BSE and strong pound hinder Harrisons

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The Independent Online
Shares in Harrisons & Crosfield fell 9p yesterday to 131.5p after the chemicals, food and timber group painted a gloomy picture of current trading and claimed to be a victim of both BSE in its food and agriculture arm and the strong pound in speciality chemicals.

Operating profits from continuing businesses nudged ahead from pounds 98.1m to pounds 99.7m, while at the pre-tax line, which included a final contribution from the now sold plantation business, profits rose by a similar margin to pounds 120.8m (pounds 119.6m). Adjusted earnings per share were 11.1p (11p), while the dividend was maintained at 9p.

Bill Turcan, chief executive, put a brave face on the figures, saying: "Our chemical businesses had another good year and timber and building supplies recovered well in the second half. We completed our withdrawal from plantations and the group is well placed to take advantage of opportunities for growth in its continuing businesses."

Analysts were less sanguine, however, with forecasts for the current year being pared yesterday to about pounds 117m. One said: "The comment on the food side is what has unsettled people. The implication is that 1997 estimates are looking too toppy."

Chemicals, where Harrisons specialises in chrome and pigments, saw profits rise 12 per cent to pounds 55.9m, at which level they have doubled in five years, with an increase in return on sales from 5.4 per cent to 9.4 per cent over that period.

The timber division, which takes in the Harcros builders' merchants, saw profits tumble from pounds 21.9m to pounds 15.3m. All the damage was caused in the first half, and Mr Turcan said Harcros was now seeing the benefit of actions to reduce its cost base and sharpen its trading focus.

Food and agriculture, where operating profits increased from pounds 31.6m to pounds 33.5m, suffered from the effects of BSE, which reduced demand for cattle feed.