In its statement dated 7 November 2005 with regard to the closure of Copal Casting, the Board of Alumasc, the high specification building and engineering products company, commented that it anticipated lower profits from its engineering business in the first half (to 31 December 2005) of the current year than in the equivalent period of the prior year.
While the marketplace for engineering businesses in the UK remains challenging, it is encouraging to report that the introduction of new work at Alumasc Precision, the principal engineering division, to replace work lost on the demise of Rover, is proceeding at an exceptionally fast pace. However, in the short term, such a high turnover in activity is accompanied by high costs associated with new projects prior to their reaching planned volume and productivity levels. While this is encouraging news for the future, short-term profit has suffered as a result.
The group’s building products activities, which contributed 64% to the previous year’s profits, are continuing to grow. In addition to the major contract to supply roofing materials for Alcoa’s new aluminium smelter in Iceland, a number of other contracts have been secured which give confidence for the second half year.
As a consequence of the above, the Board expects group profits for the first half – and hence for the year as a whole – to fall below market expectations based upon estimates made earlier in the year. Prospects for the more important second half, however, remain positive. In these circumstances, and given the strength of the balance sheet, the Board would expect dividends to be held at the level of the previous year. It remains the Board’s intention to grow dividend payments in line with the growth in future earnings.
The Alumasc Group plc 01536-383 844
John McCall (Chairman)
Paul Hooper (Chief Executive)
Bankside Consultants Limited
Charles Ponsonby 020-7367 8851