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Vibroplant feels the winter chill

TRADING conditions in the plant hire sector have worsened in recent months, Britains third largest plant hirer, Vibroplant, warned last week.

Finance director Eric Woolley said both prices and volumes had been weaker as the market for hiring plant to the road building and civils sector had got progressively worse.

He said: The winter is always a bad time to judge the market but our sense is that it is worse since September.

The firm has seen a sharper downturn in the South than the North, where it has a stronger market share. It expects no significant upturn before the end of 1996.

Plant hire rates also softened over the winter, and dumper truck prices came under very sharp pressure. There are examples of products going out at suicidal rates, said Mr Wooley.

Vibroplant said the downturn would be reflected in results for the second half up to March, prompting analysts to cut profit forecasts from 4.9 million to 3.6 million. The companys shares fell 11p to 85p.

The warning emerged when Vibroplant posted details of

the proposed sale of its overseas business, American Hi-Lift, to US group Primeco for 31 million, plus 14 million debt.

Chairman Jeremy Pilkington said that Vibroplant was unable to provide the level of financial and management support to maintain and develop its position in both markets. The firm believed consolidation in both the UK and US markets would favour firms with a significant market share.

The sale will leave Vibroplant with 20 million to pursue acquisitions in the UK.

Last November, Vibroplant warned the City that it has seen the civils market fall by 10 per cent as cuts in government spending began to bite. At the same time, the firm had been re-organising sales and services.

Ingersoll Rand, the US plant group which acquired Clark Equipment last year, has reported a 28 per cent rise in net earnings for 1995 to US$270.3 million (1994: 176.7 million). It has won orders worth US$1.7 billion (1.11 billion) in the fourth quarter.