Tomkins rules out breaking up engineering group

LONDON (Jan. 17)—Tomkins P.L.C.´s board has decided against a breakup of the global engineering group, which includes the Gates Rubber Co., at least in the short term, according to Chairman David Newlands. "We have concluded that an immediate breakup of the group, either through a disposal of a major business or de-merger, and other corporate finance options are unlikely to maximize value for shareholders in the near term," Newlands said in Tomkins´ first-half results statement. The chairman went on to warn of a second-half deterioration in a number of Tomkins´ markets, particularly in engineered and construction products and the automotive original equipment market in North America. For the period ended Oct. 28, Tomkins reported sales in continuing businesses increased 13 percent to $1.6 billion. The group´s operating profit from those units came in at $156 million, 8 percent ahead of the prior year period. Tomkins´ industrial and automotive division—comprising the Gates Rubber and other rubber-related activities—reported a sales gain of 6 percent for the first six months of fiscal 2001, but operating profit slipped 4.2 percent.