Unidare interim profit remains static at £3m

PROFITS at the Unidare engineering group have remained static in the first six months of its financial year, with pretax profits stuck at £3 million.

The half year figures issued yesterday were broadly in line with market predictions as fluctuating currency movements, particularly the strength of the Dutch guilder, reduced its overseas earnings.

Over the six month period, Unidare estimates it lost up to £215,000 on the conversion of its overseas sales into pounds. Unidare's chief executive, Mr Paul Duggan, said that much of this pressure has now abated and, if the current rate of exchange is maintained against the guilder, the group could end up making some gains over the coming months.

"We have seen no negative impact from currency movements in the past couple of months and we are optimistic that some of our earlier losses will be pulled back," Mr Duggan said yesterday.

The half year results were also boosted by the proceeds of the sale of its plastics division last year, which yielded £277,000. On the back of the half year performance, the group is maintaining its interim dividend payments to shareholders at the same level as last year at 4.6p per share.

Despite the sale of its plastics division, Mr Duggan said Unidare expects to be able to at least match last year's performance, with end year profits likely to come in at around £4 million.

Group operating profits were slightly down at the half year stage, at £3.04 million compared with £3.08 million in the same period last year. The bulk of its profits came from its engineering supplies distribution businesses in the US, Britain and Ireland, which together account for 75 per cent of its sales.

Operating profits from this division rose from £1.9 million in 1996 to £2.01 million in the six months to the end of March last with sales up in each of these companies following a difficult year in 1996. Its profit margins, however, stayed at much the same level as in the previous year, although some improvement was reported in the latter part of the six month period.

Meanwhile, the group's engineering products manufacturing businesses in the Netherlands and in Ireland, reported slightly higher operating profits over the period, up from £1.5 million to £1.6 million.

The group's stagnant performance follows a slump in profits in 1996, with pretax profits down from £8.1 million to £4.4 million following poor results from its engineering supplies division and a writeoff of £1.43 million at its plastics division. The group has since been restructured and an extensive capital investment programme is due to be completed by the end of 1997.