The Investment Column: Hampson

RISK IS a characteristic of all investment, as investors in Hampson Industries, the engineer that supplies components to Rolls-Royce, have discovered.

Hampson was prompted to put results out prematurely yesterday after an insurance claim came through following an explosion in one of its factories this year. The factory is being shut down permanently and - despite the insurance - there will be a loss on disposal of pounds 2.25m. That will compound a further loss of pounds 3.3m on the disposal of part of its engineering division.

Investors looking to the core businesses for some reassurance will find little to please them. While sales in Hampson's aerospace division were up by 20 per cent to pounds 31.9m in the half year, sending their operating profits contribution soaring by 37 per cent, Rolls-Royce has been cutting back on its orders, which Hampson warns will have an impact in the second half of the year.

The remainder of the group's engineering assets are experiencing weak demand from the glass industry and from makers of turbochargers. The shares - up 2p at 52.5 yesterday - may be close to their historic lows, but they offer little upside in the near term and bargain hunters should look elsewhere.