Wagon undergoes strategic review

As the dust settles on the latest boardroom departures from Wagon Industrial, the precision engineer and storage products concern, stockbrokers are encouraged by the firm grip that Nick Brayshaw, the new chief executive, has clearly taken of the company. He is directing a strategic review of the whole business following the recent £33m sale of […]

As the dust settles on the latest boardroom departures from Wagon Industrial, the precision engineer and storage products concern, stockbrokers are encouraged by the firm grip that Nick Brayshaw, the new chief executive, has clearly taken of the company.

He is directing a strategic review of the whole business following the recent £33m sale of the retail interests to Linde AG, with the idea of selecting the most promising businesses to build on.

The former management collected a portfolio of small businesses that failed to integrate into a successful whole, so more disposals could be on the cards.

One area of great potential is automotive. Storage products, which contains the excellent UK Link 51 business, has its weak European performers, something that would not have escaped Brayshaw’s notice.

Wagon has provided a massive £67m in the 1997 accounts against losses, fall in goodwill values, and other contingencies which watchers reckon will fully cover all costs of reestablishing Wagon on a firm footing.

Analyst John Dean of stockbroker Albert E Sharp believes any further downside in the shares is limited, and rates them a buy.

For the current year to March, he expects profits of £20m, against £21.2m pre-exceptionals.