HAMP.L Regulatory News (HAMP)

5 Apr 2005 07:02

Hampson Industries PLC05 April 2005 Hampson Industries PLC Trading Update Hampson Industries PLC, the international aerospace and precision engineeringgroup, is issuing the following trading update prior to entering its closeperiod for the year ended 31 March 2005. Trading for the group as a whole has been in line with expectations during thesecond half, with the period having seen continued recovery of demand in theglobal civil aerospace markets, and continuing strong demand in automotive. The commencement of previously announced new contracts in the group's AerospaceMachining division has contributed to slightly higher than expected sales andunderpins the Board's confidence of continued recovery in this division goingforward. The Board also remains optimistic of further new contract gains in2005/06. Certification work for the revolutionary Eclipse 500 very light jet programmecontinues on schedule with the aircraft having successfully flown for the firsttime with its new Pratt & Whitney Canada engines. The group's AerospaceFabrications & Assemblies division successfully developed, manufactured andassembled the first seven pre-production complete empennage structures duringthe period just ended and investment is now being planned in state-of-the-artfacilities and equipment in anticipation of achieving programme productionreadiness, later in 2005/06. The integration of Texstars Inc has proceeded well and the newly formedTransparencies, Composites and Plastics division is meeting its pre-acquisitionfinancial performance expectations. Subsequent to completion of theacquisition, Texstars received its first production orders for armouredtransparencies to be supplied to United Defence for fitment to the US ArmyBradley fighting vehicle. This marks the successful penetration of the growingmarket for anti-ballistic protective equipment for ground-based defence forces. Demand for turbo charger and fuel injection components and assembliesmanufactured by the group's Precision Automotive division continues at anunprecedented high level. The restructuring actions indicated at the half yearstage to address production capacity and efficiency issues associated with thishigher demand have been largely completed and the resulting costs absorbed inthe period. The Board confidently expects a return to normal operating marginsand the benefit from further sales growth in 2005/06. Progress in establishing the new greenfield manufacturing facility in Bangalorehas continued in the period. After careful study, a site has been identifiedand agreements have been reached to purchase 14 acres of land which will provideroom for significant capacity expansion on a modular basis going forward. Theconstruction phase is expected to commence shortly and stock building to supportproduction transfer is well advanced. In the meantime, the group's principalcustomers continue to be highly supportive of the group's integrated low costmanufacturing strategy. The Precision Industrial division has experienced continued softness in demandfor glass container manufacturing equipment due to destocking activities byseveral major customers. A number of initiatives are under way to improveoperating performance in the current market conditions. The recent rise in the group's share price has exceeded the performancecondition within a conditional award under the Long Term Incentive Plan, whichwill require the establishment of a provision in the financial statements forthe year ending 31 March 2005, estimated to be £0.3 million. Furtherconditional awards under the group's LTIP with revised performance conditionswill be separately announced. Excluding the LTIP provision, profits beforegoodwill amortisation and exceptional items are expected to be in line withexpectations. In summary, a number of key strategic actions have been completed in the period,including the successful acquisition and integration of Texstars Inc and thereturn of the group to growth, supported by two major fundraisings. Theprogress that has been achieved, the improved competitiveness now in place andthe opportunities being targeted, continue to provide the Board with confidencesurrounding prospects for 2005/06 and beyond. Preliminary results for the year ended 31 March 2005 will be published on 7 June2005. For further information, please contact:- Kim Ward - Chief Executive 01384 472941Howard Kimberley - Finance Director 01384 472946 Hampson Industries PLCBrierley HillWest Midlandswww.hampson-industries.plc.uk This information is provided by RNS The company news service from the London Stock Exchange