Staveley Industries, the measurement, mechanical engineering and minerals company, yesterday announced further job cuts and the sale of one of its divisions in an attempt to stave off further losses.
Roy Hitchens, chief executive of Staveley, said he was pressing ahead with plans to sell the measurement division and hoped to complete a sale by the end of this year.
As part of a move to make the business more attractive to potential buyers, 50 employees in the bagging systems section, Chronos Richardson, are to be made redundant at a cost of around pounds 1m. During a restructuring of the business two years ago nearly 200 jobs were axed.
Mr Hitchens said "between 10 and 20" companies had expressed an interest in Staveley Measurement and more serious discussions would proceed with a few shortly. While he would prefer to sell to a single bidder, he said he would consider breaking up the division.
Chronos Richardson lost pounds 5m in the year to the end of March and dragged profits in Staveley Measurement down from pounds 5.2m to pounds 2.6m.
Group profit before tax for the year to the end of March, announced yesterday, plunged 28 per cent to pounds 16.6m. Besides the problems in the measurement operation, the results were hit by pounds 4.7m of reorganisation costs. Earnings per share fell 40 per cent to 9.8p.
Mr Hitchens said he was optimistic about prospects for the rest of the group, pointing to an agreement signed with United Gas to store natural gas in salt cavities.
Analysts expect the sale of the measurement business to fetch between pounds 30m and pounds 40m but Mr Hitchens did not rule out a rights issue to fund future acquisitions "in the long term".
Some analysts said that while the future did look "more interesting" if Staveley managed to sell the measurement side, the company was looking vulnerable to takeover. The shares dropped 6p yesterday to 166.5p.
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