Last checked at 31 Aug 2010 07:00
The Board of Associated British Engineering would like to inform shareholders that after reviewing current trading at our operating subsidiary we wish to advise of the following.
Whilst the marine market generally would suggest that we are in recession, in the first quarter of this financial year British Polar Engines has experienced repair services marginally ahead of last year and sales of spares well ahead of last year. We believe that this high level of sales is the result of customers who need to spend money on the repair of engines in older vessels that are continuing operational duties and in particular to one exceptional and unforeseen order. Some of this extra work is for the offshore oil sector that is going through uncertain times and therefore the future is difficult to predict. Although the high level of sales of spares in this quarter will produce higher profits, this should be treated with some caution as some of these sales relate to older stock and the carrying costs of these do not therefore reflect the current replacement costs. We would currently expect annual sales to exceed last years by around 20%.
It should not be taken that this improvement in sales will impact profitability to the same degree.
D H Brown
Chairman