BFG 'over-declared' profits

MICHAEL BORLENGHI, the new chairman of British Fittings Group, the industrial pipelines and pump firm, said yesterday that the company had been over-declaring its profits for the past two years.

Mr Borlenghi, who has implemented a programme of restructuring and redundancies since his appointment in July, said scrutiny of the accounts had led BFG to make writedowns of pounds 2.2m in the book value of some trading assets.

The interim dividend was cut from 1.375p to 0.5p, down by 63 per cent. The shares yesterday fell by 20 per cent from 75p to 60p.

BFG made a pre-tax loss of pounds 1.2m in the six months to 30 June against a profit of pounds 1.7m at the same stage last year. Mr Borlenghi said he expected a markedly improved second half performance. Operating profits were pounds 878,000 on turnover which fell 4 per cent to pounds 40.43m. Bad debts cost the company pounds 500,000.

Interest charges amounted to pounds 1.28m and redundancies and disposal of property cost a further pounds 622,000.

The Fraud Squad is still investigating the theft of pounds 1.18m worth of stock last year from one of BFG's subsidiaries.