600 Group slumps as it warns on full year results

600 Group, the AIM-listed distributor, designer and manufacturer of industrial products, said it expects full year results to be below market views amid ongoing weakness in European markets and tough trading in the US.

The company said the difficult market conditions reported in its interim results have continued into this year, with weakness in the European markets now being encountered in the US also, namely in the machine tools division.

600 said both of its divisions have taken steps to reduce overheads and improve factory efficiencies, from which it will see an annual saving of around £1m going forward.

In addition, the benefits from the integration of the TYKMA and Electrox laser businesses are now producing improved margins.

Meanwhile, the sales and marketing initiatives in both divisions are gradually showing signs of success despite the poor market conditions.

Nevertheless, the company said these improvements and the restructuring benefits are unlikely to offset the effects of the volume decline from weakness in the machine tool industry.

At 1109 GMT, 600 shares were down 25% to 9.85p.