Thursday, June 15, 2006

Wagon “bullish” despite falling sales

Wagon, the West Midlands-based automotive components group, was bullish about its prospects today despite a tough year.
Sales fell eight per cent to £417.2 million in the 12 months to March 31, down from £455.5 million a year ago.

And underlying pre-tax profits were down to £17 million from £19.7 million in 2005. Warwick-based Wagon, with car part plants across Europe and in China, employs around 500 people.

The firm makesdoor components and bumpers at its Pelsall Road plant in Brownhills.

The group said today the loss of work from MG Rover, following the car firm’s collapse last spring, had resulted in £400,000-worth of redundancy costs as it cut its workforce.

But the firm is expecting major benefits from its £128.4 million takeover of Oxford Automotive, a car body parts manufacturer which shares Wagon customers including Peugeot, Renault, Ford and Daimler Chrysler.

Pierre Vareille, group chief executive, today: “Wagon produced a solid performance in the year, against a backdrop of difficult European automotive markets.

“We expect the current year to be challenging due to the continuing reduced activity of some of our customers.”

But he added: “Wagon is a very different and much stronger business compared with two years ago, and we are justified in looking to the future with confidence.”

Wagon also warned that the Oxford Automotive takeover would result in the sale of five low-tonnage stamping plants, including Tyseley in Birmingham.

Source Express & Star

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