BRITISH engineering firm, Tomkins, said yesterday that first quarter profits were up, following a strong sales performance in its industrial and automotive business.
The higher volumes, coupled with the benefits from its restructuring initiatives, have resulted in double-digit margins in the first quarter, the firm said.
The firm expects the first half to remain strong, but it was uncertain about continuing this momentum in the second half.
Tomkins also predicted continued weakness in the North American construction markets.
James Nicol, chief executive officer, said: “The group continued to show encouraging improvement in both sales and adjusted operating profit in the first quarter compared to the fourth quarter of 2009. Increased volumes were driven by greater than anticipated demand throughout our global industrial and automotive end markets, as well as some restocking.”
Analysts said they expected the company to announce an earnings upgrade on the back of the results.
“Tomkins is well positioned for further leverage off higher volumes as the recovery takes shape,” said analyst Nick Webster of Numis Securities, which upgraded the company’s stock to “buy”.
The firm made heavy job cuts last year, as the car markets were hit hard by the credit crunch.