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Staveley sounds growth warning as profits slip

STAVELEY, the measuring equipment and engineering group that also owns British Salt, announced an 18 per cent fall in pre-tax profits for the six months to October and warned that the full-year result is unlikely to be up on last year, writes Tom Stevenson.

Brian Kent, chairman, said: 'Economic difficulties in Europe are delaying investments in Germany from reaching their full potential. Further re-dimensioning may be necessary if the market changes further. Whilst it is still early to predict the year as a whole, growth will be hard to obtain.'

The cost of reducing overheads in mechanical and electrical services and weighing systems trimmed operating profits by pounds 1m to pounds 8.1m. That combined with weak trading and lower interest on UK deposits to cut margins to 5 per cent, resulting in pre-tax profits down 18 per cent at pounds 7.5m.

Sales rose 7 per cent to pounds 166m, but the company said this had been due to strong orders at the start of the year. Since then, higher orders from the minerals division had been offset by weaknesses in the other businesses.

The minerals operation, which produces more than half Britain's salt requirement, raised profits from pounds 5.7m to pounds 6.4m. Measurement systems fell from pounds 2.9m to pounds 1.2m, while engineering slipped from pounds 1m to pounds 500,000.

Earnings per share were 4.9p, compared with 6p in the first half of last year. The interim dividend is maintained at 2.3p.

The shares closed 19p down at 209p, a new low for the year.