Silvermines, the engineering and technology group, has plunged into the red. A loss before tax of £730,000 sterling (€1.1 million) was recorded in 1998, contrasting with a profit of £5.57 million (€8.36 million) in 1997. The group, which issued a profit warning in January, had to contend with exceptional costs of £4.3 million (€6.45 million) following the writedown of its investment in Automotive Motion Technology Ltd (AMTL) and reorganisation costs within the security and aerospace divisions.

Silvermines said it was hit in the second half by lower profitability in the aerospace division because of a slowdown in defence orders and the cost of closing its facility in Croydon.

It has a 49 per cent stake in AMTL, which it intends to sell. AMTL failed to perform in line with expectations due to the high level of funding required to develop products for the future, Silvermines said.

Excluding the exceptional costs, and the higher interest costs - up from £400,000 to £1.1 million - Silvermines showed a rise in operating profits, from £4.08 million (€6.12 million) to £4.9 million (€7.35 million), in the continuing operations.

Earnings per share from continuing operations fell from 4.45p (6.68 cents) to 3.25p (4.88 cents).

Sales rose from £88 million (€132 million) to £114 million (€171 million). Despite the losses, an unchanged final dividend of 1p sterling (1.5 cents) has been declared, making a total of 1.50p (2.25 cents), up from 1.45p (2.18 cents). Chairman, Mr Bob Morton said that, although market conditions are challenging, the foundations of the group were solid, and the board was confident of the group's future prospects. The maintenance of the final dividend was an expression of confidence, he told The Irish Times.

He expects a "flat" performance this year, but the second half will be better than the first half. Growth is expected to be resumed next year.

Mr Clem Jansen, who has been group managing director since 1993, is to retire on his 65th birthday on April 26th.

He will be succeeded by Mr Ian Scott-Gall, who has been appointed chief executive. Mr Scott-Gall was formerly group managing director of Blick from 1988 to 1998 "where he was successful in building the group to a peak market value of £160 million in the electronic security and communications sector", according to Silvermines' preliminary statement.

Another change includes the appointment of Davy Stockbrokers as its Irish broking firm, as from May 29th. Davy will replace Riada.