JFB shares are pushed lower by profit warning: Disposal splits group into separate steel and engineering firms

Click to follow
The Independent Online
SHARES in Johnson & Firth Brown fell 3p to 41p as the specialist engineering group accompanied news of a pounds 6.25m disposal with a profits warning.

The company said problems at a loss-making operation in the light engineering division had been more serious than expected.

Johnson was already facing problems on contracts for the manufacture of machinery and process equipment.

In June Johnson reported losses of pounds 842,000 in the six months to the end of March, against profits of pounds 2.07m, and admitted that it had been through a difficult 18 months, with low order books and poor margins.

A year ago Johnson's shares fell more than a fifth to 37p when the company warned that it was short of orders from its key aerospace, motor and petrochemical customers.

Johnson said yesterday that although order books at most of the group's companies, particularly parts of the Firth Rixson division, have continued to improve, difficulties at its Woodbank operation worsened. The company said: 'New management has been appointed to the operation and remedial actions have been initiated.'

Analysts, who two months ago were forecasting annual profits of pounds 6m, are downgrading estimates.

The sale, also announced yesterday, of six companies in the light engineering division, in effect splits Johnson into a steel company in Sheffield and an engineering business in Manchester.

The sale was to a management buyout team for pounds 3.97m plus pounds 2.28m repayment of inter-company debt. The team is led by George Hardie, JFB's group managing director, and Tony Edisbury, company secretary.

David Hall, currently joint managing director of JFB, is the new group chief executive and Neil MacDonald will be finance director. John Bergin will be company secretary.