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Wagon sees drop in sales

Wagon, the European automotive parts maker, has revealed that group sales from continuing operations were down 7.5% to £450.6m compared to £486.9m last year.

Operating profit was up 13.4% at £22.8m compared to £20.1m in 2004.

Group profit before tax was up 17.6% at £19.4m and reported loss before tax reached £1.5m, compared to £6.5m in 2004.

Wagon recorded a record order intake during the year, producing £83m compared to £67m in 2004.

Pierre Vareille, group chief executive, says: "These results reflect a very encouraging improvement in Wagon's underlying performance. Underlying margins are well up despite a reduction in turnover; cash flow has been strong and net debt has been significantly reduced.

"It has also been a year of significant strategic and operational progress.

“We have completed some important restructuring programmes, succeeded in passing on most of the steel price increases to our customers, and launched wide-ranging initiatives to improve operational performance.

“The first results of these operational initiatives are very encouraging and will translate into significant savings in the course of the second half of the current year, thereby reducing the impact of the demise of MG Rover on the profit for the year. Our expectation is for flat automotive volumes in Europe. Our sales in the current year will be lower on account of MG Rover, and of losing some work on the Renault Espace later in this year as a result of a customer reconfiguration of the vehicle."

"Most importantly, we have achieved a record level of order intake during the year, which reflects the increased focus on the customer. Though this order intake will extend our resources for the current year, and increase our investment level from last year's low base, this bodes particularly well for Wagon for the future."

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