SIXH.L Regulatory News (SIXH)

31 Jan 2008 07:01

600 Group PLC31 January 2008 31 January 2008 The 600 Group PLC ("600 Group" or the "Company") Interim Management Statement and Disposal The 600 Group PLC continues to make positive progress in the implementation ofits strategy, which evolved from the strategic review undertaken in 2006. Sales for the three months ended 29 December 2007, the third quarter of itsfinancial year 2007 - 08, increased by 8 per cent to £21m over the comparableperiod in 2006. Added to the results announced in the Interim Report, overallsales for the nine months ended 29 December 2007 increased by 9 per cent to £62m(2006: £57m). After adjustment for the disposal of Erickson Machine Tools Inc.in April 2007 underlying sales increased by 14 per cent. Underlying order intakeincreased by 11 per cent compared to the first nine months of last year, withsubstantial improvements in our UK and North American businesses. 600 Group's machine tool business supplies a wide range of industries, includingaerospace, oil services, medical, general engineering and automotive. Thisbreadth of its customer base has provided the support to maintain the businessesmomentum which, the Board believes, will continue into the next financial year. The development of its relationships with Chinese partners continues to form akey part of 600 Group's strategy in this business. Agreement in principal hasbeen reached with Chinese machine tool partner, The Dalian Machine Tool Group(DMTG), to establish a 50-50 joint venture, based in Germany, to market anddistribute 'Dalian' branded products across the whole of Europe. The finalagreement is expected to be completed over the next few weeks. The operation isnot anticipated to have a material financial impact on 600 Group's results untilthe financial year commencing 29 March 2009. 600 Group has made excellent progress in the development of new products andtechnology platforms within its Electrox laser marking business. As a result,sales of this business are growing strongly year-on-year with particularly goodprogress made in the Group's home UK market. We are implementing our plans forthe next phase of the development of this business including the low costsourcing of components from the Far East. The Company's technologies division is experiencing very high demand andinitiatives are underway to further improve output, production efficiencies andprofitability of this division.The South African operation has maintained the improvement in its performancedespite political and economic pressures in its market. Given the current state of the commercial property market and the strength of600 Group's balance sheet, the Company has, for the time being, decided not toproceed with the sale and leaseback of its Letchworth property. OutlookOur trading outlook remains in line with the Board's expectations. Order intakeacross the Group's major markets, including Europe, North America and SouthAfrica, has remained good and the Board anticipates that overall revenues in thesecond half of the current financial year will be somewhat higher than thoserecorded in the first half. Margins have remained in line with the Board'sexpectations. Additional one-off costs of approximately £300,000, relatingprincipally to the unsolicited approach from Precision Technologies GroupLimited, have been incurred in the second half of the year to date. 600 Group anticipates that its results for the 52-week period ended 29 March2008 will be released in early June 2008. DisposalIn its Interim Report, released on 16 November 2007, the Company announced arestructuring of 600 Group's Canadian operations. On 30 January 2008, theCompany entered into an agreement (the "Agreement") to sell, subject tofulfilment of the conditions in the Agreement, certain of the assets, includingthe land, buildings and inventory, of 600 Group Equipment Limited, its Canadiandistribution operation, to Semcan Inc. Through its Forward Precision Toolsdivision, Semcan specialises in the supply and service of high quality CNCmachine tools for Canadian manufacturers. The consideration for this disposal, which is payable on 31 January 2008, isapproximately C$2.98 million (£1.5 million) and is at least equal to the netasset value of the assets being sold. C$2.38 million (£1.2 million) of theconsideration is payable in cash with the balance of C$0.6 million (£0.3million) in the form of promissory note which can be redeemed for cash on 31January 2009. The net consideration will be used to reduce the debt in theCompany's North American operations. The Company has also entered into an agreement with Forward Precision Tools todistribute its full range of machine tools and accessories in the provinces ofOntario and Quebec. In addition, 600 Group will be opening a new sales office inOntario in early February 2008 which will focus on supporting its 600 Solutionsbusiness. 600 Solutions delivers a broad range of high performance machine toolsto Canada and, in conjunction with Forward Precision Tools, the Board believesthe Company's capability to serve the Canadian market has been strengthened. Exchange rate used: £1 = C$1.99. Enquiries: The 600 Group PLC Telephone: 0113 277 6100Andrew Dick, Group Chief ExecutiveMartyn Wakeman, Group Finance Director Hudson Sandler Telephone: 020 7796 4133Nick LyonWendy Baker Altium Telephone: 020 7484 4040Ben ThorneTim Richardson 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 Group operate from some 30 locations world-wide and sell its products around the world. Its international marketing and distribution network handles both Group products and those of other manufacturers. Website: www.600group.com This information is provided by RNS The company news service from the London Stock Exchange