Glynwed results disappoint

GLYNWED, the Midlands engineering group, is continuing its drive to refocus on core activities. The company announced that it has sold 16 companies for pounds 160m over the last 18 months at an average price of 12 times their annual earnings, and spent pounds 90m buying five companies at an average of nine times their earnings.

The finance director, William McGrath, said yesterday that borrowings of pounds 62m a year ago had been converted into pounds 56.5m of net cash in the year to the end of June, which leaves Glynwed well placed for further acquisitions, but the process has inevitably shrunk the business.

Turnover fell by 13 per cent in the first half and profit before exceptionals was down by 8 per cent to pounds 40.3m. Profits and margins in the core businesses - pipe systems and consumer and food services - rose enough to make up for a slight fall in profits from the metals processing division. Interest charges fell sharply.

The downturn in overall profit could almost entirely be accounted for by the disposals of businesses over the previous year and by the strength of sterling, which reduced published profits bypounds 3m. The result triggered an 18.5p fall in the shares, which closed at 185p.