Cables division sends Delta results lower

DELTA, the cables and engineering group, blamed depressed markets for a 3 per cent fall in pre-tax profits to pounds 53.36m last year.

The company said demand was still patchy but there were early signs of improvement in some sectors.

Its cables division reported the weakest results, with profits down nearly a third to pounds 5.9m on turnover of pounds 293m.

Mike Gill, finance director, said the problem had been a price war led by competitors, and that a small price increase announced last month would not be enough to improve profitability.

Profits also fell in Delta's engineering and circuit protection businesses due to difficult trading on the Continent, especially in construction markets, which account for a large part of the group's sales.

Restructuring in 1992 meant improved results last year for the industrial services arm, which includes businesses such as electric motor repairs and distribution of electrical products to industry.

Mr Gill said: 'Anyone who says he is never going to rationalise again is complacent. We will always control costs, but we hope not on the scale of recent years.'

Delta has shed 5,250 jobs during the recession. Katie Still, an analyst at NatWest markets, said: 'Delta has reduced its cost base. If they slimmed any more the bones would show.'

Brokers' forecasts for pre-tax profits in the current year range from pounds 60m to pounds 65m.

Gearing fell to 22 per cent at the end of December, and Delta said it would look for strategic acquisitions in Europe and the US. It also plans to expand in South-east Asia, the one area where demand has been buoyant. The company has developed a new range of products for these markets.

Despite the fall in profits Delta increased the dividend from 14p to 14.5p. The shares, which have outperformed the market since the new year, fell 7p to 522p.