Certainly the aerospace division will counter any further slowdown in automotive growth.Profit forecasts for the full year are being held at around pounds 180m, with 12.3p of earnings and a 7p dividend. With the shares up 7p to 199p, Lucas trades on a price/earnings ratio of 16 – an expensive 13 per cent premium to the rest of the market. While yesterday’s figures were the first good set of Lucas results for a long time, that is high enough until a successor is found.. But with European and US vehicle sales showing modest growth in the first two months of 1996, any further fall in truck sales should be offset.Although Lucas showed signs of getting to grips with the aerospace business, divisional profits up from pounds 9m to only pounds 13m were disappointing. But as airlines return to profitability and place more orders with airframe makers, the future looks more rosy. Group profits of pounds 61.6m, against pounds 44.5m, were struck despite a downturn in the key automotive markets, particularly France where output by car makers fell 11 per cent.Even so, the automotive division, accounting for 80 per cent of sales, saw turnover rise from pounds 1bn to pounds 1.2bn, with profits up pounds 8.3m to pounds 65.3m, helped by an increased contribution from Lake Center Industries, the US operation bought at the end of 1994.Of the four automotive operations, only the diesel business suffered a fall in sales, thanks in large part to sharply reduced demand in the US heavy truck market.

Yesterday’s results revealed the improvements being made at the car parts and aerospace group – although there is also still lots to do. But now the architect of recent changes, George Simpson, is leaving with the job half-finished. A cloud has hung over Lucas’s shares for months as rumours of Mr Simpson’s move to GEC gathered steam, and the uncertainty will continue until a replacement is found.
But the reasons for the 38 per cent jump in interim profits, and evidence that recession in the aerospace industry is over, give hope that the improvements will continue beyond Mr Simpson’s departure.Lucas’s trading in the first six months was not without problems, however. The group also benefited from the expansion of funds under management to nearly pounds 4bn, helped in particular by the acquisition of Knight Williams’ client funds of pounds 400m.An earlier S&F purchase, the stockbroker Collins Stewart, enjoyed another outstandingly successful year, according to Mr Solomon.Singer & Friedlander’s shares yesterday closed unchanged at 105p.. Lucas Industries’ shareholders would be forgiven for feeling slightlyshort- changed.

“The consequences of this change are that profits for 1995/96 are likely to be negligible or eliminated completely, although the medium- term effect is expected to be neutral, and thus not affect the value of the business,” Mr Solomon said.Earnings per share including exceptional items rose 29 per cent to 12.33p, and the final divided was raised by 14 per cent to 4p. Instead of writing off the costs of new phone subscribers over a period of three years, S&F is to switch to writing off the costs as they are incurred.S&F said this met changes in accounting standards and would be more in line with the practice of quoted companies which would be required at flotation. Anthony Solomons, chairman, said the company would continue to search for further opportunities. But S&F pointed up the continuing difficulties of the mobile phone market, saying that sales since the beginning of the year at People’s Phone, in which it has a 30 per cent stake, have been disappointing. The phone company had earlier been forced to postpone a planned flotation on the stock market because of the weak numbers.
Although Peoples Phone contributed nearly pounds 4m in consolidated pre-tax profits to S&F last year, the bank warned that in 1996 there could well be a loss because of accounting changes and high promotional expenditure over the Christmas period. The inclusion for the first time of the Swedish stockbroker, Carnegie, contributed over pounds 14m of pre-tax profits to S&F’s 1995 total of pounds 38m. Acquisitions helped power a 55 per cent jump in pre-tax profits at Singer & Friedlander, and the merchant bank yesterday held out the prospect of further purchases.

A meeting is expected in the next week or so.In the absence of a clear consensus, one view is that the actuaries will present their own recommendation, summarise those of industry and the City about what should be done and leave it to the Stock Exchange and the Department of Trade and Industry to make a final choice.The actuaries may try to allay the concerns of employers about the huge sums that would have to be disclosed by suggesting techniques that would smooth out the big variations in capital value.. Advertising, however, will often be in local languages.The London headquarters will act as a network centre producing programmes for all three strands. Mr Roedy also hopes to see a “rainbow” of programming from the regional centres on air in Britain.. Pressure by industry to avoid full disclosure of the capital cost of directors’ pension benefits looks likely to be rebuffed by the professional body representing actuaries.