Investment concern CEPS hopes to clinch a new acquisition after annual profits slipped 53 per cent to �53,000 pre-tax.

AIM-quoted CEPS, formerly Dinkie Heel, increased turnover by �1.5 million to �6.9 million in 2005. This growth was helped by the acquisition of Friedman's, which makes swimwear from imported lycra for Marks & Spencer and other retailers, and achieved a �235,000 operating profit before �74,000 goodwill amortisation.

The old Dinkie Heel businesses, making replacement heels and soles for shoe repairers, body armour for extreme sports and rubber matting for stables and milking parlours, had a mixed year. But they have put in improved performances so far this year.

Chairman Richard Organ says directors expect 'better results from the existing companies' this year and to 'be able to expand the group through the acquisition of another high quality business'. Observers believe the new acquisition will be cash generative and in a new sector.