Associated British Engineering Continues To Warn On Lower Activity

Tue, 17th Mar 2015 14:34

LONDON (Alliance News) - Associated British Engineering PLC said Tuesday it does not expect an early return to normal trading conditions, as it has seen a further reduction in activity in its last few months and many orders it had anticipated have been downgraded or postponed.

The company said that its trading has remained subdued and is as difficult as it had reported at its interim results last November.

At that time, the engineering firm posted a widened pretax loss for its first half to end September, which it attributed to lower demand from the oil services support industry and further losses from commodities trading and investment company Akoris Trading Ltd, in which it has a 50% stake.

On Tuesday, the company said that the drop in orders is a result of the fall in the oil price, which has hit activity in support operations in the oil sector.

However, the company stressed its operating subsidiary will operate at break-even and remains cash positive. It is exploring new lines of business in this subsidiary and undertaking a detailed review of its sales strategy.

Akoris, on the other hand, has reduced operations and its costs are "now minimal", Associated British Engineering said. "The future for Akoris remains under review," it added.

Shares in Associated British Engineering are untraded Tuesday. It last closed at 115.00 pence.

By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews

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