Alumasc warns on profit as Levolux business mired with delays

Alumasc Group warned on Friday that annual underlying profit before tax will be 10-15% below prior expectations following a weaker second half performance at its solar shading and balconies business.

The AIM traded company said it had expected a stronger pick up in revenue from its Levolux business in the second half due to a firm order book, but the subsidiary has continued to experience construction project delays both before and after the placement of customer orders, while margins remain below expectations in the embryonic balconies business.

In response, Alumas has moved change and restructure the management team of Levolux, which makes up for 20% of the group's revenues.

This restructuring is expected to add £1m in savings additional to a further annualised £1m in savings from cost saving efforts that remain on track.

In its 2018 financial year, the company posted underlying pretax profit of £6.5m on revenue of £98.4m, while this year's underlying pretax profit was reported as being 34% lower than the year before at £2.3m in January.

Meanwhile, the company's roofing & water management and housebuilding & ancillaries divisions, which represent approximately 80% of group revenues, are both continuing to grow "well ahead" of the UK construction market and are expected to deliver very encouraging overall year-on-year revenue growth.

The board said it will recommend that the dividend of 7.35p per share is retained for the current financial year, before adding that the company remains well positioned to continue to grow its roofing, water management and housebuilding products businesses over the medium-term, whilst improving performance and value at Levolux.

Alumasc Group's shares were down 2.91% at 100.00p at 1103 BST.