Food industry equipment maker APV, like other capital equipment firms, has fallen out of City favour.
Among the problems spotlighted in the company’s 1996 trading report is the nature of customers’ businesses which makes for an erratic orders pattern.
Last year APV had a poor first half but a good second. But so far this year volume is lower year on year.
A continuing profit improvement programme is aimed at aligning the cost base with likely future volumes of business. APV has spent more than £100m to this end since 1990 – £16m of it last year.
Turnover last year was down 12% at £772m and operating profits by 17.5% at £27.1m before exceptionals which cut the pre-tax figure back to £15m against £26.9m. The dividend was held at 2.7p.
Neil French, chief executive, said that while competition is stiff and market conditions uncertain, the company is now better placed to deliver an improved performance – a message that added a few pence to the share price.
But broker Albert E Sharp said that investors should take the opportunity of any uplift in the price to sell their shares.
Sharp looks for profits this year of £33m, but that is before any restructuring charges.