Dunlop U. K. profit sharply lower

Press, 29 April 1981, Page 23

Dunlop U. K. profit sharply lower

PA London Dunlop, the British tyre and rubber company posted sharply reduced profits and announced that it was severing a 10-year-old link with Italy’s troubled Pirelli tyre company to improve its competitive position. Dunlop said that its pretax profit for 1980 was £IOM compared with £34M the previous year. It blamed the fall on the strength of sterling, which has been propped up by high interest rates, and recession in Britain which reduced demand. The company also announced that it was ending its union with Pirelli under which the two companies held minority interests in

each other’s European operations. The chairman of Dunlop (Mr Campbell Fraser) said that Pirelli’s heavy losses in the early 1970 s meant Dunlop had to provide £41.5M. The advantages of the break were that Pirelli would return £22M to Dunlop. and the British company would recover its minority interests in overseas operations, a company statement said. Mystery buying of Dunlop shares last year prompted a British Government inquiry into speculation that Asian interests were trying to stage a take-over. A Malaysian investment group, Goodyield Plaza, said last November that it owned 17.5 per cent of Dunlop.