire, was bought by investment firm Endless in December 2014.

The private equity outfit invested £2.5m in the struggling business along with Growth Capital Partners. It installed a chief executive and set about helping the firm to expand across Europe and the US.

Now, just over two years later, the investment group, which counts former England footballer Danny Mills among its clients, has made a significant return after turning around the business. Excelsior generated revenue of £39m in 2016.

Mondi said the purchase would help it develop its consumer packaging business.

It is not the first success story from Endless. It also snapped up the West Cornwall Pasty Co in April 2014.

After refocusing the firm’s outlets in high footfall locations, such as train stations, it offloaded the business just four weeks ago at more than five times the price it originally paid.

Mondi shares edged up 0.1pc, or 2p, to 1768p.

The FTSE 100 fell 0.2pc, or 16.15 points, to 7172.15.

Randgold Resources was the highest riser after gold production hit a record of 1.25m ounces in 2016. The firm saw profits climb 38pc to £236.5m in the year and increased its dividend by 52pc to 80p a share.

Randgold said its mines should be profitable as long as the gold price is at least $1,000 an ounce – currently it is around $1,227.

Russ Mould, investment director at AJ Bell, said: ‘The group had the perfect mix of higher gold prices, record output and lower costs in 2016.’ Yesterday shares soared 4.1pc, or 285p, to 7145p.

Interserve was up a nudge after it won a five-year contract with Network Rail worth £65m.

The support services firm will provide facilities including waste management, pest control and washroom services across 11 stations in London, Reading and Bristol – including eight of the UK’s ten busiest stations.

Shares yesterday rose 0.2pc, or 0.5p, to 328.5p.

Hostel operator Safestay slipped as Canaccord cut its ‘buy’ rating on the stock.

Safestay said earnings for 2016 were £2.2m, up from £600,000 the year before, while revenues had climbed from £4m to £7.4m.

But while numbers rose significantly from last year they were below market expectations.

Safestay said it had been a difficult year as visitor numbers to London (the firm operates hostels in Elephant and Castle and Holland Park) were affected by terror attacks in Europe and wider political instability.

But it said its outlook for 2017 was unchanged and advance bookings were stronger than a year ago. Cautious on the stock, Canaccord cut its target price from 65p to 42p. Safestay shares lost 5.6pc, or 2.5p, to 42.5p yesterday.

Velocys, the synthetic fuels firm in which Roman Abramovich, Chelsea FC’s Russian billionaire owner, holds a 29.5pc stake, soared after positive production results.

The gas-to-liquids firm has successfully started to produce fuels in a more environmentally friendly way at its plant in Oklahoma.

The process involves putting alternative fuels such as animal feeds in its Fischer-Tropsch chemical process, which turns them into diesel fuels and waxes.

Energy giants such as Shell already have the capabilities to do this, but it is a victory for smaller providers and marks a major milestone for Velocys after around ten years of research, development and testing to get to this point.

Abramovich is the largest shareholder in the business, which reported revenue of £400,000 in the half year to June 30.

Shares surged 17.9pc, or 13p, to 85.5p.