Vickers faces pressure to shore up defence

Concern in the Square Mile about the future of Vickers’ defence business resurfaced last week after the group announced full year results. Vickers shares closed down 1p at 148p on Friday despite a leap in annual profits on the back of several big disposals, including Rolls-Royce Motor Cars and Cosworth. Analysts said it reflected worries […]

Concern in the Square Mile about the future of Vickers’ defence business resurfaced last week after the group announced full year results.

Vickers shares closed down 1p at 148p on Friday despite a leap in annual profits on the back of several big disposals, including Rolls-Royce Motor Cars and Cosworth.

Analysts said it reflected worries that Vickers had yet to replace the diminishing defence systems order book and was in a weak position to compete against rivals which are consolidating.

Group profits surged from £19.4m to £157m, including a £162m gain from the sales.

Chief executive Baron Paul Buysse insisted the defence business was in good shape.

The City has been worried about Vickers’ defence division since the company lost out in the bid for the MRAV ‘battlefield taxi’ contract last year.

Buysse cited a £1.2bn contract to supply Challenger 2 tanks to Greece as a likely target and said there were several other UK defence contracts to aim for.

Marine propulsion and industrial turbine components make up the other two legs of the Vickers group besides defence.

Vickers’ recent £304m acquisition of Ulstein Holding is expected to make a big difference to its marine division, where profits rose 18% last year.