Whessoe sells engineering arm as profits tumble
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Your support makes all the difference.SHARES in Whessoe, the UK industrial group, plunged 35p to 184p after a fall in profits and few signs of an improvement in trading.
It also emerged that the company faces a pounds 2m writ from a contractor that claims not to have been paid for work done. Whessoe rejected the claim and said there was little chance of the action succeeding.
Whessoe yesterday announced the sale of its troubled project engineering division for pounds 1.4m to the German company Noell, which will also take on pounds 6.2m of debt.
But this news was overshadowed by a fall in taxable profits in the six months to 31 March, from pounds 4m to pounds 1.8m. Operating profits, before a pounds 1m exceptional charge for redundancies, were pounds 3.6m, slightly lower than last time. George Duncan, chairman, said: 'Although the group has reported a slight decrease in operating profits the performance of the instrumentation companies has been good relative to market conditions. The group overall, however, is unlikely to show further improvement in the short term.'
Earnings fell from 11.6p to 4.4p, but the interim dividend was held at 2.3p.
The results include a first contribution from Autronica, a Norwegian instrumentation company bought last year. Whessoe said the operation had a good first half, as did the liquid measurement division. But piping systems was hit by weak home markets, and job cuts were made. Mr Duncan said: 'While a number of large international prospects presently being pursued by the division should provide work for 1995 and beyond, the results for the second half of the current year are unlikely to show any improvement.'
Simpkin Partnership, a firm of quantity surveyors, has issued a writ claiming payment for work done for the projects division. Whessoe said Noell was aware of the writ before it bought the operation.
Should the legal action succeed Noell and Whessoe would share the costs, but that was extremely unlikely, a spokesman said.
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