Alan Jones, the chief executive, said the action would yield benefits this year. "There has been a mammoth amount of restructuring and radical action; now we have to grow our profitability," he said.
He said the sale of its optical fibre and telecom cables businesses would enable BICC to focus on Balfour Beatty, its profitable engineering and construction subsidiary.
He added that the company's power cable business was also set to contribute to the group's growth after years of underperformance.
The measures were behind a two-fold rise in 1998 pre-tax losses to pounds 94m on sales down 11 per cent to pounds 3.9bn. The figures were depressed by a pounds 106m write-down on underperforming assets in BICC's power cables subsidiary and a pounds 26m provision for the loss on the sale of its telecommunications cables division to the US group Corning.
Mr Jones dashed rumours of a bid for BICC, whose shares have slumped nearly 60 per cent over the past 12 months. The company has been seen as a takeover target since last year when the acquisitive mini-conglomerate Wassall acquired a 9 per cent stake. Mr Jones said he had no contact with Wassall or any other potential bidder and added that his sole focus was to grow the business.
But, despite the chief executive's protestations, many in the City think BICC might be the target of some corporate action. The company's share price and credibility have been savaged by the downturn in sections of the cable industry, and by its management's inability to respond quickly. The disaster in cables largely overshadowed the positive growth in Balfour Beatty, which managed a successful transformation from low-margin contractor into a high-growth construction services business.
As a result the shares, down 1.5p to 76.5p yesterday, are at rock-bottom levels, making them attractive to predators. However, as one analyst put it, the cable business is probably acting as a "poison pill" putting off bidders interested in Balfour Beatty.
To its credit, BICC's management, probably spurred on by Wassall, is now trying to address the problems and focus on the better businesses. "Everything they are doing is an attempt to remain in control of their own destiny," one observer said.
If a bid does not materialise, a spin-off of Balfour Beatty could also unlock shareholder value, and break-up valuations suggest that a two- part BICC would be worth around 120p a share. Whatever the outcome, the shares - on around seven-times expected profits of pounds 110m for 1999 - are on a low rating.
But, as one analyst said: "The shares are ludicrously cheap; the only risk is that BICC has always disappointed on the downside in the recent past."Reuse content