UK - Automotive Precision Sees 01 Pretax Loss

greenspun.com : LUSENET : Y2K discussion group : One Thread

LONDON -(Dow Jones)- Automotive Precision Holdings said the company's results for the year ended 31 December 2001 will show a significant loss before tax, which is expected to be not greater than GBP2.9 million and a loss after tax in the order of GBP2.0 million.

The company has undertaken prompt actions to reduce the workforce by some 50 people.

Although the first half year of 2002 will be difficult, unless there is a weakening of the U.S. dollar, the company expects results for the year to be in line with current market expectations.

A major European customer has suspended deliveries for a period of approximately 7 weeks to the end of April 2002 in order to reduce their stock levels.

This, combined with a reduced level of demand from an important U.S. customer, will adversely affect trading in March and April and the results for the 6 months ended 30 June 2002 .

During the process of finalising the results for the year ended 31 December 2001 it has become clear that the company was in error in its accounting for its foreign exchange transactions and has incurred significant costs in the order of GBP2.5 million resulting from actions taken to protect its foreign exchange position and subsequent revenues during the year.

In addition the company has needed to make a provision of approximately GBP300,000 for monies due to it from a foreign exchange counter-party which has been placed in liquidation.

The year end audit is nearing completion and full year results will be released before the end of April, 2002.

All the foreign exchange costs arising from the company's existing currency positions have now been recognised and that it will therefore benefit from the current favourable exchange rates.

As regards the trading performance in 2001, the company was pleased to see a significant improvement in volumes and profitability in the second half of the year, reversing the first half loss to give a break-even position at the operating level for the full year.

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-- Anonymous, April 20, 2002


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