BOC warns of decline: Shares plunge and analysts downgrade outlook

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The Independent Online
SHARES in BOC plunged 63p to 651p after the industrial gases group warned that its operating profits before interest would not 'quite match last year's level', writes Neil Thapar. The warning came despite an increase in taxable profits from pounds 251m to pounds 262m for the nine months to 30 June on a 12 per cent jump in turnover to pounds 2.3bn.

However, the move prompted City analysts to downgrade their profit forecasts for the full year. Martin Evans, chemicals analyst at Hoare Govett, trimmed his estimate from pounds 365m to pounds 338m. 'No one is entirely sure about the warning but trading conditions seem a bit disappointing,' he said.

BOC blamed difficult trading conditions for the expected decline in profits. 'The US recovery in the last few months has slowed, recovery in Australia has stalled, the Japanese economy is still affected by policy paralysis and, while the UK shows recovery, its focus seems to be on sectors which have so far had relatively little impact on gas demand,' it said.

Operating profit before interest grew by 4 per cent to pounds 325m in the first nine months, but after excluding currency benefits, it was down 1 per cent.

The gas products division boosted operating profits from pounds 217m to pounds 228m. The vacuum and distribution side almost doubled profits to pounds 23m and healthcare profits rose from pounds 73m to pounds 73.7m. Interest charges rose from pounds 55m to pounds 64m.

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