T&N haunted by asbestos liability
Deputy City Editor
Automotive engineer T&N surprised the City with a £140m exceptional charge to cover potential asbestosis claims, three months after it put its liability at £100m. It also warned that the annual cost of meeting claims would be higher than forecast.
The continuing asbestos millstone, together with the promise of a 45 per cent cut in this year's dividend, took the shine off an otherwise strong trading performance and the shares, which have fallen by 40 per cent since late last year, lost another 2.5p to close at 157.5p.
The exceptional charge slashed pre-tax profits from £70.3m to £10.7m in 1994. Thanks to unrelieved advanced corporation tax, the company also faced a tax bill twice pre-tax profits, leading to a loss per share of 3.2p (8.6p profit).
Analysts said the company, formerly Turner & Newall, a leading asbestos producer, failed to dispell fears of a rights issue to fund the acquisition of Kolbenschmidt, a German motor components producer over which it has an option.
Colin Hope, chairman, finally caved into demands from the City that the dividend, which had been uncovered by earnings for three years, was unsustainable given the open-ended potential injury claims. The running yield of 8.5 per cent before the announcement underlined scepticism about the pay-out.
Having more or less promised no cut in 1994's payment, last year's dividend was maintained at 10.85p. This year it will be pegged at 6p.
T&N's new engineering businesses saw turnover rise 16 per cent to £1.94bn and trading profit gain 47 per cent to £180m. Group margins rose from 7.4 per cent to 9.3 per cent. Mr Hope said demand from vehicle manufacturers remained exceptionally strong and T&N was "well placed to ride the peak of asbestos litigation".
- 1 King Salman: Just five days in, Saudi Arabia's new king has already overseen a beheading
- 2 The BBC has just done more to eradicate ‘terrorism’ than all our wars since 9/11
- 3 Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 4 Presidential optical illusion offers clues to how brain processes faces
King Salman: Just five days in, Saudi Arabia's new king has already overseen a beheading
Auschwitz liberation 70th anniversary: Woman sent to three Nazi death camps describes surviving gas chamber
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Ukip Jelly Babies cause uproar on Amazon
Chilling drone footage captures Auschwitz ahead of 70th anniversary of liberation
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
Greece elections: Syriza and EU on collision course after election win for left-wing party
British Muslim school children suffering a backlash of abuse following Paris attacks
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Liberal Democrat minister defends comments suggesting immigration causes pub closures
iJobs Money & Business
£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...
£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...
Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...
£16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...