Sir Peter Phillips, AB's chairman, said: 'Since July, constructive discussions with TT group have continued, which have led to an exchange of information and may or may not result in an offer being made by TT to acquire all the issued share capital of AB.' He said he expected the issue to be resolved within 'a couple of months'.
AB also said it had signed heads of agreement with a buyer for its Swansea Industrial components business and was also in negotiations to sell its automotive systems business.
The group yesterday announced pre-tax losses of pounds 11.2m for the year to 30 June. Last year, it reported losses of pounds 6.3m, but this has been restated to pounds 14.8m, because of changes in accounting standards. Goodwill written off against reserves for an acquisition has been put through the profit- and-loss account, and restructuring costs, taken in 1991 below the line as extraordinary items, have been restated as exceptionals.
Further exceptional costs of pounds 4.6m were incurred this year as the radical rationalisation continued. Total sales fell 20 per cent to pounds 171.2m, partly reflecting the effects of AB's slim-down.
The finance director, John Sharp, said the reduction in turnover, excluding discontinued businesses, was 10.8 per cent. But Paul Ryder, group managing director, said he expected an improvement in the current year as the order book had recovered significantly.
Gearing has risen from 74 per cent to 89 per cent, but Sir Peter said the divestments would significantly reduce borrowings.
Robert Millington, analyst at BZW Securities, said management had followed the right strategy in slimming down the business, but that AB was likely to end up as part of a larger group.
'Net asset value is pounds 1 a share, so it makes sense for a company like TT to acquire it,' he added. There is no dividend (0.1p) and the shares fell 10p to 47p.Reuse content