Management kept its eye firmly on costs. This cost consciousness has raised average margins to 11.7%, though the aim is to be industry leader in all sectors. The strategy has paid off handsomely: its 1990 results showed a mere 2% fall in pre-tax profits to £7.5 million, with turnover down 6% to £794 million.
As the lowest-cost producer, Delta expects further organic growth. But, ever cautious, Easton now believes that the time is ripe for acquisitions, with Europe and the United States equal priorities. He talks of a "brick in the wall" approach, buying a business to facilitate organic growth, then another, and so on. "We think the buying window will stay open longer than people think. But it's a matter of winkling out the right project. We believe it is time to gear up while others are worrying about their balance sheets." Delta's gearing is currently 14%, with interest cover of 18 times. Easton says that in the longer term he would be "quite comfortable with gearing of 50 or 60% if a scheme warrants it".
He has hooked a sizeable catch or two. Fundamental for the development of the plumbing fittings side was the £18 million acquisition of Nibco (Europe) in 1987. Already UK market leader for some 20 years with its Conex brand, and a significant exporter, Delta had had its eyes on Europe for some time. Eddie Garvey, managing director of the engineering division, says: "As a result of the acquisition we are now European market leaders and our biggest operation is European based."
Nibco required some work, however. It had been making losses for its US parent. Garvey took charge for a year, to knit the management together. As well as routine strengthening of financial controls, that meant low-cost production. A rationalisation programme begun under the Americans was completed last year. (The £4 million acquisition of French copper tube fittings manufacturer Atub last year has allowed further cost reduction.)
Marketing, too, required wholesale change. Elsewhere in flow controls, small infill acquisitions have stressed added value, which means better margins. For example, two small high-pressure valve manufacturers were combined with Delta's more mundane Wade Couplings to create KWB Controls. KWB supplies stainless steel products made to aerospace specifications for the oil, gas, power generation and other processing industries, where environments demand high safety standards. A Canadian acquisition is complementing Delta's German operation in firefighting equipment.
The trend towards improved safety will bring growth in other areas too. In the circuit protection division the new generation of circuit breakers which is gradually replacing the old fused products is demanding new technology. Delta makes the two leading brands in medium voltage circuit protection, MEM and BILL Switchgear. For some years it has wanted to replicate this presence in the domestic market, where its MEM brand is number two to Scholes' Wylex. In 1987 Delta attempted to buy Scholes, which manufactures miniature circuit breakers under licence from ABB. When the £71 million bid failed, Delta went ahead with its own mini circuit breaker (mcb).
David Crook, managing director of the circuit protection division, explains the attractions: "The old fused technology was British but the new technology for the mini circuit breaker was all in the hands of the continentals. Most British manufacturers make them under licence. We wanted the freedom to operate so we designed our own mcb up to the latest specification."
Meanwhile the £3 million acquisition of Home Automation in security products and electronic lighting controls last year has given Delta market leadership in dimmer switches and provides opportunities for new products.