A savage deterioration in the UK economy since July, coupled with problems in Italy has been playing havoc with the share price of French distribution company Metrologie Internationale SA, Paris, this week, and the company has had to come out with a statement warning of a dramatic drop in net profits for 1990 after its […]
A savage deterioration in the UK economy since July, coupled with problems in Italy has been playing havoc with the share price of French distribution company Metrologie Internationale SA, Paris, this week, and the company has had to come out with a statement warning of a dramatic drop in net profits for 1990 after its shares plunged on the Paris Bourse on Monday and again on Wednesday. The warning came from comments on Wednesday by president Roger Haddad that since 1989 the company had been comfortably profitable. On Monday the company’s shares lost 10% of their value, falling to the equivalent of $14.60, and after recovering on Tuesday, they lost 2.5% of their value again on Wednesday to close at $15.60. Haddad declined to comment on this share movement. Control of the company is held by company founders and directors and Paribas with 60%; the other 40% is freely traded. While 70% of the group’s activities are performing well, with 24% growth in turnover forecast this year, in turnover, it is known that the group is having difficulties with its Italian subsidiary and with its operations here in the UK. Italy accounts for 16% of turnover and the third-party maintenance and distribution business there has put in a poor performance throughout 1990 and is expected to come in at a loss of $1.2m against a profit last time of $1.1m. In the UK, which contributes 13% of Metrologie’s turnover, the group has been facing a severe recession in the economy since July. The operating loss here is currently running at $5m and has caused the group to cut 120 jobs. The remaining 70% of Metrologie’s business comes from distribution operations in France, Germany and Spain, and appears to have grown satisfactorily and by year-end, turnover on a like-for-like basis should have grown by 24% to $608m. And extrapolating figures for the first nine months, pre-tax profits before non-recurring items for the full year should come out at $20m against $15m last year. However because of the problems in the UK and Italy, group net profits will be significantly down on the $14m recorded last year, although it will show a profit. Among the charges will be will be hit hard by extraordinary restructuring costs of $3m in the UK, and of $1.4m at Metroservice as well as by net charges of $4m borne by the parent company. On the plus side, there is a gain of $2.7m on sale of shares in the first half, but it is losing hope that it will now be able to sell its Composants unit in Italy, but negotiations are continuing. Over the past three years Metrologie has grown spectacularly, doubling its turnover between 1988 and 1989. In 1989 net profits were at $14m on turnover of $690m. Last March, Metrologie was forecasting a profit of $16m on sales of $900m, but first half profits were down by 16% at $5.6m.