Windsor, Berkshire-based Siebe Plc, Britain’s largest engineering company, has posted record figures for the year to April 2 and boasts a very healthy order book for the early stages of the current financial year. The group reported a 19.7% rise in pre-tax profit to #217.2m, on turnover that grew 15.1% to #1,863.5m. The group benefited from the devaluation of sterling, however, and when the #13.1m gain from currency exchange is removed from pre-tax profits, underlying growth was a more modest 12.5%. The group saw record profits in its control activities up 19.7% at #210.2m, however the compressed air and specialist mechanical engineering divisions, concentrated mainly on Europe, experienced lower demand and lower profits, down 22.0% at #25.1m. Safety and life support activities grew 9.3% to #29.4m. The group’s four acquisitions over the last 15 months, Eberle GmbH, Schmidt Armaturen GmbH, Eckardt AG, and NAF Group, also made positive contributions to the balance sheet, #4.8m net on turnover of #78.5m. Siebe purchased 52% of Eckardt AG, the batch control systems firm, in December 1993 (CI No 2,314) for #12.0m, with an option for the remainder this October, which the group will take up. Eckardt and Foxboro Co are the group’s only direct involvement with the computer industry, but whereas Foxboro was the star of the group’s results, Eckardt made the lowest contribution, had the smallest margins and requires and is undergoing a major restructuring programme. With cash reserves of #397.9m, Siebe is hungry for more acquisitions, although there is nothing specific lined up at present. Growth was predominantly in the US and South America, while the UK was slow, yielding less than 1% growth in pre-tax profits to #38.6m. Continental Europe and Japan saw increased demand, but these areas are likely to remain subdued until the end of the calendar year. For Siebe Plc’s chief executive officer, Allen Yurko, in an interview with Reuters, the good news is the acceleration, the momentum that has been generated during the year, with excellent results for the year, however the momentum as we exit the year into the new year is just as exciting. Yurko is also bullish about the future: We’ve set divisonal targets that say we’re targeting, for the next two years or so, as economies recover, a 10% real sales growth and a 15% real profit before tax growth per year. Current orders value around #570m, the highest ever in real money terms, and represent a four-month backlog of work. The group is recommending an increase of 11.6% on the final dividend to 7.34 pence per share, raising the total dividend per share for the year by 11.6% to 11.0 pence. Wild jubilation, however, did not greet the figures in the markets, and the group’s shares shed tuppence to 545 pence. The results tallied with analysts’ forecasts and consensus predictions are for pre-tax profits of #252.0m for the current year.
