The company spent pounds 150m in the early 1990s diversifying into equipment for water treatment plants, but yesterday admitted it was not getting much of a return.
However, the group reported taxable profits in the year to 31 March up 8.9 per cent to pounds 269m, thanks to its core water business.
Lack of sales at the US divisions Envirex and Wallace & Tiernan saw operating profits at the equipment subsidiary fell from pounds 19.7m to pounds 8.8m. The division contributed pounds 184m against pounds 183m to turnover, but this included favourable exchange rate movements of pounds 9m.
About two-thirds of business for the equipment division is in the US, where a shortage of Federal funds to municipal authorities cut trade. However Bob Ferguson, finance director, said there was a bill before Congress that should release dollars 3bn. The division's order book had also improved from pounds 60m to pounds 72m.
Group turnover for the year rose 5.3 per cent to pounds 924m and operating profits rose 15 per cent to pounds 326m. A final dividend of 15.4p makes 23.07p for the year, an increase of 7.8 per cent. Shares fell 9p to 511p.