BALDWINS Industrial Services, the UK rental company that also owns Phillips Crane Rental in Texas USA, is ready to sell its ‘non-performing’ cranes at a loss in a bid to rescue its damaged finances.
The company has warned that its results for the year to 31 March 2002 will be ‘materially below current market expectations’. Continuing disappointing trading in the UK, increased operating costs in North America and expenses associated with reorganising the group’s debt were blamed for upsetting the company’s financial plans.
The Delta tower crane operation and the Loadtite and M&E Handling Services divisions remain in line with forecasts.
The company said that turnover in the UK crane division had fallen because of ‘a further deterioration of utilisation levels against forecast. Due to the high fixed cost nature of the business, this will lead to a significant reduction of the division’s profitability.’
Turnover in North America is meeting expectation, but direct labour costs are proving higher than expected, the company said.
Baldwins warned that it would also incur substantial losses in the year in relation to a number of one-off items. Baldwins has previously announced that it is reviewing its operations, and that it has taken a £1m ($1.5m) hit from the collapse of Independent Insurance Group plc. ‘Professional fees borne in relation to the reorganisation of the group’s funding arrangements’ plus restructuring costs in both the USA and the UK, have added further costs.
In its statement to the London Stock Exchange, where Baldwins’s shares are publicly traded, the company said that it was ready to sell ‘non-performing’ cranes [which presumably means not performing financially, rather than technically] at a loss as part of the restructuring programme. ‘The scale of the loss will depend upon the number of cranes to be sold, which is still subject to discussion with the group’s funders,’ the statement said.
Net debt at 30 September 2001 was £86.6m and net assets were £38m, a gearing of 228%.
