INVENSYS, the struggling automation and controls group, said yesterday that it was still on course for recovery, despite posting first-quarter losses of £361 million.
Invensys has been selling assets to reduce its debt after a difficult few years since 1999 when its core customers, telecoms and IT companies, drastically reduced orders.
Underline pre-tax profits from retained businesses were reported at £16 million in the first quarter, down from £17 million last time.
Invensys, which was refinanced in March with a £2.7 billion package of new debt and equity, said that its process systems business, the biggest in the group, showed a strong turnaround with its growth rate recovering to 14 per cent. The operation is benefiting from the restoration of customer confidence in the upstream oil and gas sectors.
In the company’s rail business there are several problems, principally due to the Government’s rail review and the reorganisation of maintenance and renewals at Network Rail. However, the company is confident that the UK market, and rail markets in the US and Spain, will pick up in the near term.
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Analysts at Barclays stockbrokers said that while underlying results were in line, it was disappointing to see the group reporting lower profits than last year in a quarter described by the competition as the best ever.