The Birmingham Post from Birmingham, West Midlands, England • 9

The Birmingham Post WEDNESDAY March 23 1994 business Business Pages in association with Going Public? Try 11 Ernst 11 Ernst Four-page pullout section)' BUSINESS DIGEST Hunslet has Steeling themselves for market blow Crude steel production in industrialised countries fell by 16 per cent to 289 million tonnes in February compared with the same period in 1993 the International Iron and Steel Institute said New rate of debt has upgraded to A3 from Bal the long-term debt ratings of Birmingham Midshires Building Society had enough of battles Milk float A £637 million milk float is heading for the stock market on Monday in the shape of Scottish company Robert Wiseman Dairies Shares are being sold to financial institutions at lOOp POPULAR SHARES £80 million contract it signed with British Rail in 1991 for 43 of the three-car 323 electric trains 25 of which were earmarked for use on the Cross City line which runs through Birmingham from Lichfield to Redditch Under the contract they should have started appearing on the line late in 1992 But the company said yesterday that persistent problems with faults and modifications demanded by BR meant months of delays The first 323 was in use on the line in January this year All the Cross City Line trains have now been built but most are still either being modified or used for driver retraining BR has asked for damages for late delivery from the company under penalty clauses in the contract but both Hunslet and BR are refusing to say what they amounted too At least two orders for trains from UK operators have been cancelled after the government announced the timetable for the privatisation of the railways Hunslet TPL is a subsidiary of the giant Austrian train manufacturing group Jenbacher which is hoping to switch manufacturing work to Leeds from other parts of the group to augment orders from Holec By PHILIP WILLIAMS Business Staff Dogged by a falling order book and punitive damages for failing to deliver trains on time to Cross City line Hunslet TPL has signed over its Midland design operation to a Dutch company Leeds-based Hunslet which is being pursued by British Rail for substantial damages has agreed to the acquisition of its Birmingham operation including the rights to the controversial Class 323 commuter train by one of its Dutch suppliers Holec Ridderkerk The financial details of the acquisition have not been made public feel this is the best way forward for Hunslet said a spokesman for the company None of 60 design and engineering staff based in Stir-chley Birmingham will lose their jobs under the complex deal Most will transfer to Holec and continue work on the 323 and the Class 157 trains which Holec also takes over in the deal In addition Leeds sister manufacturing company will be guaranteed work from Holec which is based near Rotterdam on future orders Hunslet ran into trouble with the Try Group to go for land purchase as way forward By ANDREW L1ACH City Correspondent Try Group has grasped the nettle at its loss-making nouse-building operation after it slipped deeper into the red last year The company plans to sharpen the geographical focus of Try Homes under new management and expand through land purchases Last year Try Homes built 152 houses down from 200 in 1992 and the division lost £888000 more than twice the amount lost in 1992 Try Homes where Mr David Cal-verley recently became managing director aims to pull out of its Scottish and East Anglian housebuilding activities and concentrate in the South-east Try yesterday announced a rights issue of three new shares at 23p each for every five owned to raise £56 million to fund land purchases to match its planned sales of 375 homes a year by 1 996 The cash call was accompanied by Uxbridge-based well-flagged losses of £2 17 million for 1993 against an £810000 loss in 1992 on turnover which grew by £63 million to £1242 million Shareholders whose shares closed down 3p at 30p will receive just the 05p interim payout because Try has no distributable reserves and cannot legally pay a dividend The group said it would seek approval to reduce its share premium account That would enable it to resume payouts which should be lp per share in the current year Midland business is based on the former Moffat Whittall operations in Birmingham Its largest contract in the region is the £1 1 million conversion of Coombe Abbey in Coventry into a luxury hotel due to open next year Mr Peter Howell chief executive said the group's total order book which includes a major development at the All England Tennis Club in Wimbledon stood at £126 million The company had secured contracts through exclusive negotiation rather than highly-competitive ten-! dering to help to improve margins Environmental winners in the UK British firms have made huge gains in the environmental market and are among world leaders in the fast-growing sector according to a major report by Birmingham-based Ecotec Research and Consulting It is to be presented at Environment and Technology Exhibition at the NEC Birmingham The study produced for the Department of Trade Industry shows UK companies are generating a trade surplus of £234 million in the market which is expected to grow by 50 per cent to £250 billion by the end of the century Heads! Birmingham Lord Mayor Coun Paul Tilsley demonstrates his ball skills for Bobby Charlton when the two men launched the Birmingham Business Games which take place in September Local companies will be invited to enter teams for a wide range of sports from golf to football to go-karting organised by the former footballer's company Bobby Charlton International Participants can use the event to make business contacts and promote their products and the heavily-sponsored games also provide cash for the Sports Aid Foundation charity They will be staged at venues all over the city BSG manages slight improvement US Fed raises interest rate American policy-makers decided last night to raise short-term US interest rates again The decision came at a meeting of the Federal top policymaking group the Federal Open Market Committee after which Federal Reserve chairman Mr Alan Greenspan released a brief statement This did not specify how much the US central bank was raising short-term interest rates saying only that the actions were to be associated with a small increase in short-term money market interest rates" But private US economists said they understood the Fed was increasing interest that banks charge each other on overnight loans from 325 per cent to 35 per cent City View Page 11 readily acceptable 31 per cent without the scrip dividend The shares fell l'ip to 77'2p where they yield 52 per cent Mr Marton has now completed a strategic review of all activities which he began last July But he has not yet presented his conclusions formally to the board He promises to have his plan finalised by the end of June It could result in a drastic reshaping of the group Yesterday he said only that: elimination or substantial improvement of problem areas by the end of the year is already receiving attention as the first stage of our Moves were also afoot to sell and shareholdings in two associated companies Loss-makers last year included Britax Vega the mirror-maker Wingard and Geco in France all badly hit by the German recession nal dividend is 25p reflecting confidence in prospects for 1994says chairman Mr Astley Whittall But there is also an enhanced share alternative whereby shareholders will be able to take shares worth 50 per cent more than the cash dividend It is a device to overcome the tax penalty involved in not having enough UK earnings to cover dividends stockbrokers Panmure Gordon have agreed to provide cash for shareholders who do not wish to keep shares issued to them under this scheme If holders of 90 per cent of the shares take up this option BSG will save £75 million cash £6 million in what would have otherwise been paid for the final dividend and £15 million in advance corporation tax BSG was 27 per cent geared at the year-end which would rise to a By HEVILL BOYD MAUNSELL City Editor full-year result for 1993 was just marginally better than indicated in the profit warning last November when demand from Continental car builders for its lighting and mirrors stalled abruptly Then Mr Richard Marton only six months in the managing chair said full-year profits would be not less than £85 million indicating no more than a break-even for the second six months He also pointed to £2 million to come from two property sales In the event BSG made a £89 million trading profit and collected £19 million from the sale and leaseback of Britax lighting factory in Droitwich As promised in November the fi NEC PORTABLE PHONE Overseas rivals cash in on Malaysian row Appleyard holds £6m for expansion plans dpw SECTION I CONNECTION 2YR REPLACEMENT WARRANTY 1ST YEAR ITEMISED BILLS rhf mobile mm quoup 8-10 Hockley Hill Birmingham (Approach on to Hockley Ail prices plus VAT and business tariff aiime Flyover City side) Optimistic: Mr Bryan Townsend from a £164 million rights issue last autumn even after the Whitworth purchases have money in the bank If we find the right opportunities we are looking at the West and East Midlands and the Thames A 20 per cent improvement in turnover to £367 million and the benefits of major cost-cutting since 1990 coming through had led to the major improvements in profits said Mr Atkin Manchester motor dealer West Midland garages made a contribution to a strong recovery from the previously depressed car market Overall the full-year profit rose to £304 million from £206 million A final dividend of 3p gives shareholders an 1 1 per cent increase for the year Shares finished lp ahead at 2 1 1 Managing director Mr Alec Murray said Quicks was showing faith in its Leamington operation by making it a multi-franchise site selling Rover Citroen and now Nissan cars The Coventry showroom had done well he added The other West Midland sites at Oldbury West Bromwich and Sellv Oak had performed as expected Mr Murray added By PAUL ORIGAN Business Staff Yorkshire motor dealer Appleyard is looking at expanding its new West Midland operation with a £6 million war chest Appleyard has just bought a Vauxhali garage in Dudley as part of a £102 million five-franchise package from baking group Whitworth and opened a Nissan-Hyundai showroom on a former Cowie site in West Bromwich in a separate deal The group reported full-year profits up dramatically from £200000 to £51 million but its shares closed 2p down at 155p despite an early rally to 158p The combined turnover of the old Whitworth dealerships is £446 million Together they had an operating loss last year of £100000 though the Dudley garage is in profit earnings per share were 68d after a 08p loss last year A z9p final dividend makes 55p for the full year a 6 per cent increase Business development director Mr John Atkin said Appleyard still has a large amount of the proceeds left For the widest choice of BMW Approved Used Car1 021 -552 2825 Rydale Cars 819 Wolverhampton Road Warley West Midlands ApcvovaU PSf finding it more difficult and more competitive trading with the Far East and that has not been helped by the press are getting instances of companies which have been doing regular business with customers in Malaysia being told they can no longer do He warned: word has gone out an impression is being created across the Far East were told today by a company how a competitor had a portfolio of Press cuttings they were carrying around seeking to cause The perception being encouraged he acknowledged was business with Britain and you might get Former Foreign Secretary Lord Howe yesterday spoke of the moral obligation hanging over the Government even after arms sales to Malaysia and aid for the Pergau dam were disentangled He was giving evidence to the Foreign Affairs Select Committee investigating the £234 million in aid granted to Malaysia for the dam following a £1 billion arms contract with Britain Lord Howe said despite the aid and arms sales being disentangled the Malaysians had been left with the impression that they would get something beyond the arms deal It amounted to a obligation which would have made it difficult for us to move away altogether without being accused of a breach of Mr Peter Shore chair- man of the committee questioned Lord Howe over the fact that even after the terms of the original protocol had been withdrawn the Malaysians still received the equivalent of 20 per cent £70 million in grant aid for the dam and £130 million in export credit guarantees Mr Shore said the £200 million figure recun-ed a watermark an indelible stain through the whole GPT order Pagn By JOHN PUCKERS Business Editor rivals are trying to cash in on the trade row with Malaysia West Midlands region of the Confederation of British Industry warned yesterday They said they were getting reports of competitors hawking round dossiers of newspaper clippings in a bid to blackball UK firms The message being put across was trade with the British and you are liable to find yourself being smeared The CBI is warning firms must guard against anti-British feeling developing in the Far East The warnings came as Kidderminster carpet firm Brintons was denying suggestions that it was in imminent danger of losing out on the chance of a major order because of the Malaysian boycott of British goods in the wake of the Pergau Dam affair It said it planned to press on regardless and tender for a contract to carpet the lounges for a new airport under construction The Malaysian bribery wrangle and threats over the democracy row with Hong Kong were heavily to the fore at a CBI re- Sonal council meeting at I MI in irmingham The Malaysians have slapped a Sublic sector ban on trading with ritain angered by a series of critical Sunday Times articles The Chinese have threatened a buy British last policy but seem to be targeting certain high profile contracts continuing to do some deals such as one involving the Coventry-based network systems division of GPT largest telecommunications manufacturer which yesterday announced a £40 million order to China Birmingham Chamber of Industry Commerce has insisted that non-Govemment trade is still surging in Malaysia But CBI regional chairman Mr Bryan Townsend said: are Midland firms still full of enthusiasm Business optimism and confidence are still surging despite imminent tax rises the West Midland region of the Confederation of British Industry insisted yesterday The bullish forecast came as Chancellor Kenneth Clarke insisted that economic recovery was strong enough to take next tax rises its CBI regional chairman Mr Bryan Townsend said the buoyant picture in the UK contrasted with a mixed bag in Europe stirrings in the German economy but continued gloom over France More and more West Midland firms were taking on people even though the demand was largely for temporary staff going through a lot of restructuring at very great cost there is no way industry is going to be employing large numbers of people on a permanent he added Any reaction from tax rises was likely to be short term said Mr Townsend it will be offset by interest rate Mr Clarke said that although his November Budget was well received at the time he realised then that and upset would start as April because tax rises and spending cuts were never popular TSB warns of more jobs to go NEWSPAPER ADVERTISING WORKS 69 of adults look at their regional newspaper for their leisure activities RSQa 1992 comfortable but it is essential if we are to remain competitive and to provide a first-class service to customers while maintaining rewards for risking their capital But he said he was confident of the economy and added that the bank was looking for suitable acquisitions He expected bad debts to fall further from the £343 million recorded in 1993 TSB had one of the strongest capital ratios among bankipg institutions he added TSB which last month announced 400 job cuts including 63 at its retail banking headquarters in Birmingham yesterday reinforced warnings about more job losses to come this year The bank said in January when it announced a leap in pre-tax profits from £5 million to £301 million for 1993 that up to 1000 jobs could go this year and unveiled the first cuts in February But chairman Sir Nicholas Goodi-son told the annual meeting in Glasgow: restructuring of the business will continue to be un A SMALL PRICE FOR GREAT COVERAGE The Birmingham Post Obptay: 021 234 S362 CtauM: 021 233 0555 CHAMPION OF THE MIDLAND.