MACKIE International, the Belfast engineering group with listings on both the Dublin and London stock markets, has warned that growth in the current year will be affected by uncertainty over a major order in China.
Finance director Mr Sean Harte told The Irish Times that Mackie profits would be ahead of last year's £3.3 million sterling "but not by a lot". Brokers have been expecting 1996 profits for Mackie in the order of £3.7 million, but these forecasts may now have to be revised downwards.
Mr Harte said that the Chinese order was worth "several million pounds" and had been delayed because the Bank of China had stopped the contract going ahead. "The Chinese customer still wants the equipment and we need to find a way to get around the problem with the financial authorities," said Mr Harte.
But he added that the order may eventually be rescinded. To compensate for this possible loss, Mackie has brought forward orders from the second half and the first half of 1997, although this had necessitated offering discounts to these customers.
"This order has been replaced with other orders for mills elsewhere, but at lower margins which will impact on the group's performance in the current year," said Mackie executive deputy chairman, Mr Pat Dougan.
The comments on current trading came with an announcement of a £6.68 million sterling rights issue and a series of investments in Belfast, India and Belgium. Mackie shareholders are being offered one new share for every four shares held at 275p sterling, a 10.5 per discount on the 307p market price of the shares.
As was first announced during the visit of US President Bill Clinton to Belfast last year, Mackie is investing £13 million in a new foundry in its Belfast complex on the Springfield Road. The Industrial Development Board is recommending to its board that grants of £4.08 million be paid for this expansion, which will create 160 new jobs. About £3 million from the rights issue will go towards the foundry project, due to be completed in July 1997.
Mackie is also paying £1.1 million in cash to acquire ATC, a Belfast company which manufactures electrical controls and panels. ATC had sales of £4.4 million sterling last year with pre tax profits of £200,000, and has net assets of £589,000.
The Belfast group has also agreed to establish a joint venture with Indian group Himson Textile Engineering. Under the terms of this project, the Indian company will manufacture Mackie equipment under licence for sale in the Indian sub continent, Africa and the Far East.
Mackie has also agreed to pay £2 million for a 17.5 per cent stake in the Belgian company Uniwear, Which manufactures linen spinning equipment. Mr Harte described this as a "tactical investment" and said that Mackie had no plans to increase its stake in the publicly quoted Uniwear.
The investment in Uniwear would provide sales opportunities to linen mills in Europe and would also allow Mackie and Uniwear develop the next generation of dry flax spinning machinery, said Mr Harte.
Mackie chairman, Mr Roger Looker is stepping down after been appointed chief executive of another company. He will be replaced by Mr Dougan, who is currently executive deputy chairman. Mr Looker remains a non executive director but will not seek re election at the next annual general meeting.
