For the first time since it was founded in 1895 the Leicester- based company plans to cease machining its own metal. It will concentrate on the design and assembly of its core precision grinding machines and intends to sell its small tools and honing machine activities.
Jones & Shipman shares dropped by 12.5p to 45p on news of the losses. It has passed its final dividend after making no interim payment. In the previous year it paid a 1p interim but no final.
John Wareing, managing director, said it was possible that the company would sub-contract its metal machining to overseas suppliers since there was capacity available in South-east Asia and Eastern Europe.
About 130 people from Jones & Shipman's machine shop will be made redundant in the immediate future. Another 120 jobs will go from disposals and internal reorganisation while 35 per cent of the company's factory space has been earmarked for sale.
Sales fell by 30 per cent to pounds 15.9m, reflecting depressed demand from, among others, important customers in the aerospace and automotive engine component industries. About 70 per cent of Jones & Shipman's machine tool sales by value are computer- controlled.
'We see little improvement in trading conditions before the end of 1992. New order enquiries are at acceptable levels but regretfully conversion into actual orders has not been as fast as we would have liked,' Mr Wareing said.
After incurring an operating loss of pounds 3m last year, Jones & Shipman has charged pounds 3.75m to cover redundancy and restructuring.
The cost of restructuring will be met from the company's own resources and planned disposal proceeds. End-year gearing was 38 per cent.Reuse content