LONDON - LucasVarity PLC's failed attempt to relocate to the United States cost the supplier $21.5 million.
The bill, together with other one-time charges, hit the group's net profits for the third quarter. Profits slipped 16 percent from $140.6 million to $117.4 million. Most of the costs came from fees charged by investment bankers and brokers.
Before exceptional items, LucasVarity showed a 26 percent improvement in underlying pretax profits to $150.5 million. But this was at the low end of analysts' expectations.
CEO Victor Rice wanted to move LucasVarity to Buffalo, N.Y., but narrowly failed to win approval from shareholders. Although a majority voted in favor of the proposal, LucasVarity fell short of the necessary 75 percent support by less than 1 percent.
Rice has said that the stock market in the United States is better suited to LucasVarity's plans to buy other companies. LucasVarity is conducting an internal review of its operations. The company has said it wants to concentrate on three core areas: braking systems and related components; diesel engine injection systems; and specialized aerospace products.
The group will announce the review's findings with its full-year results in March.
In the short term, LucasVarity warned that sales in the fourth quarter of 1998 and into this year would be affected by production cuts in the European auto industry. The company also pointed to difficult market conditions in Asia and South America.