The group made pounds 5m before tax in the six months to the end of September, against pounds 8.5m last time. But advance warning of the exceptional provision, along with an increased dividend, kept the shares firm: they closed 3p lower at 425p.
John Hudson, chief executive of the Telford-based group, said he was happy that the rationalisation of Forkhardt was complete and that the company was at a size where it would benefit greatly from any recovery in the German machine tools market. 'We expect trading to remain subdued on the Continent for the next few months, but I am a little more optimistic than at the time of our full-year results in June,' he said. 'I think we will see some pick-up in Europe in 1994.'
During the recession in the UK, the group made almost half its sales in mainland Europe. Mr Hudson said that position was now reversed, with the slowdown on the Continent offset by better conditions in the UK. 'It has picked up reasonably here and we're moving ahead. But the strength of the recovery is somewhat blunted by the Continental recession as Europe remains our main export market.
'Domestic conditions are not bad, with inflation under control and that very acceptable cut in interest rates this week.'
Group turnover from continuing operations rose from pounds 114m to pounds 131m. Operating profits before the exceptional charge were pounds 650,000 lower at pounds 7.4m. Mr Hudson said he believed the group had performed well in a period of exceptional economic pressure.
The balance sheet is strong, with net cash of pounds 8.5m. Mr Hudson said Wagon intended to pursue growth in the automotive products division through acquisition.
The interim dividend rises 3.1 per cent to 6.32p on earnings per share down from 14.62p to 4.52p. Mr Hudson said he expected results for the full year to be much the same as last time, setting aside the restructuring costs.Reuse content