Tomkins beats profits hopes

Engineering firm Tomkins beat profits expectations today after overcoming setbacks such as hurricanes and slumping sales of car giants in the United States.

Engineering firm Tomkins beat profits expectations today after overcoming setbacks such as hurricanes and slumping sales of car giants in the United States.

Tomkins, which makes products ranging from windscreen wiper blades to tyre pressure monitors, said pre-tax profits before restructuring costs rose 11.1% to £83.1m (€121.3m) in the three months to October 1.

This was achieved despite a decline in automotive production in the US, where car giants General Motors and Ford have seen volumes fall by 10.7% and 11.7% respectively in the first nine months of this year.

General Motors – the world’s biggest car maker – announced on Monday that it will cut 30,000 jobs and close nine North American assembly, stamping and powertrain plants by 2008 after absorbing nearly £2.3bn (€3.3bn) in losses so far this year.

Former FTSE 100 firm Tomkins said acquisitions including timing belts maker Mectrol had cushioned the impact of the troubles at its US customers. It was also upbeat about the growth of automotive markets in South America and Asia.

Chief executive James Nicol said: “I am pleased with our overall performance given the adverse impact from the North American automotive original equipment market and the effect of two severe hurricanes in the southern United States.”

Those hurricanes drove up raw material prices that Tomkins was unable to pass on to its customers fully, particularly at its division making windscreen wipers.

Tomkins added that the impact of the storm was still being felt as the North American aftermarket is unlikely to return to normal this year as a number of customers have been unable to reopen their stores in southern states.

Turnover between July and October rose 11.4% to £819.4m (€1.2bn) – faster than the 3.8% growth seen in the first nine months of this year. Shares in Tomkins rose 7% following the update.

Tomkins has restructured extensively in recent years, ditching businesses including gun maker Smith & Wesson and food group Rank Hovis McDougall.

It began life as a buckles and fasteners make in 1925 but now generates annual sales of around £3bn (€4.3bn) and employs nearly 37,000 staff worldwide.

Tomkins announced earlier this month that production at its site in Pontypool, south Wales, making wiper blades would end in the second quarter of next year.

In its building products division, which supplies residential and commercial construction markets with a range of fittings and products, revenues grew 13.8% in the third quarter to £236.2m (€345m) and profits were a quarter higher at £26.6m (€39m).

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