Bromsgrove Industries aims for divestment

Click to follow
The Independent Online
BROMSGROVE INDUSTRIES, the engineer that has expanded quickly under the chairmanship of Bijan Sedghi, is about to embark on a divestment programme.

News of the company's change of strategy came with annual taxable profits that rose 23 per cent for the year to 31 March. However, underlying performance measured by earnings per share was less positive. Reflecting the growth in the number of shares issued to pay for acquisitions, they fell 9 per cent to 7.75p.

When Mr Sedghi, a lawyer, took the chairmanship of Bromsgrove in 1987 the business had a turnover of pounds 18.5m. Last year sales rose to pounds 108m compared with pounds 85.5m. Pre-tax profits rose to pounds 7.6m from pounds 5.6m.

Bromsgrove operates six divisions making components for aerospace, marine, automotive, environmental and other industrial uses.

Mr Sedghi said he wanted to concentrate in niche areas, producing specialised products for international markets, in the process making goods that could sell with wide profit margins.

'The strategy may mean that we concentrate on three or four areas rather than six or seven,' he said.

About two-fifths of Bromsgrove's output is made for overseas markets. Profits on making metal parts for aerospace and marine uses rose, as did profits in Bromsgrove's plastics subsidiary. However, the automotive and industrial operations suffered.

The automotive side had to carry losses at Hartland Extrusion Forge, which makes axles for heavy goods vehicles. Mr Sedghi said he hoped Hartland would break even this year.

The shares rose 1p to 104p and the dividend was lifted 10 per cent to 4.4p.