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Rockwood shares down
Page 20
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• Shares in Rockwood Holdings slumped by 8p to 10p last week when the freight and distribution group warned that its 1989 results would be "considerably worse than expected".
The group has been forced into a programme of disposals following a disappointing trading performance, particularly in the final quarter of the year, by its Rockwood International Freight division, which was set up in 1988.
Rockwood Holdings chairman Tom Forrest says that higherthan-anticipated reorganisation costs due to acquisitions made last year increased the company's year-end borrowings. "Also the write-off goodwill arising on these and other acquisitions had significantly reduced shareholders' funds," he reports.
He says the poor trading performance had nothing to do with difficult market conditions — "the company just didn't do well in the marketplace."
In order to help recover the situation Forrest says sales worth 26.9m in cash — against a net book value of £2. 7m — have been arranged since the beginning of the year. The company has also agreed to sell its specialist magazine and newspaper distribution subsidiaries, Mercury SDS and Higgs Air Agency, to their managements for <£6m.
The latest news is that it has pulled out of the acquisition of Interfreight, a shipping and freight forwarding business, although it says it has retained the right of first refusal. Forrest says 1990 is already looking better for the group, although he was disappointed about the loss of the company's 25m high-street distribution contract with Courage Take Home Trade to its rival, the John Dee Group (CM 22-28 February 1990).
'rhis followed a rationalisa tion of Rockwood depots and more than 230 redundancies since its acquisition of Lowfield Distribution's general traffic division in September 1989.
The Rockwood directors will announce the company's financial results later this month, together with full details of the disposals programme and comment on current trading and future prospects.