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24 Oct 2008 12:00
24 October 2008
The 600 Group PLC ("600 Group" or the "Company")
CHAIRMAN'S STATEMENT TO THE 2008 AGM
At the AGM of the Company held at midday today, Martin Temple, Chairman of 600 Group, made the following statement:
Order intake activity over the first half of the year continued at a similar overall level to last year with our Continental European and South African markets offsetting the relative softness in the UK and North America. Overall sales in the first half of the current year were at a similar level to the first half of last year, although this prior period included the benefit of a £4.5 million contract with a major aerospace company. Our outstanding order book, after adjusting for the impact of this major contract, is marginally lower than at this point last year.
Despite the challenging market, our operating margins over the first half remained in line with our expectations, with increases in raw material prices being offset by selling price increases and strict cost controls.
The Company has completed the previously highlighted programme of 70 redundancies at a total cost of £0.9 million. This exercise included the closure of our sales operations in the Czech Republic, Singapore and Malaysia, at a cost of £0.3 million. Sales activity in these areas has been transferred to other 600 Group facilities.
As anticipated, net cash balances reduced during the year to date, in part due to supply chain issues relating principally to an increased inventory of machines and components from China. This issue has subsequently been addressed and controls in this area have been tightened.
Whilst we are continuing to invest in sales, distribution, product design and development, we are mindful that demand for our products will be impacted by the current global financial and economic conditions and opportunities for further cost savings and working capital improvements will be strong areas of focus during the second half.
On 6 August 2008, the Company announced the appointment of David Norman as Group Chief Executive. David has extensive experience of managing international manufacturing operations and the Board believes that his appointment will greatly assist in the implementation of its strategy and in the maximisation of shareholder value. Since his appointment, David has conducted a full review of the Company's operations and will be implementing the detailed findings from this review over the coming months.
The 600 Group is not dependent upon any particular territory, but it cannot be fully insulated from the global economic uncertainties which will impact future demand within the engineering industry as a whole. Looking forward, we will continue to implement the Company's strategy in all its major markets whilst at the same time we will achieve operational efficiencies and improvements to customer service so that we remain well placed to retain market share.
The Company expects to announce its results for the six month period to 28 September 2008 in mid-November and will give a further update on trading at that time.
Enquiries:
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The 600 Group PLC |
Telephone: 0113 277 6100 |
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David Norman, Group Chief Executive |
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Martyn Wakeman, Group Finance Director |
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Hudson Sandler |
Telephone: 020 7796 4133 |
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Wendy Baker |
Notes to Editors:
The 600 Group PLC is an international group, manufacturing and marketing machine tools, machine tool accessories, lasers and other engineering products.
The 600 Group operates from some 35 locations worldwide and sells its products around the world. Its international marketing and distribution network handles both 600 Group products and those of other manufacturers.
Website: www. 600group.com
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