Adwest up despite gloom

SHARES in Adwest Group, the car components and property group, rose by 7p to 120p yesterday despite its warning that it continues to see little evidence of any improvement in the economy, writes Jason Nisse.

Reporting a 6 per cent rise in full-year pre-tax profits to pounds 7.5m, Fred Grant, chairman, said: 'There is little real sign of an end to this deep-seated recession.' He said what success Adwest had achieved was largely of its own making.

A turnaround of the group's power systems division helped it to increase operating profits by 12 per cent to pounds 10.1m on sales 4 per cent ahead at pounds 127m. Earnings per share rose 5 per cent to 8.6p.

The pre-tax result was struck after pounds 577,000 of exceptional reorganisation costs. Mr Grant said: 'We believe we have gone as far as we can with cost-cutting measures, without doing lasting damage.'

However, Adwest believes there is still scope to improve return on sales and intends to concentrate on restoring operating margins to a more acceptable level.

The company has reduced its debt to net assets ratio from 38 per cent to 29 per cent.

Adwest is paying an unchanged final dividend of 5.75p a share to maintain the total at 7p.