Burnfield shaken by profits warning

Click to follow
The Independent Online
SHARES in Burnfield, the acquisitive engineering company chaired by Brian McGowan, plunged by 22p to 61p on a warning of losses in the second half and a slashed final dividend, together with the departure of Ian Staples, chief executive, writes Terence Wilkinson.

Following an expected pounds 500,000 loss Burnfield is forecasting pre-tax profits of about pounds 750,000 compared with pounds 2.7m in 1992. The final dividend is to be cut sharply from 4.1p to 0.85p, reducing the total for the year to 2.5p against 5.75p.

Burnfield said the expected second-half loss, which compares with a pounds 1.27m profit in the first half, reflected redundancy and reorganisation costs at its Isopad and Budenberg subsidiaries, the withdrawal from a possible acquisition and a compensation payment to Mr Staples.

The workforce at Isopad, a maker of electrical surface heating systems, has been cut by 23 per cent. The business is now breaking even after three years of losses.

Budenberg, which makes pressure gauges, has seen its profits vanish in the second half because of falling demand and the cost of new product launches.

Malvern Instruments, bought for pounds 20m in July 1992 with a rights issue at 165p, is performing well at the operating level but its 1993 results will be hit by increased marketing costs.

Mr McGowan, who built up the Williams Holdings conglomerate with Nigel Rudd, joined Burnfield as non-executive chairman in 1990. He resigned from Williams Holdings in April.

Spurred on by hopes that Burnfield wouId repeat the success of Williams, its shares hit a peak of 225p in 1992 but have fallen sharply in the wake of profit warnings.