Lucas nears disposal target: Aerospace engineering and heating division sold for pounds 9m

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The Independent Online
LUCAS Industries, the aerospace and automotive components group, moved closer to a pounds 100m disposal target yesterday with the sale of its aerospace engineering and heating systems division for pounds 9m.

Since last October, when Lucas announced a programme of sales in response to a collapse in profits and bid rumours, it has raised about pounds 70m from disposals. It is understood that the remaining pounds 30m will be achieved by the time full-year figures are announced in October.

The business, which has been sold to its management, is one of four put up for sale last year. It makes ice protection equipment and aircraft lighting systems, employs 300 at its Luton manufacturing site and had sales of pounds 17m in 1992.

In March, Lucas sold its Autocentres business to Lex Service for pounds 13m and then disposed of its fluid power systems division to Sophus Berendsen of Denmark for pounds 40m.

Attention is now focused on whether Lucas will maintain its dividend for the year to July. Despite bouncing from last year's loss of pounds 67.5m, profits are not expected to exceed about pounds 50m this year, with Lucas's exposure to the depressed European car market and slow military expenditure holding back recovery.

That will leave last year's 7p payout uncovered by earnings. Last year Sir Anthony Gill, chairman, promised that a maintained dividend would be covered by earnings.

At the half-way stage, when he announced a held 2.1p interim payout, he admitted that disposal proceeds would count to that target. Now it seems likely that even with profits from sales Lucas will fall short.

Lucas shares, which have doubled since last August on persistent bid rumours, added 2p to close yesterday at 150p.