Thursday 12 January 2012
THE ALUMASC GROUP PLC - TRADING UPDATE
Alumasc (ALU.L) is issuing a half year trading update in respect of its financial year ending 30 June 2012.
Group revenues of around £54 million for the half year are some 9% ahead of the equivalent period last year1, driven mainly by continued strong growth at Alumasc Precision. Building Products' divisional revenues also remain ahead of prior year comparators, against a background of continued contraction in the UK Building Products market.
However, the group's half-year underlying profit before tax will fall significantly short of the £2.1 million reported a year ago, due to two factors:
· the continued pressure on margins in the Building Products division;
· the significant one-off costs of meeting the higher than expected growth in customer demand at Alumasc Precision.
The full extent of the additional costs at Alumasc Precision only became clear following receipt of the results of the December month end stock count earlier this week. Immediate action has been taken to curtail the excess level of expenditure as we enter the second half of our financial year.
Group net debt at 31 December 2012 increased to £13.5 million, compared with £11.9 million at 31 December 2010, due to investment in working capital to support revenue growth in the intervening period, and the lower than expected half year profit.
The group expects a stronger second half result, underpinned by normal seasonal bias; a significant uplift in the order book in our Facades business driven by demand from the Community Energy Savings Programme; a stronger order book in our roofing business reflecting increased penetration of refurbishment markets; and an improved performance at Alumasc Precision. The group's order books continue to exceed £43 million in total.
In view of all the above, the Board currently believes that its previous profit expectations for the full year are now likely to be at the top of the range of likely outcomes. A further, more detailed, update will be given once our interim results are finalised in February.
On a more positive note, the medium term prospects for the group continue to be most encouraging, particularly in light of recent developments which include:
· Levolux securing orders for design phases of two multi-million pound projects in London, which will begin to benefit during the next financial year
· Gatic is experiencing a high level of enquiries for international work, and a business development manager has recently been appointed to grow Slotdrain opportunities in the United States
· Blackdown has recently won a significant order to supply a circa £700k green roof for the Scottish Arena in Glasgow
· Alumasc Precision is working on two potentially very significant new projects with major international customers.
Note 1: Revenue growth is measured on a like-for-like basis and excludes prior half year revenues of £2.4 million at Alumasc Dispense, a business sold in April 2011. Alumasc Dispense reported a prior half year operating loss of £57,000.
ENDS
Enquiries:
The Alumasc Group plc
Paul Hooper (Group Chief Executive) Tel: 01536 383821
Andrew Magson (Group Finance Director) Tel: 01536 383844
Bankside Consultants
Simon Bloomfield Tel: 0207 367 8861
This Trading Statement has been drawn up and presented for the purposes of complying with English laws and regulations. Any liability arising out of or in connection with this Trading Statement will also be determined in accordance with English law.
This Trading Statement may contain 'forward-looking statements'. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Many of these risks and uncertainties relate to factors either beyond The Alumasc Group's control or which cannot be estimated precisely, such as future market conditions and the behaviour of the market participants. Actual outcomes and results may therefore differ materially from any outcomes or results expressed or implied by any such forward-looking statements.
Nothing in this Trading Statement is intended to be a profit forecast.
