Investment Column: Standards slip at Siebe
Wednesday 03 June 1998
The engineering giant's share price fell 126p to 1377p yesterday after pre-tax profits came in at pounds 486m, a rise of 14.7 per cent, but below the pounds 500m some analysts had expected.
The company was hurt by the downturn in the Far East and the strength of the pound and dollar. But the City was also worried by a slowdown in organic growth during the second half of the year.
Moreover, analysts were shaken by the high cost of restructuring and the fact that Siebe says pounds 100m more must be spent on heavy cuts over the next two years, when it plans to cut 4,000 jobs world-wide.
This is the downside of Siebe's recent flurry of acquisitions. In the past year, it has spent pounds 1.3bn on deals that include APV, the industrial processing group, and Eurotherm, the controls maker. Bedding down those buys will cost money.
Chief executive Allen Yurko believes the pound and dollar will remain strong for some time. To counter this and other problems - like a squeeze on prices as a result of deflation - some manufacturing will be shifted to lower-cost areas.
Six months ago Mr Yurko was bullish about the Far East but he admitted yesterday he plans to shift away from the region.
Analysts have downgraded their 1998 profit estimates to about pounds 545m. This gives Siebe a forward multiple of 20 times. High enough
- 1 Disney heiress Abigail disowns her share of family profits in West Bank company
- 2 The secret report that helps Israel hide facts
- 3 'Women should not laugh in public,' says Turkey's Deputy Prime Minister in morality speech
- 4 Israel's propaganda machine is finally starting to misfire
- 5 HSBC closes bank accounts belonging to Muslim clients in the UK
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK
Sabina Altynbekova, the girl branded 'too good looking' for volleyball, says social media obsession with her is a 'bit much'
Disney heiress Abigail disowns her share of family profits in West Bank company
'Women should not laugh in public,' says Turkey's Deputy Prime Minister in morality speech
HSBC closes bank accounts belonging to Muslim clients in the UK
The secret report that helps Israel hide facts
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
A day in the life of Vladimir Putin: The dictator in his labyrinth
Putin is 'thuggish, dishonest and reckless', says British ambassador to US
Richard Dawkins tweets: 'Date rape is bad, stranger rape is worse'
Boozy, ignorant, intolerant, but very polite – Britain as others see us
- < Previous
- Next >
iJobs Money & Business
£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...
£450 - £650 per day + competitive: Orgtel: My client, a leading bank, is curre...
£350 - £400 per day + competitive: Orgtel: Senior Analyst, ALM Data, Halifax, ...
£500 - £600 per day: Orgtel: Java developer - Banking - London - Up to £600/d...