Heywood sounds a grim note

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The Independent Online
Shares in Heywood Williams fell 6p to 223p yesterday after the automotive glass to building products group warned of difficult trading in most of its businesses. The company also announced the pounds 23.2m acquisition of Maccess, a West Yorkshire-based wholesaler of automotive components.

Ralph Hinchliffe, chairman of Heywood, said: "Apart from our continental European operations... current indications are that our other businesses will experience no improvement in market conditions for the remainder of the year."

Mr Hinchliffe highlighted renewed pessimism in the UK building materials market, adding that US discretionary spending dipped in the second quarter and is expected to be flat for the rest of this year, hurting the sale of "recreational vehicles" for which Heywood supplies fittings and accessories. Both problems hit underlyingpre-tax profits in the first half to June, which fell from pounds 16.1m to pounds 14.1m, the company said, although the interim dividend is being maintained at 5p.

At home, Heywood's PVC profile business has been squeezed between the weak market for housing improvements and rising raw materials costs, accounting for around pounds 1.5m of the profits fall in the first half. Price competition in the auto-windscreen operation shaved another pounds 500,000 from the figures. In all, UK PVC operating profits slumped from pounds 5.81m to pounds 3.31m. Reported profits for Heywood were pounds 24m, after the inclusion ofpounds 7.99m profit on the remaining Thermax glass business.

The addition of Maccess will give Heywood's automotive range around 40 per cent of the UK wholesale market. Operating profits were pounds 3.7m in the year to June.