Hopes grow that 'Simpson effect' will linger at Lucas
But now the architect of recent changes, George Simpson, is leaving with the job half-finished. A cloud has hung over Lucas's shares for months as rumours of Mr Simpson's move to GEC gathered steam, and the uncertainty will continue until a replacement is found.
But the reasons for the 38 per cent jump in interim profits, and evidence that recession in the aerospace industry is over, give hope that the improvements will continue beyond Mr Simpson's departure.
Lucas's trading in the first six months was not without problems, however. Group profits of pounds 61.6m, against pounds 44.5m, were struck despite a downturn in the key automotive markets, particularly France where output by car makers fell 11 per cent.
Even so, the automotive division, accounting for 80 per cent of sales, saw turnover rise from pounds 1bn to pounds 1.2bn, with profits up pounds 8.3m to pounds 65.3m, helped by an increased contribution from Lake Center Industries, the US operation bought at the end of 1994.
Of the four automotive operations, only the diesel business suffered a fall in sales, thanks in large part to sharply reduced demand in the US heavy truck market. But with European and US vehicle sales showing modest growth in the first two months of 1996, any further fall in truck sales should be offset.
Although Lucas showed signs of getting to grips with the aerospace business, divisional profits up from pounds 9m to only pounds 13m were disappointing. But as airlines return to profitability and place more orders with airframe makers, the future looks more rosy. Certainly the aerospace division will counter any further slowdown in automotive growth.
Profit forecasts for the full year are being held at around pounds 180m, with 12.3p of earnings and a 7p dividend. With the shares up 7p to 199p, Lucas trades on a price/earnings ratio of 16 - an expensive 13 per cent premium to the rest of the market. While yesterday's figures were the first good set of Lucas results for a long time, that is high enough until a successor is found.
- 1 Unseen Charlie and the Chocolate Factory chapter deemed 'too subversive' released
- 2 Ebola virus: It's ripped through towns – now the deadliest ever outbreak of the virus is heading for Africa's teeming cities
- 3 Joan Rivers: 'Palestinians deserve to be dead'
- 4 A teacher speaks out: 'I'm effectively being forced out of a career that I wanted to love'
- 5 Mexican woman becomes world’s 'oldest person' at 127
Israel-Gaza crisis: YouTube footage shows scale of destruction after 50 days of shelling
iPhone 6 'hidden code' could indicate sharper screens or bigger phones
Keira Knightley topless: Conservative actress does own take on #Freethenipple campaign for Interview Magazine
Joan Rivers: 'Palestinians deserve to be dead'
Ebola virus: It's ripped through towns – now the deadliest ever outbreak of the virus is heading for Africa's teeming cities
Robin Williams Emmys tribute led by Billy Crystal criticised for including 'racist' joke about Muslim woman
Rotherham child sex abuse scandal: Labour Home Office to be probed over what Tony Blair's government knew - and when
The Rotherham child abuse scandal is a tale of apologists, misogyny and double standards
What do immigrants really think of Britain? Polish immigrant's Reddit post goes viral
Do you realise just how foolish the UK looks?
With Douglas Carswell joining Ukip, my party has taken another giant step forward
iJobs Money & Business
£40000 - £45000 per annum: Ashdown Group: An established professional services...
£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...
£28 - 32k + Uncapped Commission: Guru Careers: A Business Development Manager ...
£40000 - £70000 per annum + Bonus+Benefits+Package: Harrington Starr: C# .NET ...