BTR opts for pounds 2.8bn disposal programme

BTR yesterday moved decisively to turn its back on its conglomerate past after announcing plans for a massive disposal programme involving nearly one-third of its pounds 9.5bn annual sales to leave the business focused entirely on its engineering activities.

The move, which will be accompanied by a "substantial" repayment of capital to shareholders, marks the final unravelling of the sprawling group covering around 1,000 businesses put together by Sir Owen Green, who, like Lord Hanson, created one of the most dynamic and acquisitive conglomerates of the 1980s.

But BTR appeared to run out of steam in the early 1990s and the latest sell-off is the second phase of a revitalisation programme initiated by Ian Strachan, chief executive, who was brought in in January 1996 with a brief to turn the group around. He has already disposed of businesses with around pounds 2bn of sales since unveiling a pounds 622m restructuring a year ago and last month announced that Robert Bauman, the chairman of British Aerospace, would take over BTR's chairmanship from next May.

The latest plans were warmly received by the stock market yesterday. BTR's shares, which had fallen by one-third since Mr Strachan's arrival, jumped 15p to 234p yesterday, adding more than pounds 600m to BTR's market value, although they remain well below the peak of 407p hit in 1993.

Mr Strachan said that, with most of the original plan to dispose of pounds 2.3bn of turnover complete, he was moving to accelerate the transformation of BTR. He was focusing on engineering because those businesses have the greatest potential for value creation for shareholders, given their leading positions and good growth prospects. Sales in the engineering businesses have grown at a compound rate of 16 per cent over the past five years, against 11 per cent for the operations being sold.

The group will end up with four businesses in automotive products, where it has a commanding position in sealing and anti-vibration systems, control systems, including batteries and meters, power drives and specialist engineering. The rest, covering a range of operations from glass and plastic packaging, through building products to laminates like Formica, are expected mostly to have been sold by the end of next year.

Some observers believe the new chief executive has bowed to pressure from the City to take more radical action to deal with BTR's problems than was unveiled last year. But he said yesterday: "In the 12 months since we announced it, we have made considerable progress and this is the logical extension of it."

He also played down any suggestion of friction with BTR's investors. "There is a continuing dialogue with the shareholders and, on the basis of the fact that they are the owners of the business, we listen to what they say. But they generally remain supportive of the strategy of focusing for growth."

One shareholder injected a note of caution yesterday, saying the sale of so many businesses would be "a huge task." He added: "We don't want a fire sale after all these years. This is always a temptation when management just decides to get shot of businesses."

One analyst suggested Mr Strachan had bowed too far to City opinion. "It smacks a bit of policy on the hoof", he said. "It smacks a bit of giving the City what it wants and the City loves action."

However, other analysts were more sanguine, suggesting that the planned moves could not lead to a re-rating of BTR's shares. Geoff Allum at Henderson Crosthwaite said: "I have always felt what Strachan was trying to do was the right thing. The only question was how long it would take him to get on and do it. He has accelerated that pace dramatically today."

Assuming proceeds from disposals come somewhere in the range pounds 3.5bn and pounds 4bn, he forecast that the shares could now go to between 280p and 320p.

The restructuring announcement accompanied interim figures showing pre- tax profits of pounds 540m for the six months to June, up from pounds 4m in the comparable period, which was hit by the provisions for the original restructuring programme.

Despite being earlier forewarned by a profit warning, analysts were disappointed with the results. The strength of sterling cost pounds 54m in translation and trading effects, but even stripping out exchange effects and exceptional items, profits slipped 5.7 per cent to pounds 534m. The interim dividend is held at 4p, but the group forecast a better performance in the second half.

Comment, page 21

Sport
A 'Sir Alex Feguson' tattoo
football

Arts and Entertainment
Liam Neeson said he wouldn't
tv

Liam Neeson's Downton dreams

Voices
voicesApple continually kill off smaller app developers, and that's no good for anyone
Voices
On the last day of campaigning before the polling booths open, the SNP leader has written to voters in a final attempt to convince them to vote for independence
voicesIs a huge gamble on oil keeping the First Minister up at night?
PROMOTED VIDEO
Arts and Entertainment
Ben Whishaw is replacing Colin Firth as the voice of Paddington Bear
tv

Thriller is set in the secret world of British espionage

Life and Style
life

News
ScienceGallery: Otherwise known as 'the best damn photos of space you'll see till 2015'
Travel
travelWhy Japan's love hotels are thriving through an economic downturn
Life and Style
fashion

Bomber jacket worn by Mary Berry sells out within an hour

Life and Style
Alexander McQueen A/W 2014
fashionPolitics aside, tartan is on-trend again this season
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Rapper Jay Z performs on the Pyramid Stage at Glastonbury in 2008
musicSinger sued over use of the single-syllable sample in 'Run This Town'
Sport
Joel jumps over the board...and into a giant hole
footballFrom joy to despair in a matter of seconds
News
i100
Arts and Entertainment
Pointless host Alexander Armstrong will voice Danger Mouse on CBBC
tv

Much-loved cartoon character returns - without Sir David Jason

Arts and Entertainment
Meera Syal was a member of the team that created Goodness Gracious Me
tv

Actress to appear in second series of the hugely popular crime drama

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Audit Manager Central Functions

To £85,000 + banking benefits: Saxton Leigh: You will be expected to carry out...

Credit Risk Audit Manager

Up to £90,000 + benefits: Saxton Leigh: Credit Risk Audit Manager required to ...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week