LONDON (Alliance News) - Electrical products manufacturer Acal PLC said its sales rose in the first half, with an improved gross margin, though it said its remains cautious about the impact of foreign exchange fluctuations.
The company said its sales were up 18% in the first half to the end of September, though the increase was 30% in constant currencies as it took a hit from the strength of sterling against both the euro and Nordic currencies. Like-for-like sales were up 2.0%, with its gross margin improved and its operating margin now in excess of 5.0%.
Sales in its Design & Manufacturing unit nearly doubled in the half, driven by the acquisitions of Noratel and Foss last year. Both acquisitions performed well, with strong organic growth over their pre-acquisitions levels.
Custom Distribution sales were up in the half, despite softness in the UK market, though sales have stabilised over the course of the first half. The growth was driven by European sales, which exacerbated the currency translation hit the group has taken.
"Although encouraged by some positive European macro indicators, we remain cautious over the effects of any wider economic slowdown and the continuing impact of foreign exchange translation headwinds. There are several acquisition opportunities in the pipeline and we have debt funding resources available," said Acal chief executive Nick Jefferies.
Shares in Acal were down 3.5% to 259.68 pence on Thursday morning.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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