Cook defends `implausible' forecast

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The Independent Online
The war of words between steel castings group William Cook and its pursuer, Birmingham-based Triplex Lloyd, reached a new level of intensity yesterday as both sides traded accusation and counter-accusation.

The fur started to fly after Triplex Lloyd dismissed William Cook's latest profit forecast as "implausible". William Cook responded by accusing Triplex Lloyd of making "a number of ill-considered and inaccurate points" and of failing to understand its business.

"Once again Triplex Lloyd is indulging in cheap jibes in an attempt to divert shareholders' attention away from the key issue which is the value of William Cook's business and prospects," claimed Andrew Cook, chairman and chief executive.

William Cook said its forecast of pre-tax profits of not less than pounds 10.7m in the year to March 1997 showed that Triplex Lloyd's pounds 58m offer was "ludicrously low".

Triplex Lloyd is offering 312p in cash and shares, but William Cook reckons it is worth anywhere between 500p-700p on the basis of the new forecast.

Triplex Lloyd asked William Cook's shareholders to question the quality of earnings which William Cook has forecast.

It noted that on 25 October William Cook issued a "downbeat" interim statement in which Mr Cook said William Cook was seeing a thinning in order books and that he viewed the resulting cut in production with concern.

Six days later a report by UBS, William Cook's own broker, forecast less than 5 per cent growth in pre-tax profits to pounds 8.8m for the year to March, implying no growth in the second half over the previous year.

But Triplex Lloyd said that just eight days after it announced its offer, Mr Cook had already begun to guarantee continued profit growth in the second half of the current year.

"We do not accept this profit forecast as representing a sustainable level of profitability for William Cook," said Graham Lockyer, Triplex Lloyd's chief executive. "The profit forecast is an implausible short- term reaction to our offer."

Mr Cook said the forecast was struck before the bid defence costs but after refurbishment costs of pounds 2.2m charged to the profit and loss account.

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