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600 Group releases Interim Management Statement
Published : February 04, 2010
The 600 Group PLC (“600 Group” or “the Group”), the manufacturer and distributor of precision engineering products to international markets, announces its Interim Management Statement for the period from 27 September 2009 to 25 January 2010 (“the Period”).
Whilst conditions in certain of the Group’s markets remained difficult during the Period, positive signs of recovery continued within our machine tools and laser markets, particularly in North America, and this was reflected in our trading performance. Order intake levels for the 14 weeks ended 2 January 2010 increased by 20% and underlying revenue was 25% higher when compared to the previous quarter. Our forward order book for these markets remains stable and we expect order intake to remain at these levels for the remainder of the current financial year. Overall gross margin improved to 33% and the overhead cost savings anticipated under the board’s turnaround strategy have been achieved. These factors have enabled the Group to generate a positive EBITDA for the Period.
Net borrowings at the end of the Period remained at a similar level to the half-year end. Overall borrowing facilities currently total £6.5m and the board believes that this is sufficient for the Group’s ongoing operational needs. Net working capital levels continued to reduce during the Period and the board is actively seeking further opportunities to continue this improvement.
As previously reported, the board is now focused on further strengthening the Group’s supply chain and developing its manufacturing footprint in order to increase capacity and reduce lead times. The product range has been improved during the current financial year and has been focused on higher margin lines such that the improvement in gross margin can be sustained. The remaining actions in our cost reduction programme, relating to the consolidation of our European sales, finance and manufacturing activities, will be completed by 27 March 2010.
The Group’s performance during the Period was in line with the board’s expectations and, following the implementation of the cost reduction strategy and increase in EBITDA, the Group is well positioned to benefit from any further improvement in trading conditions.
