Takeover talks at troubled vehicle bodies group Airflow Streamlines ended last week without a bid. The failure caused the company’s shares to fall 4p to 165p.
The talks followed a mid-May announcement by Airflow that it had received an unsolicited approach from a mystery third party.
Shares jumped at the time but have since fallen back after poor annual results and a recent profits warning. The shares are now 20p adrift of their high before the warning.
In a statement issued after its annual shareholders’ meeting, Airflow admitted the past two years had been challenging.
‘The scale of the changes made in relocating the body engineering division and reorganising the production division have been significant,’ it said. ‘These changes followed the extra costs and production difficulties of handling major new model introductions for international clients.’
It added: ‘These have involved a substantial capital commitment to the future of the group in order to secure these long-term manufacturing programmes in the production division. The relocation of body engineering to bespoke premises will enable it to continue to develop its world-class services.’
Airflow, based in Northampton, blamed its recent profits warning on a combination of bad weather which caused a flood at its Northampton facilities, and the financial problems at Matbro, a big customer of the company’s Whiteleys division.
Matbro, formerly a subsidiary of Northern Ireland engineer Powerscreen, was at the centre of allegations of accounting irregularities at the group.
Restructuring at the Whiteleys division will hit profits again this year. Market expectations of a £3.8m profit this year would not be met, the company said.
But finance director Mike Shiel said profits were still expected to be ahead of the underlying figure achieved last year.