On a lowish tax charge, earnings per share should reach 5.35p with a 1.5p dividend against comparable figures of 3.02p and 1.11p for 1996. At 48p that puts the shares on a prospective p/e ratio of just nine times and a yield of 4.2 per cent. Net assets are 28.lp a share.Wootliffe felt the shares were so cheap that, prior to the latest acquisitions, Caldwell bought back 270,000 shares in the market at between 30p and 31p. In the process it has graduated from the OTC market to a full listing in March 1995. Surprisingly for such a small company the main business activities, which all came in by acquisition, are in Germany, via a subsidiary Nissel Textilien Principally it imports simple white underwear for men. Caldwell sources its product in vast quantities from factories in Romania and Egypt contributing to the phenomenon of Germans earning twice as much as we do for the same job, but paying less for their underwear, according to Stanley Wootliffe.For most of the last 10 years Caldwell has been quietly building the business. The plan now is to adopt a higher profile with the appointment of a City public relations firm and the search for a stockbroker.

Part of the story which the group has to tell is that it has just made an acquisition, on apparently very attractive terms. The business, Lawtex Nursery Products, promises to transform Caldwell's hitherto tiny UK operations. The firm is being acquired for pounds 100,000 in cash plus pounds 450,000 of debt repayable over the next three years. It supplies a range of products including childrenswear, nursery products, parasols and a proprietary product, the "Lawtex clamp" which attaches umbrellas to prams and sells in substantial numbers (pounds lm plus a year) through Mothercare. Lawtex sales have grown from pounds lm to pounds 4m over the last four years with profits running at some seven per cent of sales.The addition of Lawtex and another cheaply bought business, Roumi Textilhandels - which should add pounds 1m of sales to its German operations - puts Caldwell on course for 1996 sales of pounds 15m and pre-tax profits of pounds 750,000.