Warnings pull down Senior and Holders

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The Independent Online
SHARES in two companies, Senior Engineering and Holders Technology, plunged yesterday after profit warnings, the latest in a long line to hit the market.

Shares in Senior Engineering closed at 72p, down 34p on the day. The fall followed a warning from the company that profits in its Thermal Engineering division would be wiped out because of a shortfall in orders and cost overruns on an existing 'significant' contract.

The division contributed pounds 8.3m to the company's pounds 24.2m pre-tax profit in the year to December 1993.

Senior will try to recoup the cost overrun from its customer. The company said the setback was only temporary. New orders have come through for 1995 and the contract incurring cost overruns will be finished by the end of this year.

Harry Philips, a Panmure Gordon analyst, revised his forecasts down from pounds 28.5m to pounds 18m for 1994. He expects pounds 26m for 1995.

'Underneath there is still a good business here,' he said.

Holders Technology suffered a 24p fall in its shares, which closed at 95p after touching a low of 88p, thanks to a warning that operating profits for the year to 30 November were likely to be lower than last year's pounds 436,000.

The company, a USM-quoted precision tool importer, blamed lower margins on the state of the British economy. Britain accounted for three-quarters of group turnover last year.

Rudi Weinreich, chief executive, said: 'While all the company's operations are trading profitably the effects of the recession are still being felt in our UK market place.'

He said customers were opting for cheaper, lower quality products, while competition was also fierce. Mr Weinreich added: 'We are taking vigorous steps to counter this competition but inevitably it will impact on our profits in the short term.'

Holders said the introduction of new products was going well. Mr Weinreich said he expected a 'marked' increase in sales next financial year.

The company said the consolidation of its 30 per cent stake in Dyconex Engineering, a Swiss associated company, this year would also contribute to lower profits.

Profits before tax in the six months to 31 May were pounds 152,000, 39 per cent lower than in the first half of the previous year, although turnover rose 11 per cent to pounds 2.2m.

Holders said it intended to maintain the total dividend at 6p in the current year.

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