DAVID HELLIER

Watson & Philip, the fast-growing convenience stores group, yesterday announced a 74% rise in pre-tax profits and said that in 1996 it intended to add around 100 stores to its Alldays convenience stores network.

The profits growth resulted from increased margins; turnover rose 13% to pounds 497.8m and the dividend is lifted 8% to 16.5p from 15.3p.

Chairman James Watson said the results confirmed that the trading format was performing well in the current environment. "We see many opportunities to continue to grow organically through market share gains, particularly in the area of multi-temperature supplies. Overall, current trends give us confidence that we will deliver continued strong performance."

The group said the higher operating profit at Alldays - up 52% - reflected an increase in operating margins from 3.9% to 5% as a result of an improving sales mix, the impact of the Lottery and volume-related efficiences. The network grew by 102 stores in the financial year to more than 450 stores nationally. This figure included 47 company-owned branches and 77 franchised stores; 22 branches were sold or closed.

The balance sheet shows the effects of a revised accounting treatment and includes a capital liability of pounds 7.4m which increases balance sheet gearing.

Operating profit decreased by 17% to pounds 1.6m in Trademarket, one of the company's cash and carry subsidiaries.

The shares rose 9p to 574p.