Mayflower on a global roll

Three global contracts under negotiation at Mayflower, the automotive high stepper, signal that strong volumes will continue past the millennium as current schedules work through. Two of the vehicle manufacturers are new customers who are involved in programmes, said to include a new sports car design, a truck, and a body shell. The company gives […]

Three global contracts under negotiation at Mayflower, the automotive high stepper, signal that strong volumes will continue past the millennium as current schedules work through.

Two of the vehicle manufacturers are new customers who are involved in programmes, said to include a new sports car design, a truck, and a body shell. The company gives no details at this stage.

Word of the new programmes emerged when John Simpson, chief executive, presented the 1996 results showing operating profits up 54% at £23.9m with earnings per share ahead 33% at just over 7p. Margins showed a percentage point gain to 8.7%.

The trading profile this year will be dramatically enhanced by the acquisition of the SCSM pressings complex in the US which started to contribute in January.

SCSM is now being merged into the group’s existing US business, Mayflower Vehicle Systems Inc (MVS).

With SCSM, which adds General Motors, Mercedes, and Toyota business to Mayflower, comes the contract for part of the body shell of the new Mercedes sports utility due to start production in May.

Other MVS US jobs include bodies for the new Chrysler Prowler `fun’ car, and cab panels for Ford’s new Aeromax truck.

MVS in the UK will this year complete write-offs on its £28.5m investment in partnering Rover in its production of the MGF sports car. So MVS share of earnings on the venture will all flow through to the bottom line from next year. The only shadow is the growing competition from more recent sports rivals.

A big Mayflower fan is analyst Graham Webster, of stockbroker Merrill Lynch, who forecasts group profits pre-tax this year of £33.5m (£17.9m) after £5m interest on the £50m borrowings.

He expects the MVS businesses in the UK and US (body structure, design, and engineering) each to contribute £15m to the sum.

Webster estimates a £7.5m (against £6m) contribution from Alexander Walker, the UK bus building arm, and £1m from Ribbons, the webbing business.

Mayflower Corporation shares ride close on a 12-month high but Webster reckons them still excellent value. `It’s a sparkling business,’ he said.