On-target earnings at TI Group last week buoyed engineering shares after a recent downward run.
The company reported an 11% rise in pre-tax profits for the first half of 1998 to £125m, in line with expectations. Turnover rose from £854m to £940m.
TI shares picked up 46p to 442p in the wake of the results. One observer said that margin pressures at mechanical seals unit John Crane and fluid power subsidiary Bundy appeared to have eased.
‘There were no nasty surprises in the figures,’ he said. ‘The slowdown in Brazil and Asia seems to have had a limited impact.’
The results came just days after TI settled a US ‘whistleblower’ lawsuit by a former employee who alleged overcharging by TI subsidiary Dowty Woodville Polymer on government contracts.
TI is to pay the USGovernment £9m, but maintains that there was no ‘material substance’ to the employee’s claim.
SG Securities said it was keeping its full-year forecast for 1998 and 1999 at £243m and £265m respectively, but was now a buyer of stock.