Victor Rice, LucasVarity’s chief executive, has dismissed city speculation that its diesel engine business VarityPerkins and aerospace division will be sold as part of the strategic refocusing of the Anglo-American components and engineering group.
`Neither of the businesses are for sale,’ he told analysts at a presentation of the first full-year results since the merger of Lucas Industries and Varity Corporation last year.
Group operating profits rose 5% over the 12 months to 31 January 1997 from £319m to £336m. Pre-tax profits were £282m from total turnover of £4.6bn.
But speculation continues over the long-term fate of the two divisions. Operating margins at VarityPerkins rose from 8.6% to 9% with operating profits up 7.3% to £59m. Aerospace achieved a 9% rise in operating profits to £49m, with margins increasing from 9.5% to 9.6%.
John Lawson, analyst with Salomon Brothers, said the group’s current love affair with both divisions could be short-lived.
`Two or three years from now Perkins might go should LucasVarity decide to concentrate solely on being a supplier of automotive systems, while aerospace is an entirely different business, with no reason to be wedded to the group,’ he said.