Accounting errors knock Haden profit
Tuesday 16 February 1999
Shares in the company plummeted 12p to a five-year low of 39.5p after it revealed that exceptional costs of around pounds 6m at its paints subsidiary would wipe out profits in the second half of 1998. As a result,1998 figures would be "substantially below" market forecast, the company said.
The surprise warning, which follows a bearish trading statement issued in November, prompted analysts to slash their pre-tax profit forecasts from around pounds 12m to around pounds 7m.
The company announced that Jeremy Beeton, the director who was responsible for the paints unit, had left the group.
The chief executive, Richard Taylor, said the collapse in profits had been caused by an accounting blunder at Birmingham-based Haden Drysis International.
The unit, which supplies painting equipment to car manufacturers, had misjudged the costs of two major contracts, worth a total of around pounds 70m, with two leading car makers. It also wrongly assumed that part of the costs could be recouped from the clients and recorded them as recoverable income, Mr Taylor said.
He said the mistakes were "a serious error of judgement" and that a number of staff within Haden Drysis had not complied with the company's internal control procedures. "Some people were skirting around the procedures. This is totally unacceptable."
Mr Taylor said that the company had tightened its controls and hired more staff to check the accounting of its subsidiaries. He added that an internal investigation throughout the group had found no other episodes of mistaken accounting.
The chief executive said that he would take direct responsibility for the running of the Process Engineering division, which includes the troubled paints subsidiary.
Mr Beeton would not be the last person to leave the group as a result of the affair, Mr Taylor added.
- 1 Replica Back to the Future Hoverboard released
- 2 Katie Hopkins attacked me on Twitter — so I reported her to the police for inciting racial hatred
- 3 Brixton squat flats now costing up to £3k per month show how out of control rent is in London
- 4 Gamers confess the worst things they've done in The Sims
- 5 Dylan Moran on quitting smoking, being about as sexy as the Pope and why comedy panel programmes are 'c*ck shows'
Costa Concordia: Shipment of Mob drugs was hidden aboard cruise liner when it hit rocks off Italian coast, investigators say
Brixton squat flats now costing up to £3k per month show how out of control rent is in London
Iran nuclear talks: Prospect of deal with Iran pushes Saudi Arabia and Israel into an unlikely alliance
A new (old) cure for MRSA? Revolting recipe from the Dark Ages may be key to defeat infection
Jeremy Clarkson 'could be given minder' ahead of a potential Top Gear return
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
Street preacher quoting from the Bible fined for calling homosexuality an 'abomination'
Jeremy Clarkson sacked live: Alan Yentob 'wouldn't rule out' ex Top Gear host's BBC return
Woman filmed launching racist tirade against men on the Tube for speaking in 'own lingo'
The West has it totally wrong on Lee Kuan Yew
David Cameron calls Labour 'hopeless, sneering socialists' while announcing 7-day NHS plans
iJobs Money & Business
£50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...
£45,000 - £55,000: Loren Hughes: Are you looking for a new opportunity that wi...
Circa £45,000-£50,000 + benefits: Sheridan Maine: Are you a newly qualified ac...
£150 - £190 Daily Rate: Sheridan Maine: One of London's leading water supplier...