CI shares fall as profit and dividend tumble

SHARES in CI, the steel and engineering products group, fell 4p to 24p as the company announced profits below market expectations and warned that industrial activity in France and Germany was much lower.

After three years of a maintained dividend the final payout was slashed, resulting in a full-year total of 1p, less than half last year's figure and just covered by earnings per share of 1.04p.

Patrick McTigue, chairman, said: 'During the year there was a further deterioration for almost all our subsidiaries. A small improvement following the general election was subsequently reversed.' CI is exposed to the building and motor industries.

Turnover from continuing businesses fell for the second year running from pounds 69.4m to pounds 64.7m. There was a decline in orders and margins, with pre-tax profits tumbling from pounds 3.3m to pounds 1.5m.

In anticipation of that decline the workforce had been cut by 19 per cent, half of which came out of continuing businesses. At CI's steel rolling mill in France, staff numbers were reduced by a third, resulting in an exceptional charge of pounds 1m. A further pounds 1.3m extraordinary charge was taken to cover the closure of a loss-making, raised-access flooring company.

Much of the output from the French mill is dependent on the health of the German car industry, where output is expected to fall by more than 20 per cent this year. Losses at the plant are understood to have reached pounds 750,000 last year although it is now back to break even.