MRX Metalrax Group

RNS Number:3815A
Metalrax Group PLC
27 March 2006


Issued on behalf of Metalrax Group PLC
Date: Monday 27th March 2006
                                                               Embargoed: 7.00am

                               METALRAX GROUP PLC
                          ("Metalrax" or "the Group")

                Metalrax establishes foothold in Eastern Europe

Engineering Specialists, Metalrax has, as part of its on-going strategic review,
identified the need to establish a manufacturing facility in a low cost
territory, to meet both customer expectations and competition from emerging
economies.

The Board of Metalrax is therefore pleased to announce that the Group has
acquired the entire issued share capital of Advanced Handling Limited ("Advanced
Handling") from a number of individual shareholders for a cash consideration of
up to #2.25 million, of which #1.125 million was paid on completion.

Advanced Handling specialises in the design and manufacture of material handling
equipment. It employs 160 people across its operations in Peterborough and
Romania, and its product range complements that of the Engineering Support
Services Division of Metalrax.

In the year ended 31 March 2005, Advanced Handling had a turnover of #2.85
million of which around 33% was exported to over 21 countries and it achieved a
profit before tax of #150,000.

The acquisition of Advanced Handling is of strategic importance as it gives
Metalrax a first-foothold in the emerging Eastern European economy through
Advanced Handlings' subsidiary Hidrosib S.A. ("Hidrosib").

Hidrosib, based in Sibiu, Romania, European Capital of Culture 2007, currently
manufactures hydraulic power packs and valves and operates on a 20-acre freehold
site of which only a small proportion is utilised. The Hidrosib facility will
not only satisfy the Group's objective and meet increasing customer demands but
will also offer other significant competitive opportunities.

It is intended that unutilised assets in the UK will be transferred to Sibiu as
well as certain, as yet unspecified manufacturing lines, where UK production is
already at full to excess production levels. It is currently envisaged that
there will be no implications for the UK workforce in respect of any such
transfer of plant or production.

Richard Arbuthnot, Chief Executive, Metalrax commented:

"The acquisition of Advanced Handling and, in particular Hidrosib, offers an
excellent opportunity to invest into Eastern Europe. Hidrosib has an experienced
team who have a wealth of engineering skills and experience of the region, which
will enable us to establish a position in this emerging market of the future.

"The Romanian operation will benefit from the transfer of specialist machinery
and tooling that will add value to both our existing customer contracts as well
as providing the opportunity to tender for and win new contracts that we have
already identified.

"The Advanced Handling facility in Peterborough provides additional facilities
to support our current high-level of activity at Welland Engineering also based
in Peterborough, which is at full capacity."

The former management team of Advanced Handling will continue to manage the
business on a day to day basis having entered into contractual arrangements with
the Group.

Enquiries:
Richard Arbuthnot, Chief Executive        Fiona Tooley, Director
Bill Kelly, Group Finance Director        Alison Oliver, Account Executive
Metalrax Group PLC                        Citigate Dewe Rogerson
Tel: +44 (0)121 433 3444                  Tel: +44 (0)121 455 8370
E-mail: info@metalraxgroup.co.uk          Mobile: 07785 703523 (FMT)
----------------------------------
www.metalraxgroup.co.uk
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