Savings from job cuts help BTR to pounds 1bn profit

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The Independent Online
THE WIDE-RANGING conglomerate BTR shed nearly 12,000 jobs last year, helping to bring about pounds 180m in cost savings and push pre-tax profits pounds 168m ahead to pounds 1.09bn.

The job losses - which left BTR with 131,000 employees - included 7,000 from Hawker Siddeley, acquired in 1990, and 5,000 in on-going BTR operations. Acquisitions brought in a net 3,000 employees.

Shares in BTR, which takes in rubber hose, packaging and aggregate businesses, rose 15p to 612p on the news.

The company also announced that Norman Ireland, its former finance director, would become chairman on the retirement in May of Sir Owen Green. The appointment maintains BTR's tradition of excluding outsiders from the board. All the non-executive directors are former executives.

Mr Ireland, who is widely credited with developing BTR's financial systems, is stepping down as chairman of Bowater.

Operating profits rose by 32 per cent to pounds 1.23bn, helped by a full year's contribution from Hawker, where margins rose to between 12 and 13 per cent. Group margins were unchanged at 14.2 per cent.

BTR made a further pounds 100m provision against Hawker's balance- sheet value during the year, taking the total to pounds 330m. It used pounds 230m of that during last year as it restructured the business.

Alan Jackson, chief executive, said this year's results - which are benefiting from recovery in the US, offset by weak markets in Continental Europe - would gain from currency movements.

Nearly half group earnings are in the US and Australia, and will be boosted by about 16 per cent thanks to sterling's devaluation. Mr Jackson said: 'The UK is flat but not falling. There is a glimmer of an upturn, but it is very weak.'

Asked about expansion plans, he said: 'A big acquisition is not even in our planning. We will be paying attention to maximising Hawker Siddeley.' He said product groups such as packaging and sealants might want to expand through add-ons.

Pre-tax profits, arrived at in accordance with new accounting rules, were stated after pounds 36m ( pounds 56m) of redundancy costs.

The final dividend is 10.25p, making 18p for the year, up 9 per cent. There is a two-for-three bonus issue.