Investors bridle at Bridon setback

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The Independent Online
INSTITUTIONAL pressure is growing on management at Bridon after the Doncaster-based rope maker shocked investors last week with a profits warning - just months after they were asked to stump up pounds 21.2m in a rights issue launched on the back of solid results.

Shares in Bridon slumped 17p to 102p on the news, leaving shareholders wondering why they subscribed to the August cash call at 135p to fund a German acquisition.

"It's a very major setback and typical of the old Bridon," said one disgruntled fund manager at the weekend. "Under chief executive Ron Petersen it was hoped this sort of thing would not happen. This is the first blot on his copybook."

Mr Petersen has been instrumental in turning round Bridon since it ran up losses of pounds 23m two years ago. But price cuts of 10 per cent in the final quarter by two US rope rivals, problems at a loss-making Australian textile subsidiary earmarked for disposal and delays in a Norwegian bridge contract have piled pressure on the company.

Pre-tax profits this year will fall short of the pounds 4.8m before exceptionals scored in 1994 - and way below the pounds 7m to pounds 8m City analysts had been expecting.

Bridon also warned that the benefits from an investment programme and new production methods would not show through until at least the end of this year.