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Widney's shopping plans on the shelf.

Byline: Richard Tyler

Aston engineer Widney has put all acquisition plans on hold until the outcome of a pounds 480,000 claim against the business is known.

The company, which makes window systems for buildings and slide windows for vehicles, was in advanced talks with one company until April.

But Widney had to pull out after receiving a claim from the liquidators of its former defence company Lifeplayer, which initially stood at pounds 2.8 million plus costs and interest.

Finance director Graham Errington said: ``We got about 75 per cent down the road and then this Lifeplayer thing came alive.

``The claim has not really affected Widney UK. Instead it's affected the group board's ability to focus on acquisitions.''

The claim relates to an alleged preferential payment made by Widney Aish, as the company was then known, to Widney during the subsidiary's restructuring in 1995.

A new company was set up and eventually sold last year to its management while the old Widney Aish, now called Lifeplayer, was liquidated.

Since April, Widney has obtained a High Court decision to slash the possible liability to pounds 480,000, with another pounds 120,000 of costs and interest payments.

The company Widney had been courting has now been bought and Mr Errington said Widney would only be out in the market again when it resolved the litigation.

However, he was much more upbeat about Widney's current trading. The company reportedyesterday full year losses narrowing from pounds 3.3 million to pounds 445,000 on improved sales from its remaining businesses.

``It's all very encouraging. Widney UK is a world beating niche engineering business. It's running well and winning a lot of new business. We have got rid of all the businesses we didn't want that were dragging the group down,'' said Mr Errington.

The disposals made the group a pounds 617,000 loss during the year, but the proceeds were used to pay off its bank debt.

``We are exactly where we wanted to be as we are now able to gear up for the right acquisition,'' said Mr Errington.

The company saw a fall off in overseas orders after September -- pounds 2.5 million of its pounds 12.8 million turnover is made from US exports -- but since October the business has secured pounds 1.7 million in new customers within the construction industry.

The company intends to recruit another ten staff to its Aston plant in the New Year to handle work generated from one large new contract.

While the company generated cash this year it still has a small negative reserve and so it cannot pay out dividends.

Some pounds 299,000 of deferred dividend payments are already owed to preference shareholders, whose pounds 1.8 million of shares are also due for redemption.

On top of this the company has a pounds 350,000 deficit in its small pension fund, which it is reducing at pounds 60,000 a year for the next seven years.

But under new accounting rule FRS17, the deficit will have to be provided for against the company's reserves and so ordinary shareholders may have to wait even longer before dividend payments are resumed.

The shares rose 1 /2p at 18p.
COPYRIGHT 2001 Birmingham Post & Mail Ltd
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Copyright 2001 Gale, Cengage Learning. All rights reserved.

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Publication:The Birmingham Post (England)
Date:Dec 21, 2001
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