SILVERMINES, the engineering and technology firm, is confident of further strong growth following the rise in pre tax profit from £3.5 million sterling in 1995 to £4.1 million for 1996.
"1996 was a year of continued progress for the group during which a number of strategic developments have strengthened the group and created the opportunity for future organic growth," said the chairman, Mr Bob Morton.
"The joint venture announced, earlier this week with Echlin for our automotive motion technology division is a very exciting development. The joint venture partners will share the investment and rewards of this growth market, a major step forward in the evolution of the electric car."
Under the deal, Echlin Europe, a subsidiary of Echlin, a US producer of automotive products, will have a controlling 51 per cent stake in Automotive Motion Technology.
This new company will manufacture electrical motors for the motor vehicle industry. It will have an initial share capital of £7.6 million and Silvermines will own the remaining 49 per cent.
Silvermines has been developing motors for electrically powered hydraulic steering (EPHS) for cars and light commercial vehicle. Successful trials have been carried out over the past three years.
Two contracts worth £11 million have already been secured to deliver 450,000 units per annum for the next six years. This technology, together with the associated assets, will be transferred to the new company for £5.6 million.
Most of this goes toward the payment of its equity share but £1.9 million will be left and this, Silvermines said, will be used to reduce the group's gearing.
The latest results from Silvermines shows a rise in sales from £54.0 million to £65.0 million. The final dividend is being raised from 0.85p net per share to 0.95p, making a total of 1.30p compared with 1.15p. Gearing amounted to a modest 18 per cent.
The group's aerospace division comprising Muirhead Vactric Components and Norcroft Dynamics was strengthened through the acquisition of Pickering Controls in the US.
