Although he said the impact would be lessened in the second six months of the year, he warned that the group's problems extended beyond currency to economic problems around the world, particularly in Germany and Australia which account for 30 per cent of sales.
Analysts immediately slashed profit forecasts for the current year by 10-15 per cent and the shares slumped 36.5p to close at 231p. Further pressure was piled on the stock as it became clear that one large investor had unloaded 80 million shares at well below the market price.
SBC Warburg is thought to have handled the placing in a bought deal, buying the stake at 215p a share and selling on at 219p. The bank refused to comment, other than to say it had been a two-way trader in the stock yesterday.
Geoff Allum, a conglomerates analyst at Henderson Crosthwaite, the stockbrokers, described the latest news as "pretty awful". He has sliced a tenth from his previous profits forecast, leaving a pre-tax figure of pounds 1.22bn for this year, and said the market had previously been prepared to give BTR the benefit of the doubt. The burden of proof had shifted to the company. "The market will now expect the worst."
Addressing shareholders at the company's annual meeting yesterday, Mr Strachan maintained that the restructuring strategy unveiled last year remained on track. The divestment programme was 80 per cent complete, acquisitions were in hand and over 50 restructuring projects were being pursued.
"It is ... my firm expectation that the underlying performance of the group's continuing businesses will improve steadily as our strategy is implemented, and that attractive returns will be generated in the years ahead."
BTR said its warning was based on trading in the first four months of the year, with the difficulties in Germany likely to spill over into the rest of Europe. Underlying sales, excluding currency effects, will be ahead in the first half, although operating profits will fall, with performance picking up again in the second half of 1997.
Parts of the automotive, power drives and process control equipment were among businesses mentioned as being affected by the problems in Germany and Australia.