21 February 2020
The 600 Group PLC
The 600 Group PLC ("the Group"), the diversified industrial engineering company (AIM: SIXH), today announces a trading update in respect of the current year (FY 28 March 2020).
In December the Group reported that it had been experiencing certain macro-economic and political uncertainties across its end markets, particularly in the Far East and automotive markets, with order intake for the fourth quarter expected to be significantly below originally predicted levels.
Trading conditions have since become more challenging with the combination of the General Motors strike in USA plants at the end of last year and the suspension of manufacture by Boeing of its 737 MAX in January this year further impacting hundreds of thousands of suppliers across our core industrial markets. Order intake in both Machine Tools and Industrial Laser Systems therefore remains volatile, including two significant projects that have been pushed into the next financial year.
In addition, the Coronavirus is causing disruption to shipping from the Far East. Whilst the Group has no significant volume of sales and little direct sourcing from Mainland China, the effect of delays to deliveries is pushing sales past the end of the March financial year.
Across UK operations, there continues to be good progress with orders up over 100% on the prior year. The Group is also pleased to report that contracts have been exchanged for the sale of the Gamet Colchester site for $0.5m. This sale is part of the Group's rationalisation of the UK operations of its Machine Tools division to reduce operational risk and capital expenditure requirements. Completion is expected in the next few days with the proceeds used to reduce bank debt.
As a result of the market volatility described above and the expected resultant shortfall in revenue against a relatively fixed cost base, the outturn for the full year is now expected to be significantly below the Board's previously revised expectations.
Despite these major headwinds, the Board continues to believe in the long-term fundamentals of the Group, which benefits from a significantly enhanced financial position, and remains optimistic for the future as it continues to pursue its strategy of de-risking and diversifying the business.
The 600 Group PLC
Paul Dupee, Executive Chairman
Neil Carrick, Finance Director
Tel: 01924 415000
Tel: 0207 457 2020
Spark Advisory Partners Limited (NOMAD)
Tel: 020 3368 3553
WH Ireland (Broker)
Tel: 020 7220 1666
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014
About The 600 Group PLC
The 600 Group PLC is a distributor, designer and manufacturer of industrial products with three principle areas of activities:
The business has a strong reputation in the market for metal turning machines. Products range from small conventional machines for education markets, CNC workshop machines and CNC production machines. Selected outsourcing partners support the manufacturing of these machines and they are marketed through the Group's wholly owned international sales organisation and a global distribution network.
Precision Engineered Components
Machine spares are distributed to customers globally to help maintain the installed base of group machines which number in excess of 100,000. Additionally, work holding products are sold via specialist distributors to OEMs, including other machine builders.
Industrial Laser Systems
Industrial laser systems cover laser marking and processing including cutting, drilling, ablation and a host of other niche applications in the marking and micro machining sectors. They require no consumables, can operate on a continuous high speed basis and can be integrated into customers' production lines. The businesses have their own technology and proprietary software. Customer applications are diverse and range from aerospace to medical and pharmaceuticals. The requirement for increased product and component traceability is one of the market drivers.
More information on the Group can be viewed at: www.600group.com
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