TI builds up its warchest

Engineering group has up to £500m to spend on expanding by acquisition

TI Group, the British engineering giant, has a war chest of £300m-500m for bolt-on acquisitions over the next 12 months, with the first deals expected to be announced later this year.

Chairman Sir Christopher Lewinton said the additions will come within the established TI divisions. ‘There are no plans to add a so-called fourth leg to this business,’ he said.

TI reported interim profits up 8% to £112m after exceptional items, despite facing costs of £7.6m from exchange rate movements. Margins were up across the group.

Lewinton played down the effect of the high pound on TI’s results, since 80% of group sales are made in the country of origin.

‘We are not an exporter, we are a global company,’ he said.

Landing gear and aerospace systems specialist Dowty recorded a 23% boost in organic sales – adjusted for the effect of the higher value of the pound when measuring overseas transactions.

Operating profit at Dowty Aerospace surged 97% to £22.5m, benefiting from an increase in civil aerospace deliveries and aero-engine production during the first half of this year.

Bundy Group, which makes fluid carrying systems for vehicles and refrigerators, saw sales grow by 8%, while John Crane Group, which manufactures specialist seals and polymers, advanced only 2% in what Lewinton described as ‘challenging’ market conditions.

Total sales, including the group’s share of the Messier-Dowty joint venture, were £932.6m, up 4%. However, the adverse translation impact of exchange rate movements reduced this figure by around £70m compared with last year.