Suter shares suffer after 8% decline: Analysts disappointed at no sell-off

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The Independent Online
SHARES IN Suter, the industrial group chaired by David Abell, fell 10p to 144p, after it reported an 8 per cent decline in profits for 1992 to pounds 16.3m before tax.

Analysts said the fall in the share price reflected disappointment in the City that Suter had not made a disposal. There had been speculation that the valves business was likely to be sold.

Suter shares have doubled over the past four months, following the conclusion of a Department of Trade and Industry investigation into the company.

Bruce Davidson, analyst at Smith New Court, said: 'Suter needs a disposal to show the underlying quality of the group's assets and to give Mr Abell ammunition to go out and do some more deals.'

Mr Abell refused to be drawn on Suter's intentions towards James Wilkes, the Midlands engineering company, in which it bought a 10 per cent stake in early January.

But he said: 'We are looking around as we always do for businesses that fit.'

Turnover at Suter fell 5 per cent to pounds 196m and earnings per share were 9 per cent lower at 9.6p. The dividend is maintained at 8.8p, and the company announced a bonus scrip issue of warrants at a rate of one for every 10 shares held.

Mr Abell said the results were very creditable in the light of trading conditions that were the worst any of the directors had experienced.

'Our overall return on sales was 11 per cent, which many companies would be happy to have even in good times,' he added.

The distribution division, which includes the group's large refrigeration business, was hardest hit, suffering a 30 per cent decline in operating profits to pounds 4.5m.

But the chemicals division surged by 19 per cent at the operating level to produce profits of pounds 37.5m.

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