THE DISASTROUS losses in Haden MacLellan's US operations, which nearly doubled last year and contributed to a halving of group operating profits, have been eliminated in the first half of 1993.
But operating profits fell again, from pounds 3.3m to pounds 2.1m, in the six months to 30 June, with pre-tax profits down by 25 per cent at pounds 1.8m. Harold Cottam, chairman, said the manufacturing division, which contributed about 25 per cent of the pounds 152.7m total turnover, saw scant relief from recession in Europe and the UK recovery was slow.
'Turnover was up, but margins were pushed,' he said. 'It's a familiar story. We're having to work very hard to make relatively small amounts. The recovery is patchy, and we won't be the first to come out of recession once recovery is really on the way.' The picture was brighter in the US, however, where new management at the process engineering business was given the target of breaking even, but brought in a small profit.
Last year, poor management and contract control led to US losses of pounds 3.4m at the year-end.
Mr Cottam said he was encouraged by increased exports, particularly to Australia and China. The machine tools order book for 1994 was filling up as manufacturers began to refit plant.
But he warned that the five-yearly review of property might lead to lower carrying values in year-end figures, although there was a pounds 2m provision for revaluation on the balance sheet.
The interim dividend was held at 1p. Yesterday the shares closed down 0.5p at 58p.Reuse content