CAR SALES SLUMP HITS AXIAL
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• Specialist distribution group Tibbett & Britten has suffered a 22% drop in its share price after it issued a profits warning centred on its car distribution arm, Axial. The news comes lust weeks after T&B announced an 11% rise in overall operating profits for 1994.
It follows a number of operational difficulties at Axial exacerbated by the slump in car sales and overproduction at Ford's UK plants. A spokesman for T&B says the problems include a shortage of storage space and an unfavorable wage agreement with those moving cars that has resulted in massive increases to the cost base.
"Axial, as a result, is effectively running at break-even point," he says.
Industry analysts claim the problems stem from the reduction in rates demanded by Ford following Tolemon and Silcock Express' merger in 1994. Cost savings have failed to materialise leaving Tibbett & Britten with a shortfall in income, they claim.
J Axial contributed a £10.2m operating profit in 1994. Shares in Tibbett & Britten fell 22% to 525p on declaration of the profits warning.