MRX Metalrax Group

RNS Number:5045G
Metalrax Group PLC
29 October 2007


                                                           7am - 29 October 2007



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

                                 Trading update
                                        


Metalrax, the niche worldwide supplier of specialist steel products to the
Automotive, Engineering Support Services and Housewares sectors, today announces
a trading update.


Since the announcement of its interim results on 24th August 2007, Metalrax has
suffered some major setbacks in its Automotive division as follows:


   * At the Smethwick site where the businesses of Bacol Industries, Kenham
    Tools and now Prescott Powell have been amalgamated there has been an
    unexpected drop off in orders, particularly from customers in the US with
    little sign of any replacement new work being gained. In addition, the new
    work that has been won has been at reduced margins resulting in an adverse
    sales mix and a negative effect on profitability;


   * At the Bromsgrove site, where the Belsize acquisition has been
    amalgamated into Bacol Fine Blanking, it has previously been reported that
    major difficulties were being encountered. Although action was taken during
    late summer to resolve these difficulties by increasing selling prices and
    ceasing supply to certain unprofitable customers operational difficulties
    persist and losses have continued.


   * This situation (at Bacol Fine Blanking) has impacted on the smooth
    transfer of work to Romania and consequently has further delayed its
    commencement of profitable operations there since the completion of its
    refurbishment.


Principally as a consequence of the above, the Group's financial performance for
the year ended 31st December 2007 is now likely to be significantly worse than
current market expectations.


Andrew Richardson, the Group's new Chief Executive, who was appointed with
effect from 15th October 2007, has immediately initiated an in-depth review of
the Group's activities. The process is ongoing and will be reported on in due
course, but in any event no later than the year end trading statement due in mid
January 2008. This is likely to result in possible asset write-downs in
underperforming businesses and further restructuring of some of the Group's
activities.


Since 30th June 2007 Metalrax has exchanged contracts for the disposal of three
properties generating cash on completion, to be received by 31st October 2007,
of #5.15 million with an estimated exceptional profit of around #1.8 million
which will be recorded in the second half of the financial year ending 31st
December 2007.


Andrew Richardson, Chief Executive, said:


"It is disappointing to report this downturn in trading in the Automotive
division. We are determined to face up to these problems and the review of
activities is designed both to restore profitability and structure the Group in
its most effective shape to achieve future growth."



Enquiries:


Metalrax Group PLC
Andrew Richardson, Chief Executive     0121 433 3444
Bill Kelly, Group Finance Director     0121 433 3444



Smithfield Consultants Ltd
Reg Hoare/Will Swan                    0207 360 4900




                      This information is provided by RNS
            The company news service from the London Stock Exchange

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