Brierley Hill-based engineering firm Hampson Industries posted a “disappointing” set of half-yearly results – and revealed it was looking at selling off parts of its business to keep its debt down.
The firm posted pretax profits of £1.3 million for the six months to the end of September, down 91 per cent on the same six months the year before, with net debt of £89 million.
Hampson Industries’ new chief executive Norman Jordan, whose appointment in September was greeted as a positive step by analysts, admitted the six months in question were a difficult period for the firm.
“Obviously it’s disappointing to have to stand up and present the results we’ve presented,” he said.
“But on the other hand if you look at where the business has been – through a very difficult timeframe in the marketplace, a significant number of programme delays outside the control of the company and some other issues that had a dramatic effect on a couple of our businesses – all in all there has been a lot of containment in a situation that could have been dramatically worse.
“But there is the foundation for a lot of improvement that we will start to see take effect in the coming months.”
He added that the next six months would see the firm working through contract issues and bringing in operational improvements, which would improve its outlook.
“I think the future beyond the next six months looks strong,” he said.
The firm also announced it had renegotiated its borrowing covenants to provide increased headroom
And it outlined plans to strengthen its cash position, including potential asset disposals, but Mr Jordan said it was too early to say which parts of the business Hampson would consider selling.
“It is premature for us to publicly announce that but we are moving forward with evaluating our options,” he said.
As well as tough business conditions, the firm has also had the additional headache of an impending court case with the purchasers of Hampson Precision Automotive (HPA), Hampson’s former loss-making automotive subsidiary.
The investors, which include West Midland industrialist David Grove, allege “fraudulent representations” about HPA’s relationship with customers – an accusation which Hampson strongly disputes.
Mr Jordan said the case still looked likely to end up in court.
“It’s still heading in that direction,” he said.