BICC lays new plans for cable division as profits dive 15%

BICC , the cables to construction group, unveiled a 15 per cent drop in annual profits yesterday and warned the first half of the year would be challenging for its cable operations.

But BICC, which has seen demand for cables across Europe depressed as governments have privatised electricity utilities or cut investment in state-owned operations, expects to see some benefits from a restructuring in the second half of the year.

The group saw pre-tax profits before exceptionals slide to pounds 110m in 1997 from pounds 129m previously. It also cut its total dividend payout to 8p pence from 12.5p. This compared with market expectations between pounds 98m and pounds 120m. Its shares shed 8p to close at 138.5p.

"The market in energy cables in Europe has been pretty horrendous and sterling hasn't helped ... we have had to take radical action," said BICC's chief executive Alan Jones. This has seen the firm embark on a radical restructuring, with the loss of 2,000 jobs in Europe in a push to drive its power cables operations back to profitability and the removal of pounds 45m from its cost base.

As part of the company's decision to become more focused on power and high-voltage cables, it sold its UK construction and building wire business to Delta , which in turn sold BICC its power utilities, accessories and elastomeric cables business.

This move followed BICC's decision last year to merge its German cable business with NFK of Holland and make severe job cuts in Italy.

These measures are not expected to deliver any benefits in the first half of the year, although the company does see a slightly healthier marketplace for its products.

"We expect the first half of the year will continue to be challenging for our cable operations but in the latter part of the year we anticipate seeing evidence of the results of the action we have taken," said Viscount Weir, BICC's chairman .

The moves were made against a background of overcapacity and poor prices in most parts of the European energy and cable markets and a strong pound. They resulted in a charge of pounds 140m in the 1997 accounts for asset writedowns and other rationalisation costs.

After exceptionals the group made a pre-tax loss of pounds 30m versus a profit of pounds 64m.

BICC was more upbeat about near-term prospects for its construction arm, Balfour Beatty. The division, which has about half the group's turnover, was the star performer in 1997 with operating profits of pounds 42m from pounds 10m last time. A recent reorganisation that saw Balfour create a single organisation responsible for winning and executing large projects is expected to improve margins, currently around 3 per cent.

Elsewhere, BICC does not expect the Asian crisis to have any real impact.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
Voices
An easy-peel potato; Dave Hax has come up with an ingenious method in food preparation
voicesDave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
News
i100
Arts and Entertainment
Jay Z has placed a bet on streaming being the future for music and videos
music
Arts and Entertainment
Festival-goers soak up the atmosphere at Glastonbury
music
News
Japan's population is projected to fall dramatically in the next 50 years (Wikimedia)
news
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Ashdown Group: Training Programme Manager - City, London

£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

Day In a Page

NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
You should judge a person by how they peel a potato

You should judge a person by how they peel a potato

Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Beige is back: The drab car colours of the 1970s are proving popular again

Beige to the future

Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

Bill Granger cooks with fresh cheeses

More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

Shay Given: 'This FA Cup run has been wonderful'

The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
Timeless drama of Championship race in league of its own - Michael Calvin

Michael Calvin's Last Word

Timeless drama of Championship race in league of its own