Rolls speeds Vickers into black: No plans to sell luxury car manufacturer but a partner may be needed

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The Independent Online
VICKERS, the defence, automotive and medical group, roared back into profit last year driven by a return to the black at Rolls-Royce, its luxury car business.

After losses of pounds 100m in the previous two years, Rolls helped Vickers' automotive division to a pounds 10.5m profit in 1993. The contribution helped to turn a group loss of pounds 36.6m in 1992 into a profit of pounds 32.3m.

Sir Colin Chandler, chief executive, said that Vickers had no plans to sell Rolls nor was it in negotiations with anyone. But he conceded that the car maker would need a partner in order to go ahead with the development of a new model, likely to cost at least pounds 200m.

Rolls is expected to unveil a design concept for the next Bentley at the Geneva motor show next week, but Vickers executives say the motor industry recession has probably pushed back the need for the new car by four to five years.

Rolls is forecast to trade profitably this year on sales of about 1,400 cars after cutting the workforce from 5,300 to 2,200 since 1990 and overhauling work practices at its Crewe plant.

Defence profits increased from pounds 7.8m to pounds 10.3m, helped by a pounds 140m order from Oman for 18 Challenger 2 tanks and four armoured recovery vehicles. Vickers is now pressing the Ministry of Defence to confirm a pounds 600m follow-up order for 259 Challenger 2 tanks. The contract will boost Vickers' order book to about pounds 1bn and safeguard 1,700 jobs at factories in Leeds and Newcastle.

Helped by the proceeds of its pounds 60m rights issue, the group ended the year with net cash of pounds 18m compared with borrowings of pounds 100m and gearing of 48 per cent a year earlier.

Cosworth, the specialist engine and automotive castings business, enjoyed one of its best years in motor sport, with Nigel Mansell's Ford-Cosworth-powered Lola winning the US IndyCar series. But supplies of engines to the commercial car industry fell victim to the recession.

Despite a slowdown in medical markets, the medical division reported a strong profit rise from pounds 5.9m to pounds 9.7m.

The final dividend is 1.75p, taking the payout for the year to 3p (1.5p).

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