MG Rover's collapse is " ancient history" for automotive components group Wagon, its finance director said yesterday.
As the Warwick- based manufacturer posted an expected 16 per cent dip in first-half pretax profit, Richard Cotton said Wagon was no longer affected by the car giant's demise.
"We closed our Oxford plant back in May because of the loss of MG Rover, but the automotive industry moves fast and May was a very long time ago for us."
Mr Cotton's comments came as the firm announced the acquisition of German engineering firm FKT and a 16 per cent dip in its first-half profits.
Wagon will pay up to £7.7 million for FKT, which mainly supplies German original equipment manufacturers (OEMs) with automotive sun blinds and storage solutions.
The manufacturer bought FKT for £4 million in cash and up to £3.7 million in Wagon shares over three years. It expects the acquisition to be earnings enhancing in the first full year.
FKT employs 115 people at one facility in Pforring, near Ingolstadt in southern Germany, and in 2004 made £300,000 pretax profit on sales of £6.7 million.
The purchase is part of Wagon's strategy to expand its range of products with a higher engineering content.
"The business is complementary in products and customers to our Bressuire Innovative Solutions business, and will deliver synergies through the broadening of Wagon's customer base - particularly in Germany," the company said.
Wagon also met expectations by announcing a fall in pretax profits to £7.3 million from £8.5 million last year.
Sales slipped to £204.2 million from £220.5 million, reflecting low order intakes in prior years, a drop in revenue following the demise of MG Rover, and the planned reconfiguration of Renault Espace seat rails.
In May Wagon announced the loss of 100 jobs and an additional £2 million of restructuring charges in the wake of MG Rover's demise.
Wagon supplied small assembly parts and steel stampings to Longbridge, accounting for around £14 million of annual sales out of a total of £450.6 million.
However, Mr Cotton said he was pleased with Wagon's 0.1 per cent increase in operating margins to 5.4 per cent. "We're transforming the business and remedying the lower sales volumes we've had in recent years," he said.
"The rise in margin is significant and unusual for a company with reduced sales."
Wagon also announced that Coventry-based susidary Oleo International is planning to start production of its gas and hydraulic cylinders in China, to capture the rapidly growing local market. Production is due to begin in the second quarter of 2006. "We have continued to strengthen the business, through the continual reduction of the cost base, improvements in the operating performance, the acquisition and disposal, and strategic operational developments in Spain, Italy, China and the Czech Republic," the company added.
The company is maintaining its four pence per share interim dividend.