Poor US performance hits domnick hunter.
Shares in engineering group domnick hunter dipped almost 6pc yesterday after the Gateshead-based group announced that a recently acquired subsidiary had under-performed.
The filtration and purification specialist told its annual general meeting that trading at California-based PTI Advanced Filtration Inc had been slower than expected in the first three months of the year.
The filtration business was bought last year alongside sister company Sheffield-based PTI Technologies in a pounds 9.8m deal.
By domnick hunter's own admission, PTI Advanced Filtration had been "hugely loss-making" before the Gateshead group made the acquisition last April.
Nonetheless, it was credited with driving up group sales during the first half of 2004 as the PTI business turned over pounds 18.4m and the division reached a break-even point by the end of last year.
However, while the Sheffield side of the business has continued to succeed, first quarter sales in California have been slower than expected.
In addition, domnick hunter said that delivery of new nuclear, biological, chemical filters made in Gateshead for use in tanks made at BAE Systems Land Systems on Newcastle's Scotswood Road had been delayed.
domnick hunter group chief executive, Colin Billiet, denied the trading statement amounted to a profits warning, saying that operations across the group were experiencing underlying growth.
Mr Billiet said: "Maintaining our transparency, we thought it was appropriate to say everything was not all great in the first quarter, but it is only a couple of parts of the business and the underlying picture is very good."
The chief executive blamed over-stocking from a couple of PTI customers for the dip in trade, which he said had now picked up after a sluggish three months.
As for the NBC delivery delay, Mr Billiet said: "It was a first-time build so it was a case of overcoming the things that occur when you do something for the first time and things should run more smoothly from now on." Initial deliveries of the equipment, which protects tanks from nuclear, biological and chemical attack, began earlier this month.
Yesterday's statement represents the first setback domnick hunter has experienced following a year of rapid growth for the group, which employs 1,800 people worldwide, including 800 at its Gateshead headquarters. Turnover last year rose 15.6pc to a record pounds 158.2m, although pre-tax profits increased just 1.3pc to pounds 12.8m after being hit by the weak dollar and the cost of the PTI acquisition.
Mr Billiet said: "Last year we probably got a bit ahead of ourselves as it was going better than we planned. This is a slight hitch, but we think we are OK now."
Shares in domnick hunter closed down 26.5p yesterday at 417p.