BTR profits warning sends shares into slide

BTR, the industrial conglomerate, saw its shares slide yesterday after warning that operating profits in the first half would be "moderately below" the comparable period. The statement to shareholders attending the annual meeting sent the shares 14p lower to 297p, wiping almost pounds 550m off the company's stock market value to pounds 11.6bn.

The drop was blamed on the polymer plastics business in Taiwan and the US operations of BTR's sealing systems division. The majority of the group's business have increased both turnover and operating profits in the latest half year, the company said, but Taiwan had been hit by the downturn in the chemical cycle, while sealing systems had suffered from start-up costs relating to new car models and a new plant in North Carolina.

However Ian Strachan, who took over as managing director last year, played down yesterday's profits warning, saying it was not a surprise. "These two items have been discussed since last September ... but we wanted to get it out of the way before the start of the close season and we all go into purdah." Mr Strachan said the group had sounded warning notes about the two businesses at the heart of yesterday's warning at the time of the preliminary results in March.

Sealing systems had a good future, with two big new models in the US. The operation will provide all the seals for the new Chrysler van and the Ford light pick-up truck under five and six-year contracts.

The polymer business had experienced weak demand and falling prices after the buoyant end to 1994 and early part of 1995, he said. "It is a cyclical commodity business and not one of our core manufacturing groups ... not one of the ones we see as building blocks for the future." He refused to be drawn on whether it would be divested as part of the strategic review currently under way.

Analysts trimmed full-year forecasts from around pounds 1.45bn to between pounds 1.39bn and pounds 1.41bn. BTR said that Polymer Taiwan's operating profit fell pounds 25m in the four months to April from a year earlier.