US lifts Newman Tonks: Dividend cut despite turnaround from loss to pounds 16m profit

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The Independent Online
A STRONG performance in the US helped to boost operating profits 17 per cent to pounds 17m at Newman Tonks, the maker of architectural hardware. The Midlands-based group made pounds 15.8m before tax in 1993, against a pounds 4.4m loss the previous year after closure costs of pounds 9.2m.

But the dividend has been cut to 6.2p from 9.3p, although the latter payout covered a 14-month period because of a change in the company's financial year-end.

Yesterday's results included a write-back of pounds 266,000 unspent from the 1992 provision. Geoff Gahan, chief executive, said: 'We've cut down to where there is market demand, but we continue to pull out costs wherever necessary, although we're now taking on people in some of our businesses.'

He added that UK sales and profits improved despite continuing low levels of building activity. 'Our UK companies' sales grew by about 5 per cent despite no significant improvement in market conditions.

But the star performers in the group were the US businesses, where profits soared 85 per cent to pounds 4.4m. The result was helped by exchange rates; the jump was a more modest 60 per cent in dollar terms.

Mr Gahan said that the US was 18 months ahead of the UK in the economic cycle and that as recovery took hold in the UK, the group would benefit strongly.

The recession in Europe dented profits from Continental businesses. The operating result fell from pounds 6.5m to pounds 5.9m, but Mr Gahan said that the group's efforts to become a significant player in the German market were paying off.

Doug Rogers, chairman, said: 'Overall, we remain confident that the strategies now firmly in place will provide steady financial improvement.'