The fortunes of the troubled airframe components manufacturer, Aerostructures Hamble continued to slide with the announcement of a 66 per cent fall in pre-tax profit for the year end December 1994.
Pre-tax profits for the year fell from £4.5m to £1.52m with a reduction in turnover from £70m to £62m.
The disappointing results did not help the share price, which slipped from a stagnant 33p down to 30p at the announcement.
Management blamed the poor results on cutbacks and rescheduling of subcontract work by customers, mainly British Aerospace. Operating costs also rose in the second half of 1994
Aerostructures was formed by a £47m management buyout from BAe only two years ago and currently employs 1,400 at Hamble, Southampton.
The company was floated last June, but between mid-September and mid- October the share price crashed from 64.5p to 24p following disclosure of the production difficulties.
An investigation by the company's accountants and lawyers focused on contracts for production of major components for Harrier and Hawk aircraft. The investigation revealed that the contracts had been incorrectly scheduled, and this has overloaded capacity at the plant. This in turn had disrupted other contracts for components, of which some were lost and others lost money.
Analysts say that the float was "too much too soon" with management expectations riding too high.
Aerostructures has also undergone several management changes. The chief executive, Andy Barr - who was recruited from the motor industry - retired because of ill health last year and was temporarily replaced by David Ring until Chris West took over in January of this year.
Hamble's hopes for the future are based on the adoption of the latest manufacturing methods and technology drawn from the motor industry. The company has also established a "new business centre" to de-bug products as they moved from prototype to production.
The board has recommended no final dividend for 1994. For 1995 the company predicts only modest growth, but states that its bank facilities have been renewed on a secured basis.