Overseas sales boost Fairey

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The Independent Online
FAIREY, the acquisitive engineering and aerospace group, has again overcome difficult market conditions. It has lifted interim pre-tax profits to pounds 8.1m, up 14 per cent. Overseas sales now constitute more than 50 per cent of group turnover of pounds 48.2m.

Electronics and electrical power continued to grow, contributing pounds 5m towards the group's pounds 7.4m operating profits. Turnover rose by 42 per cent to pounds 25.7m.

But operating profits in the aerospace arm, Fairey's traditional core business, were cut by 25 per cent to pounds 778,000 on turnover down 17 per cent to pounds 10m in the six months to 27 June.

John Poulter, who succeeded Derek Kingsbury as chief executive in January, said aerospace profits had been hit by problems from relocating its factory.

'I expect the figures to be pretty stable from here on,' he said. Fairey's involvement with the Tornado programme has ended but the company still has a number of aerospace projects.

Mr Poulter said the growth in electronics, boosted by the introduction of new products at Red Lion Controls and a 'gratifying' contribution from LaserMike, was very satisfactory. Figures from the filtration division were static.

There was also good growth in Arcom Control Systems, where acquisition was completed in May.

'We are positioned in some pretty specialist areas and we have taken a forceful approach to cost control in businesses in which volumes have come down,' Mr Poulter said.

'But most of our businesses are fairly profitable and almost inevitably they are cash-generative.'

Fairey had net cash of pounds 14.8m, against pounds 12.7m at the end of December 1991. It has accumulated this gradually since coming to the market in 1988 with about pounds 500,000 of debt.

'Our cash pile gives a great feeling of security,' Mr Poulter said. 'That's not to say we would refrain from spending it.'

Michael Blogg, an analyst at James Capel, said the figures were 'way ahead' of his pounds 7.2m forecast, adding: 'I expected the consolidation at aerospace, but Red Lion continues to improve.'

Earnings rose by 15.8 per cent to 15.4p. The interim dividend of 3.3p was up by 10 per cent.

Fairey's shares, which have outperformed the market this year by 45 per cent, rose 7p to 394p.