Mayflower slump as US car sales stall

PLUNGING car sales in America have taken the shine off Mayflower's booming bus manufacturing business, dragging down the group's underlying profit by 26% to £50.7m for 2001.

Mayflower, which makes bodies for marques such as Rolls-Royce, Bentley and MG, reported profits from this division were slashed by more than half to £18.3m. But its bus manufacturing operation, which supplies companies such as First Group and Stagecoach, lifted its profit contribution to £36.2m from £31.5m previously. Its order book stands at £160m, 30% higher than a year ago.

Mayflower, which has former Prime Minister John Major as a non-executive director, has seen its share price dive from 136p to 73 1/2p (up 1/2p on the day) in the past six months as demand for new cars in the US has dried up.

A goodwill charge of £86m, most of which stemmed from assets sales and write-downs in its bus joint venture, more than offset exceptional gains of £26.6m. This left a pre-tax loss of £29.2m compared with a £23.2m profit in 2000. The year's dividend has been cut from 4p to 3p.

Chief executive John Simpson also revealed that Mayflower is just weeks away from signing the first contracts for use of its offshore wind farm-installation vessel. The first revenue from this division will be recorded in December, he said, when the £22m vessel is delivered by its Chinese manufacturer, and the business will make a profit in 2003.