Torday & Carlisle dives pounds 13.3m into the red: Bid survivor passes dividend after lean year

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The Independent Online
TORDAY & Carlisle, the ship servicer and neon sign maker that survived a hostile takeover attempt 18 months ago, has fallen deeply into the red.

Taxable losses for the first full year after the bid lapsed were pounds 13.3m, against profits of pounds 25,000 in the comparable 12 months to 31 December 1991. Pre-tax losses were exacerbated by pounds 11.7m of exceptional costs, but at the operating level performance was still grim. Operating losses were pounds 679,000, down from profits last time of pounds 1.4m.

In November 1991 the part paper, part cash bid from Dowding & Mills valued Torday at pounds 18.8m. Today Torday's market capitalisation is pounds 4.8m.

Torday shares closed unchanged at 30p. They were floated at 155p in March 1990 and climbed to a peak of 185p later that year. At the time of Dowding's takeover attempt the shares traded at 110p.

On yesterday's prices the Dowding nine-for-five share offer for Torday would be equivalent to 97p. A cash alternative was pitched at 108p.

Operating profits from two of Torday's three subsidiary companies fell. Profits from DMI, which repairs diesel engines in merchant ships, were cut in half to pounds 1.1m. Losses at Oldham Signs, the sign-making business, were nearly three times as bad at pounds 1.9m compared with pounds 750,000.

Elfab Hughes, which makes safety devices for pressurised production processes, lifted trading profits from pounds 700,000 to pounds 750,000.

Most of the pounds 11.7m exceptional costs came from a provision for the elimination of goodwill included in the value of Oldham Signs. But pounds 3.5m resulted from the reorganisation of the business, mostly at Oldham Signs.

Torday put the signs division up for sale last summer, but after failing to receive acceptable offers, decided to keep with the business and restructure it.

Debt has also spiralled. Borrowings are pounds 7.5m against pounds 7m and the gearing ratio of debt to net assets was 109 per cent at the December year- end. Interest charges rose to pounds 894,000 in 1992, up from pounds 729,000.

Losses per share before the provision for the goodwill write-off (which has no effect on cash, but is the upshot of updating company accounting policies) were 30.8p compared with losses of 4.6p. Including the goodwill write-off, losses per share were 81.8p.

Paul Torday, chief executive, said the company was waiting for a general economic recovery that would quickly feed growth in Torday's main businesses. However, his chairman, Peter Ryan, said: 'There are few unambiguous signs of economic recovery.'

The dividend, which was cut from 7p to 4.5p for 1991, was passed altogether for last year. Torday had to transfer pounds 13.2m from reserves to settle the 1992 profit and loss account.

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