BSG makes 10.5m pounds gain despite cuts in demand

A PROPERTY disposal flattered pre-tax profits at BSG International, the motor and aviation components maker, writes Robert Cole.

BSG's taxable profits for the year to 31 December were pounds 10.5m, compared with pounds 7.5m last time. The results also benefited from the absence of one-off costs that depressed 1992's figures.

The underlying performance, however, was sharply down. Operating profits fell by 27 per cent. Most of the damage was caused by the downturn in European car production, but BSG also continued to suffer from a shortage of work fitting out civil aircraft.

Three subsidiaries in the motor components division made a loss in the second half. Richard Marton, chief executive, said: 'In the final quarter they were losing money like it was going out of fashion.'

The losses dragged overall automotive operating profits down from pounds 7.1m to pounds 2.7m. The operating margin fell from 5.5 per cent to 2 per cent.

Profits from consumer and special products - where BSG makes child car seats and aircraft fixtures - fell from pounds 7.1m to pounds 3.9m.

Weaker performances from BSG's components businesses meant that profits from selling and leasing cars were the largest divisional contributor in the year. They made pounds 6.6m, up from pounds 4.1m.

Traditionally, BSG has been viewed as a component maker but the performance of the motor dealerships has changed perceptions. Earnings per share were 2.4p, compared with 1.6p, leaving the maintained 3.2p dividend uncovered.