Triplex profits trimmed by construction slump

TRIPLEX LLOYD, the metal components maker, has been caught by the downturn in the market for building materials and recorded lower pre-tax profits.

Taxable profits in the year to 31 March fell from pounds 7.6m to pounds 7m despite strong performances in the divisions that supply the automotive industry and power stations.

Triplex's weak point was building materials, which was biased towards commercial construction. Its operating profits slumped to pounds 1.3m from pounds 2.4m as its margins dived.

Automotive produced pounds 4.2m operating profits against pounds 2.7m, and improved profit margins from 6.5 per cent to 7.8 per cent. The supply of high specification parts for power generating machines added pounds 3.6m, up from pounds 2.5m, and margins increased from 5.8 per cent to 7.4 per cent.

Triplex plans to concentrate its business in those divisions where profits and profit margins rose, as costs - largely jobs - were taken out. The company also benefited from a series of small 'bolt-on' acquisitions during the year.

Triplex has found added resilience in that nearly half its product is sold overseas.

Overall Triplex sales were pounds 167m against pounds 200m, following the sale of its Lee Beasley Deritend subsidiary. Losses associated with the disposal - compared with a profit contribution last time - also depressed overall profitability.

Extraordinary items incurred in withdrawing from its Canadian plastics business wiped out retained profits. A final held at 4.5p a share maintains the total dividend for the year at 7p. After tax, the extraordinaries, and paying the dividend, Triplex's losses for the year were pounds 6.1m.

Triplex has gearing of 45 per cent, which restricts expansion. However, interest payments are three times covered by operating profits.

Earnings per share fell to 11.4p from 12.7p but the shares rose 4p to 139p.