Mackie International has said it will strongly defend a £600,000 claim for compensation for loss of office by former chairman, Mr Pat Dougan and former finance director, Mr Sean Harte.

Mr Dougan is claiming £421,000 and Mr Harte £182,000 following their departure from the company after a series of profit warnings and the arrival of new management headed by current chief executive, Mr Sul Sahota.

Full-year results from Mackie were every bit as bad as feared with pre-tax losses of £11.6 million sterling on sales of just £15.6 million. But Mr Sahota has repeated his assertion of earlier this year that the restructuring of Mackie with the proceeds of last year's £5.2 million rights issue and increased banking facilities will mean a return to profits by the end of the year.

The £11.6 million loss includes a £3.6 million exceptional charge relating to stock write-offs, redundancies and environmental contract liabilities as well as costs associated with the relocation of the Rice business to Mackie's premises on the Springfield Road in Belfast. Rice is a foundry business bought last year for £900,000 and is being absorbed into the Mackie foundry operations, which will form the core business of the restructured group. While Mr Sahota repeated his belief that Mackie can return to profitability by the end of the year, the markets remain unconvinced and Mackie shares were unchanged yesterday at 12 1/2p sterling. Analysts said that while the new management team is definitely moving ahead with the restructuring of Mackie, the Belfast group is still walking a financial tightrope.

The group currently has total debts of £16.7 million and, since the end of 1997, has increased the banking facilities it was able to arrange after the completion of the £5.3 million rights issue.