FKI Plc’s restructuring has paid dividends in its full-year results. The group saw its pre-tax profits leapt ahead 38% to #52m, on turnover that added only 3.8% to #747.7m. The British engineering group, which specialises in equipment for the automotive industry, process control and materials handling machinery, said that while the trading environment in its United States operations, which represents 52% of its business, had stayed buoyant, business in Europe was tough. As far as the UK and Europe are concerned, that continues to be disappointing, commented Eric Bowers, financial director. We certainly see nothing coming out in terms of increased demand there… the recession in France and Germany continues to bite pretty hard. Its process control division, which comprises the group’s computer-related parts, had a mixed performance, with good management of contracts in Kuwait and progress in the US yielding improved profits. However profits in the division’s French companies were hard hit by the recession. Operating profit in the division rose to #7.3m from #5.2m, last year. The group had restructuring costs of #6.7m, spent mainly on European activities. It said it had started discussions on the disposal of some non-core businesses. Although the results were at the top end of most analysts’ forecasts, FKI’s shares suffered from an overall weak market yesterday and fell seven pence to 166 pence. Analysts were impressed by FKI’s good margin growth, and believe FKI is on target to achieve operating margins of 10% this year, against 8.7% in the second half.
