Outlook: BTR

THE LAMENT of many a chief executive with a plunging share price and a hostile audience is that the market simply does not appreciate what he is trying to do or what he has already achieved.

With Ian Strachan at BTR, the mismatch between deeds and perception is writ large. Since he took the helm in January 1996, BTR has been transformed from a rambling conglomerate into something approaching a focussed engineering business.

Along the way businesses with sales worth more than pounds 5bn have been thrown overboard, roughly halving the size of the group, whilst pounds 1bn has been splashed out on strategic acquisitions with perhaps another pounds 2bn to come.

At the same time BTR has dispensed pounds 1.5bn to shareholders and earmarked a further pounds 500m. Nor has it bought and sold badly. Proceeds from disposals are running at 1.2 times the sales of the businesses involved, whilst the prices paid for acquisitions are comfortably below one times sales.

Operating margins are running at around 14 per cent, which though hardly scintillating, are more than respectable for the engineering sector. The balance sheet is strong and the interest cover is healthy.

All in all, not a bad corporate re-engineering job, you might suppose. Unfortunately the markets do not share that assessment. They have not been prepared to give Mr Strachan's strategy the benefit of the doubt and the result has been a share price which has underperformed the Index by 70 per cent since Mr Strachan embarked on his corporate makeover.

Four profit warnings in the last three years have scarcely helped sentiment. What is worse, BTR has had a knack of finding itself in the wrong place at the wrong time. Thus it exited aerospace just as the airlines worked themselves into an ordering frenzy, and got deeper into the automotive market just as the General Motors strike brought half the car plants in North America to a standstill.

Whereas other lame corporate ducks find circumstances against them on one or two fronts, BTR is in the firing line wherever it turns. To be fair, BTR has not been slow to warn the markets. But telling the City just how bad things are going to be in Asia does not make the pain any easier to bear.

One unforgiving analyst yesterday suggested that if BTR were a horse, it would have been taken out and shot. Mr Strachan continues to insist the nag is capable of racing. But unless that translates soon into a rebound in shareholder value, he may find his steed removed from under him.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

Day In a Page

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence