(Alliance News) - Alumasc Group PLC outlined Friday its plans to develop its key blinds and shading brand Levolux, amid expectations of deeper losses than previously forecast at the company's major unit.
Earlier in June, Alumasc explained Levolux - which contributes about a fifth of its total revenue - was expected to report a worse than expected operating loss for the second half of the year. This was amid project delays and margins remaining below expectations in its embryonic balconies business.
Subsequently, Alumasc announced plans to review the "optimal strategy" for the unit.
"Levolux is a business with great future potential, both in the UK and international markets and is one of Alumasc's strongest brands," Alumasc explained in a statement.
"The board will focus the business where it believes it can clearly differentiate and add most value to customers and shareholders," Alumasc added. "This will involve developing the more profitable areas of the business, simplifying operational delivery and reducing risk."
As part of this, Alumasc will combine the Levolux business with its roofing business in a new 'Alumasc Building Envelope' division. This will deliver a "new, collaborative divisional sales approach" which will increase "existing market reach and leverage existing strong customer relationships within the wider group."
Levolux will focus on design and supply activities, instead leaving installation to third-party firms. Currently, the vast majority of Levolux projects also are installed by the firm.
Alumasc will invest further into the North American sales team for Levolux. This will be to accelerate growth at this profitable part of the business which generates around GBP4 million per year in revenue.
"Initiatives to effect these changes will begin immediately and are expected to be largely implemented by the end of the coming financial year," Alumasc explained. "Consequently, the board's expectations for underlying performance in the year to June 2020 are unchanged, although the expectation is that this re-positioning will enhance the prospects for the group in the medium term."
Shares in Alumasc were 2.1% higher at 96.50 pence in London on Friday.
Alumasc Group (ALU)