News

Profit warning batters Acertec

30 July 2008 16:00:00

Acertec has lost half its value after the steel products maker warned 2008 profits are expected to be "substantially" short of expectations due to a legal dispute with a supplier.

Its BRC UK business has had a disappointing first half following disruption to planned supply from one of its major suppliers of rebar, who Acertec claims has failed to honour fixed price sales contracts.

The UK firm is talking legal action, but has been forced to satisfy its rebar requirements by purchasing expensive steel in the market.

Meanwhile, a review by finance boss Jonathan Cook and chief executive David Hussey has resulted in the first half numbers reflecting several one-off provisions.

Acertec has also stopped funding a 50:50 joint venture with Gestamp Automocion and handed over majority control to the French firm.

In addition, initial indications are that the deficit on the group's closed defined-benefit pension schemes has increased significantly since the end of 2007.

It blamed the situation on a decline in value of the quoted investments held by the schemes and to a reassessment of the underlying assumptions relating to mortality.

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