Falling sales of SUVs hit autoparts maker Tomkins

Profits at the engineering group Tomkins plunged 80 per cent in the first half of the year, smashed by the $175m (£ 88.4m) writedown it made at its Canadian car parts business following falling sales of SUVs.

The UK group posted only a slight decline in sales, but pre-tax profits plummeted to just $61.6m for the first six months of this year, from $293.6m in the corresponding period of last year. Its forecast for the second half of the year only served to heap more misery on investors.

David Newlands, Tomkins chairman, said the group "continued to face challenging macroeconomic conditions in the first half of 2008". He added that its automotive original equipment and residential housing operations "have weakened further since our last update". Profits were hit by what the group called a "non-cash impairment" of $175.1m, primarily in relation to the value of its Ontario-based Stackpole business, which is fully exposed to the weakening automotive markets in the US.

The surprise announcement of this charge was brought on by North Americans turning against that bugbear of the environmentalists – the sports utility vehicles, or SUVs – and light trucks.

"Production volumes of light trucks and SUVs have fallen faster than we budgeted for," the chief executive Jim Nichol said, adding that production was at its lowest level since the 1980s.

Tomkins bought Stackpole, which makes car parts for customers such as General Motors and Ford, for $331m in 2003.

The group added that its building products division had also suffered in the wake of the credit crunch.

It expects market conditions to continue to be "challenging" for a number of its businesses, including for building products and Gates Powertrain, the residential business of its Air Systems Components division.

The group added that while the industrial and automotive markets in Europe were relatively strong in the first half, they are expected to soften in the second.

The company will also be battered by the rising cost of energy and raw material, especially steel and oil-related materials, and admitted it would be forced to put up its prices as a result.

"We expect the second half headwind from raw materials to be higher than the first, though low-cost country sourcing, material substitution and price increases will mitigate much of the impact," it said.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

Day In a Page

Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones