Transtec tumbles on profit warning
Tuesday 22 September 1998
The profits warning sent Transtec shares tumbling almost 20 per cent to a three-year-low of 51.5p as analysts cut forecasts for 1998 earnings.
Richard Carr, the chief executive, said the Birmingham-based engineer was looking at redundancies among its 4,000-strong workforce. He said the number of job losses "would depend entirely" on demand for the company's products over the next three months.
The chief executive said the cuts would probably be spread over several plants. He ruled out factory closures. Transtec's plants around the country include factories in Manchester and Telford. Mr Carr said Transtec had laid off 50 people in the past two months.
His comments came as the company said it would hit difficult trading conditions in its car and computer components divisions. Mr Carr said demand for automotive parts was at its lowest for three years as the market had been hit by a cyclical downturn and global economic turmoil. Demand for components for computer monitors and appliances such as washing machines was set to suffer from lower consumer spending, the company said.
Analysts cut forecasts for 1998 pre-tax profits by around 15 per cent to pounds 26m to pounds 22m. The warning overshadowed a 34 per cent rise in interim pre-tax profits to pounds 10.2m on sales up 29 per cent to pounds 209.4m.
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