Bridon braced for more cuts: Review of products may lead to further restructuring
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Your support makes all the difference.FURTHER shake-ups could be on the way at Bridon, the Doncaster-based wire and fibre rope maker, following a detailed review of its product range that is due to be completed in May.
Sharply lower restructuring costs last year helped the company to improve from losses of pounds 4.9m to a pre-tax profit of pounds 1.2m and hold its dividend. Bridon shares rose 4p to 98p on the news.
Earnings of 1.9p fell well short of covering the 4p dividend, including an unchanged final of 2.75p, but a mildly positive cash flow during the year kept the balance sheet on an even keel.
Debt fell slightly from 22.8 per cent to 21.1 per cent of shareholders' funds, which rose by pounds 2.8m - despite a retained loss of pounds 1.2m - as the value of Bridon's overseas assets were boosted by sterling's fall.
Brian Clayton, chief executive, said that further restructuring could result from the re- examination of the company's core products that was currently underway.
The group planned to boost its distribution activities in general purpose wire, where competition from Asian and Russian plants had increased, and concentrate on manufacturing more high-technology products.
Bridon has shed 966 jobs or nearly 20 per cent of its workforce in the past two years. Mr Clayton said he was not yet prepared to put a figure on further restructuring costs, but Bridon was confident it could finance them - possibly in an 'innovative' way.
He added that forward order books had improved in the early months of this year, and that Bridon had just won a pounds 6m contract to provide high-technology mooring ropes for the Trol project in the Norwegian sector of the North Sea.
Mr Clayton said that markets remained generally difficult, however, and that sales in mainland Europe had deteriorated.
Operating profit before restructuring costs rose from pounds 4.9m to pounds 6.4m on sales that were pounds 3.3m lower at pounds 316m, as fibre products and industrial textiles moved back into the black and margins improved in wire and wire ropes. Restructuring costs were markedly lower at pounds 1.1m compared with pounds 4m.
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