600 Group scraps dividends on uncertain outlook

600 Group said it would not pay a dividend in the current financial year and that its finance chief was leaving because he did not want to take part in a move to Florida.

The industrial engineering company's profit for the year to the end of March fell to $1.1m from $4.1m a year earlier as revenue from continuing operations rose 3.1% to $67.2m. After adjusting items the company swung to a $0.63m loss from a prior-year profit of $4.3m.

The maker of laser systems and precision components proposed no final dividend and said it would not pay a dividend for all of the year ending in March 2021 because of continuing uncertainty. 600 shares fell more than 10% in early trading and were down 4.2% at 10:26 GMT.

"The second half of the year has, unfortunately, been dominated by the downturn in economic conditions, led by the global slowdown in the auto industry, concerns over a trade war between the USA and China and the significant worldwide disruption from the coronavirus pandemic," Chairman Paul Dupee said.

600 said it would expand its US operations by opening an office in Orlando, Florida, because the city is the centre of the photonics, or science of light, industry. The company said it would move management functions there in 2021 but would stay domiciled and listed in the UK.

Chief Financial Officer Neil Carrick is not moving to Orland for personal reasons and is leaving the company. He will be replaced by Mitch Krasny, the former CFO of technology companies Ucell and Kcell. Carrick will hand over to Krasny at the next annual meeting which is scheduled for 31 December at the latest.

"Despite the short-term end-market weaknesses and macroeconomic uncertainty created by the coronavirus pandemic, the board continues to believe in the long-term fundamentals of the group," Dupee said. "Whilst there continues to be reduced activity, the level of order backlog has returned to acceptable levels, given the circumstances, compared to the previous year."