Graseby shelves plans to float American arm

GRASEBY, the former Cambridge Electronic Industries, confirmed yesterday that it had shelved plans to float its American arm Graseby Andersen because of the US market's poor reception of environmental stocks.

Paul Lester, chief executive, announced the postponement as he warned that the markets for the company's medical, product-monitoring and environmental operations had not seen the full benefit of the upturn in the UK and US.

Profits from the group's technology division suffered from an anticipated downturn in defence- related business, which pushed sales pounds 4.5m lower to pounds 12.6m and more than halved profits from pounds 2.67m to pounds 1.05m.

That contributed to a 14 per cent fall in group sales during the six months to June to pounds 47.4m and limited the rise in pre-tax profits to pounds 100,000, making pounds 5m.

Earnings per share were little changed at 5.8p (5.7p) while last year's rebasing of the dividend meant the interim payout was cut from 3.3p to 2.7p. An unchanged full-year total of 6.6p is forecast.

Mr Lester said the technology division's activities were being expanded into commercial markets and said the medium-term prospects for the group's remaining defence businesses were improving.

The downturn in technology masked improvements in the other divisions, where sales grew 17 per cent. Product launches are expected to lead to further growth in 1995.

An increase in hospital expenditure before the company's year- end in March helped medical sales in the UK to rise 11 per cent.

Environmental profits increased 14 per cent after higher sales to utilities by the division's emission-monitoring business. A 26 per cent rise in product-monitoring sales led to a 69 per cent profits jump. The shares closed 6p higher at 158p.