Delta plans to axe 230 jobs

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The Independent Online
DELTA, the electronics group, yesterday added to the gloom hanging over the British manufacturing industry when it announced plans to cut 230 jobs and warned that it may be forced to make future investments outside the UK as a result of the strong pound, writes Peter Thal Larsen.

The job losses, which are part of a pounds 4m cost-cutting programme, are in Delta's Electrical and Plumbing divisions and are likely to be spread among the group's operations around Birmingham and Manchester. Most of the redundancies are likely to fall in the second half of the year.

The announcement was made as Delta revealed that, before acquisitions, first-half operating profits had halved to pounds 13.6m as a result of the strong pound and the economic turmoil in the Far East. Turnover fell 8 per cent to pounds 395.8m. Acquisitions contributed operating profits of pounds 9.7m on turnover of pounds 62.6m.

Meanwhile, Jon Scott-Maxwell, Delta chief executive, warned that future investments might go overseas. "If we've got a plant in Asia-Pacific and a plant in the UK we would have to look carefully at the relative cost advantage," he said.

He added that the company's restructuring plan, unveiled last year, remained on track despite the economic setback. Delta's cables and materials' business, which is up for sale, should be sold before the end of the year.

Mr Scott-Maxwell said the strong pound had wiped pounds 6.5m off profits in the first half while the Asian crisis had cost another pounds 4m.