Pre-Close Trading Update
Alumasc (ALU:L), the premium building and engineering products group, expects to announce its results for the year to 30 June 2009 in September 2009. Prior to entering its closed period, Alumasc today issues a trading update.
Alumasc expects its underlying trading results for the year to 30 June 2009 to be broadly in line with management’s expectations at the time of our interim management statement in May. During the year, management has responded rapidly to address increasingly challenging market conditions by reducing costs. Actions taken to date are expected to deliver substantial savings of around £6 million on an annualised basis. Non-recurring exceptional restructuring costs associated with these actions have been circa £0.8 million for the year.
These results reflect the continuing strong performance of the group’s sustainable building products activities. Moreover, the Board is increasingly confident in the long term future of Alumasc Precision Components (“APC”), the larger of the group’s two precision engineering businesses, under its new management team led by Warren Roberts, who joined Alumasc in February from Mahle Powertrain Limited. This view is supported by both longer established customers who are increasingly placing new work with APC and new customers who, in several cases, have also been attracted by the strength of the group’s balance sheet. Customer demand since December has been running at a level around 45% down on the prior year, and this has led to an operating loss at APC. In turn, a review of the utilisation of certain assets has been carried out. It is anticipated that it will take some time for demand to recover fully and therefore a decision has been taken to make an exceptional, non-cash, impairment charge at the year end under IAS36. The charge is currently estimated to be in the range £1-2 million.
The group’s cash performance has remained resilient, due to the high level of cash generated by the Building Products division, in particular, and also management’s tight control over capital expenditure and working capital. Net debt at 30 June 2009 was £10.3 million (30 June 2008: £9.4 million). This represents utilisation of only 52% of the group’s committed banking facilities.The Board believes that, with its leading brands and market positions, the continued careful management of cash resources and its strong balance sheet, Alumasc remains well placed to manage through the rest of the recession, benefit from the opportunities that this will bring and emerge a stronger group when economic conditions improve.
The Alumasc Group plc
Paul Hooper (Group Chief Executive) 01536 383821
Andrew Magson (Group Finance Director) 01536 383816
Bankside Consultants Ltd
Charles Ponsonby 0207 367 8851
Rose Oddy 0207 367 8853