Eadie Holdings, the power wheelchairs to vehicle fittings concern, should do better under a new board and the leadership of John Kembery as executive chairman, said stockbroker Greig Middleton.
Previously it issued three profit warnings, hazarding a 1996 pre-tax loss of £250,000: in the event, the loss was £1m (profit £2.9m last time) on £36m sales (£34m).
Unabashed, Greig Middleton is sticking with its earlier forecast for 1997 of £1m profits, arguing that last year’s grim result reflected the losses of businesses now gone from the company, and a £1m plant writedown.
The remaining businesses made a profit of £460,000, and the broker has pencilled in profits of £1.5m for 1998.
It cautiously rates the shares as only a speculative hold. Greig Middleton correctly forecast there would be no dividend, and it reckons that at best there will only be token payments this year and next.
Last month Eadie parted company with Mike Green its managing director and Peter Bromwich, the chairman.
The new executive chairman’s view is that many of the company’s problems were due to the absence of a finance director – an omission Kembery intends to remedy.
He has said he wants to create an environment where the remaining businesses can perform, and which allows for `no more unforeseen shocks’. But he warned it will still be more than a year before Eadie can give investors an `acceptable’ return.