FR raises payout despite profits fall

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The Independent Online
DESPITE a 12 per cent decline in pre-tax profit to pounds 21m last year, FR Group, contractor for the aerospace and defence industries, said strong orders in the past six months justified a small dividend increase.

The company is recommending a final dividend of 5.1p, up from 4.74p in 1992 and bringing the full-year payout to 7.56p (7.2p). The shares gained 25p to 290p.

Michael Cobham, chairman, said: 'Although in no way underrating the difficult market conditions which continue to prevail generally in the aerospace and defence industrial sectors, I think I am justified in taking a reasonably optimistic view of the future.

'Across the group order books are currently strong, costs are reducing and productivity continues to improve. There are a number of opportunities we can clearly identify which the group

is well placed to exploit.'

Giles Irwin, FR's financial director, said the order book stood at about pounds 300m, up from pounds 235m at the start of 1993. Some orders that had been expected earlier came good in the past six months.

Among these were the award of an electronic warfare training contract from the Ministry of Defence worth about pounds 50m, a dollars 20m order from the Pentagon to upgrade 10 KC10 refuelling aircraft and contracts to provide outside fuel tanks for the Tornado jets ordered by Saudi Arabia.

Recently, the Ministry of Defence has approved the Phoenix Battlefield project, which for FR means a contract for spares worth about pounds 15m.

Though turnover slipped to pounds 179.8m from pounds 182.8m last year and costs are rising, FR's balance sheet remains strong and the company is actively considering further acquisitions.