INDUSTRIAL gases group BOC suffered from the Asian economic crisis and the strong pound in its first quarter, and the wounds have since deepened.
Unveiled yesterday, half-year profits to the end of March slumped 17% from #216.4m to #179.8m before tax - the bottom end of market projections.
Chief executive Danny Rosenkranz said the company had begun a ''far-reaching review'' both to optimise the organisation for sales growth and to lower cost significantly.
This will inevitably lead to job losses, but the company is not predicting numbers at this stage. BOC employs 10,000 people in the UK and 30,000 people overseas.
BOC's woes led to a sharp slide in the share price, but it recovered to close 3.5p ahead at 976p.
The shares have under-performed the FTSE-100 by around 20% over the past year as analysts downgraded forecasts in the light of its vulnerability in Asia, where it is the biggest speciality gases producer, and to the strength of sterling.
Stripping out the effects of currency translation, BOC's turnover was up 7% and profit before tax down 12%.
If Ohmeda, the poorly performing US healthcare business which has since been sold for #630m, is also eliminated, the group's turnover was up 8%, operating profit up 1% and pre-tax profits down 3%.
The gases operation, which makes up around 80% of overall sales, saw turnover rise 7% and profits by 4% if the currency translation impact is eliminated from the equation.
The Edwards Vacuum technology business suffered a 15% profits slump on a 11% rise in turnover on the same basis. The distribution services business was also hard hit, with profits down 19% on a 8% rise in turnover.
BOC is still committed to the vacuum side, but it seems likely that the knife will be taken to distribution in one form or another.
BOC has been particularly susceptible to the sustained rise in the value of the pound against the US and Australian dollars, the South African rand and a clutch of Asian currencies.
Turmoil in South-east Asia has also cut demand and new opportunities for business for both BOC Gases and the Edwards Vacuum operation, which supplies superclean environments for semi-conductor and aerospace manufacturers.
Details of the group's proposed review are to be given with the third-quarter results in August.
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