LucasVarity, the automotive and aerospace components group, this week said the high value of the pound wiped £281m off sales during 1997 through currency translations and took £24m off profits.
City speculation that LucasVarity would use its results presentation to announce the start of a buying spree proved unfounded however.
The group reported a modest 1.8% rise in sales to £4.6bn for the year to January 1998. Profits before tax and exceptionals increased over the same period by 16.7%, from £282m to £329m. Pre-tax profit for the full year was £316m.
Aerospace profits rose 53%, including the contribution of the engine controls business bought from Smiths Industries last summer and strong demand from the commercial aerospace industry.
On the automotive side, braking systems showed a 7% rise in underlying profits, with diesel systems, electrical and electronic systems recording almost a 5% rise.
The group has just restructured its £574m of net debt and having cleaned out non-core businesses last year is reportedly ready to spend up to £1bn on acquisitions.
Chief executive Victor Rice remained tight-lipped over what the company had planned for the future.
But he expected strong demand for braking and other automotive systems from the US light truck market to continue. Despite flat overall markets in Europe, he saw the French market growing.
Aerospace sales remain robust, while aftermarket sales are expected to have mixed trading conditions.
All merger-related goals have been achieved, Rice claimed. The group trimmed £43m off costs last year bringing it closer to its £120m cost-cutting target by the end of 1998.
Finance, page 10