Trading Update

RNS Number : 2434J
Metalrax Group PLC
01 December 2008

1 December 2008
Trading Update

Metalrax Group PLC (the "Group"), the niche supplier of specialist engineering and consumer durable products, today provides an update
on trading and its outlook for the year ending 31 December 2008.
In our Interim Results announcement issued on 8 September 2008, we reported that we were experiencing increasingly difficult market
conditions, particularly in our prime markets of construction and retail, which are among the sectors worst affected by global credit
problems. Notwithstanding these factors, we anticipated that the outcome for the current financial year would be broadly in line with market
expectations.
Since the end of October the trading environment has deteriorated further as the global economic slowdown has accelerated. This has
impacted a number of the Group's businesses. Those operating in the high volume, low margin automotive sector have been affected by the
downturn in demand seen across the mainstream automotive industry. Within the construction sector, Stackright Building Systems and the
Makespace Mezzanine Floors business have suffered a sharper than expected deterioration in trading over recent weeks and the problems being
experienced across the retail sector have affected the Group's Consumer Durables division.
The weakening of Sterling against the US dollar has also had an impact on those Group companies sourcing materials from dollar
denominated countries. Although the Group has been able to offset a large part of the impact by taking decisive operational measures,
further adverse currency movements since September have limited our ability to mitigate the effects completely.
As a consequence of these factors, we anticipate that our performance for the year ending 31 December 2008 will fall short of our
previous expectations and profits may be slightly below last year's level.
In the face of these more challenging trading conditions, we are focused on accelerating our cost reduction programme across the Group.
Since the beginning of this year we have implemented actions which, by the end of December 2008, will have reduced overall headcount by 27%.
We are currently undertaking a comprehensive review of the individual businesses most affected by the continuing economic turmoil.
Cash flow from operations continues to be positive and we have continued to make good progress in reducing net debt, which has been
consistently lower than budget.
ENDS

For further information:

Metalrax plc 0121 433 3444
Andrew Richardson, Chief Executive
Michael Stock, Group Finance Director

Arden Partners
Chris Fielding 020 7398 1600
Steve Douglas 012 1423 8900

Hogarth Partnership
Andrew Jaques / Rachel Hirst / Anthony Arthur 020 7357 9477

This trading update contains forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties
because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements should be
regarded with caution because of the inherent uncertainties in economic trends and business risks. Other than in accordance with its legal
or regulatory obligations, neither the Group nor anyone acting on its behalf undertakes any obligation to update or revise any
forward-looking statement, whether as a result of new information, future events or otherwise. Nothing in this statement should be construed
as a profit forecast.

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

END

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