BOC shares jump despite profits plunge

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BOC, the industrial gases group, yesterday continued the shake- up of its businesses which will see 5,000 jobs disappear worldwide with news of a further 400 job cuts in the Asia/Pacific region.

Chief executive Danny Rosenkranz, who is moving the group's head office to a vacant building in Guildford, said that the group had felt the impact of the economic downturn, particularly in the North Pacific region, the UK and South Africa.

However, BOC shares were marked up by 18p to 866p, despite the announcement of a 44 per cent fall in pretax profits to pounds 247.2m for the year to September 30 after a pounds 144m profits from selling the Ohmeda healthcare business and exceptional restructuring costs of pounds 293m.

Mr Rosenkranz reported that the group is beginning to see some benefits of the rationalisation programme and that the cost base "is showing signs of being much better".

By the time the present programme is complete BOC will have shed about 12 per cent of its workforce of 43,000. Analysts said that the results obscured a steady underlying performance from the continuing business, which showed a 4 per cent increase in turnover and a 7 per cent rise in earnings per share to 52.06p

The performance in the fourth quarter is less healthy, with sales down 2 per cent, profits unchanged at pounds 100.3m although earnings per share were up 5 per cent, reflecting a 28 per cent drop in group borrowings and a reduction in debt interest from pounds 95m to pounds 84m.

Sterling continues to be strong against the currencies where BOC trades and the business climate remains challenging. A quarter of BOC's sales are in the Asia/Pacific regions, where profits fell 20 per cent last year, and more than half the sales of the vacuum technology division are to semi-conductor manufacturers.

Analysts left current-year forecasts unchanged yesterday at pretax profits of pounds 405m and earnings of 54p in the current year, rising to pounds 450m and 60p next year.