SHARES in the Rubicon specialist engineering group, taking in the Higgins Group in Galway, crashed 52p to 115p following a boardroom profit warning accompanied by disclosure of cutbacks involving as many as 20 per cent of employees in certain divisions.
Rubicon chief executive Mr Tom Wightman said the group's difficulties involved British operations and did not extend either to the Higgins Group in Galway - acquired for £25 million last year - or to the group's lead smelting operation in Dublin.
"Higgins is doing well and web are very pleased with its steady progress," he said.
Directors said sales projections were being lowered for certain divisions following a slowdown in orders and warned that annual profits for the 12 months to the end of May "will be substantially below market expectations".
Looking further ahead, though, directors expressed confidence in the "inherent strength" of all the group's divisions and prospects for 1997/98. Improved earnings are forecast for next year.
The share price collapse effectively ends the group's enviable reputation as a growth stock in the engineering sector, which served to lift its shares to more than 200p last year.
The profit warning surprised share analysts looking for substantial growth in full year profits from £10.9 million sterling to more than £20 million on the back of major acquisitions over the past year or so. Takeovers included the £94 million sterling acquisition in late 1995 of the Calder Group of engineering and industrial materials businesses in Britain and the £25 million of the Higgins Group nearly a year ago.
Share analysts quickly revised their projections after the board's profit warning and now expect full year profits to emerge in the £14-15 million area.
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