INTERVIEW-T&N untroubled by margin pressure .
LONDON 1996-08-29
The chairman of British-based components and engineering group T&N Plc said on Thursday the firm remained confident about the general prospects for its operating margins despite pressure from unsettled markets .
In an interview following its first-half results , which included a less optimistic forecast for the second half of this year than it had made in the past , Sir Colin Hope said T&N had taken defensive action to protect it from patchy markets .
Looking at market prospects , he said : " I think our best judgment at this stage is that it will probably bumble along in the rather mixed way it 's been in the first half . "
" It 's very difficult to predict the market ( trend ) this year .
It could be better , or it could be worse , " Hope added , echoing the demand uncertainty across automotive industries .
" You can see anxieties in Germany and France , in particular , beginning to grow and develop .
America , however , is looking a little better , " he said .
Compared with the end of last year , when T&N predicted a sluggish first half and a rebound later in 1996 , Hope said : " I think the difference ( now ) is the first half has not actually been as bad as some felt it was going to be , but equally we 're certainly not predicting a recovery in the second half . "
Against this background , Hope said the group was glad it had rationalised and destocked even though this had pressed margins , which had slipped to 9.5 percent from 11.3 percent a year ago .
" I think the figure of 9.5 percent on the first half , when you consider the fact that we 've been destocking , the fairly mixed customer demand , and the fact that we sold the ( southern African ) mines actually is not bad .
" It does show how easily we should be able to bounce back over 10 percent again , " he added , saying : " We continue to feel very relaxed about our general view that we would average 10 percent profit margins over the cycle . "
" We 've always taken the view that we are the sort of company that 's quite capable of working in difficult circumstances -- we 're rather used to it .
And we feel very confident that we 're doing all the right things , " Hope said .
" When the ( profit ) figures will bounce back up again is just a function of markets recovering just a fraction , " he added .
Commenting on the continued struggle to get control of German piston maker Kolbenschmidt , which has been hampered by regulatory obstacles , Hope said T&N 's confidence " continues to improve " that it may eventually be able to proceed .
-- Andrew Huddart , London Newsroom , +44 171 542 8716