Bromsgrove in talks on selling division

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The Independent Online
(First Edition)

BROMSGROVE Industries, the specialist engineering conglomerate, is likely to sell its automotive interests as part of a strategy to concentrate on niche markets.

Bijan Sedghi, chairman, said yesterday that he was in detailed talks about disposing of the business after several approaches from car component manufacturers.

A question mark also hangs over the future of the environmental division, which is being considered for sale or merger.

'There is no way we are forced sellers, so we will take our time and carry out our obligation to consider all options and approaches,' Mr Sedghi said.

Bromsgrove was formed as an automotive component supplier to Rover Group but diversified radically in the acquisitive 1980s. Analysts estimated the components division would fetch around pounds 15m.

Yesterday the company reported interim pre-tax profits down from pounds 4m to pounds 3.1m, a decline blamed on margin pressures and volatile customer schedules. Turnover was pounds 57.5m against pounds 54.1m.

Mr Sedghi said he was surprised at the market's downbeat reaction to the figures - the shares fell 4p to 94p - and he emphasised that profits before non-recurring costs were pounds 4.2m compared with pounds 4.4m. The interim dividend is unchanged at 1.65p, covered 1.7 times.

Operating profits at the automotive division were down from pounds 779,000 to pounds 646,000, while the environmental businesses fell from pounds 673,000 to pounds 171,000. The star performer in the group was the aerospace and medical division, where operating profits rose from pounds 806,000 to pounds 1.1m.