Disposals cost BM 13m pounds in write-offs

BM GROUP, the construction equipment distributor, has had to write off pounds 13m on the disposal of companies that used to be part of Blackwood Hodge, the company BM bought for pounds 69m in September 1990, writes Robert Cole.

BM's shares fell 10 per cent to 54p on the news yesterday.

BM is surrendering Blackwood's UK and Spanish businesses to Imaco, a new company. In the process it is writing off assets of pounds 13m. The businesses sold are about 20 per cent of the original Blackwood group.

BM grew rapidly through the 1980s and continued to acquire businesses aggressively in 1990 and 1991 despite the onset of recession in its main markets.

Shortly after the Hodge acquisition it paid pounds 41m for Thomas Robinson, operated by the company doctor Roy Barber.

When Roger Shute, the chairman who orchestrated BM's growth, retired due to ill health last June, the stock market lost confidence in the company. The shares dropped from 400p to below 100p and have since drifted lower.