Lucas gains are fuelled by diesel

COST-CUTTING and the popularity of diesel engines helped pre-tax profits at Lucas Industries to rise to pounds 20.1m in the six months to 31 January from an interim pounds 4.2m last year, writes Diane Coyle. Turnover fell by pounds 97m to pounds 1.19bn, with divestments and exchange rate changes more than offsetting sales gains.

Automotive operating profits more than doubled to pounds 27m in the first half, with turnover up 5 per cent at pounds 830.1m. Lucas, strong in diesel components, gained from the continuing diesel penetration of the European market. The group also won new contracts with Japanese car manufacturers in the UK.

Operating profits in aerospace rose from pounds 6.7m to pounds 8.9m despite a 22 per cent fall in turnover to pounds 252m. Lucas will soon use most of an earlier pounds 9.3m provision to settle a dispute with the US government over alleged contract irregularities at a subsidiary.

It has made no specific provision for a second US contract investigation. The applied technologies division reported a fall in operating profits from pounds 4.2m to pounds 800,000 on turnover down pounds 65m at pounds 107m.

Lucas held the interim dividend at 2.1p. The shares fell 10p to 209p.

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