RNS Number : 1465L
  Metalrax Group PLC
  06 January 2009
   

    
    RNS Announcement
    06 January 2009
    Metalrax Group PLC ("Metalrax" or "the Group")
    Operating companies re-structuring
    Closure of the Stackright Building Systems ("Stackright") and Makespace Mezzanine Floors ("Makespace") businesses and consolidation and
relocation of the Samuel Groves ("Samuel Groves") and RTA ("RTA") businesses
    Metalrax, the niche supplier of specialist engineering and consumer durable products, today announces the closure of its Stackright and
Makespace businesses and consolidation and relocation of the Samuel Groves and RTA businesses.  
    Stackright and Makespace are involved in the manufacture and sale of anti-vandal cabins and of light weight mezzanine flooring systems,
respectively. Both businesses rely heavily on the construction industry, the downturn in which has had a considerable impact on them.
    Following the closures, Metalrax's exposure to the mainstream construction markets will be significantly reduced, which represents a
further step in the Group's strategy to become a specialist engineering company operating in niche market sectors.
    In the year ended 31 December 2008, it is anticipated that Stackright's operating loss before interest and central charges, but after
exceptional costs of approximately �4.0 million, relating primarily to the write-down of property, fixed assets and inventory and �1.3
million of vacant property IFRS lease charges, will be approximately �4.9 million on turnover of �7.4 million. After write-down, the gross
assets of the business (excluding cash) are anticipated to amount, at that date, to approximately �1.6 million.  Stackright employs 93
employees at its facilities in Kirkby, Merseyside and Walsall, West Midlands.
    Over the same period, it is anticipated that Makespace's operating loss before interest and central charges, but after exceptional costs
of �0.3 million, will be approximately �0.5 million on turnover of �1.6 million. After write-down, gross assets of the business (excluding
cash) at that date are expected to be approximately �0.6 million. Makespace employs 15 employees at its facility in Spalding, Lincolnshire.
    These actions will strengthen Metalrax's ongoing financial position by eliminating losses and reducing the calls of non core businesses
on management time. The cash cost of these closures are anticipated to amount to approximately �0.6 million before taking into account the 3
properties. 
    In addition, Metalrax also announces the restructuring of two of its Consumer Durables businesses, Samuel Groves and RTA.
    Samuel Groves, which is involved in the manufacture and sale of professional catering equipment, is closing its factory in Hockley,
Birmingham and relocating to a new facility in Oldbury, West Midlands. The new facility provides purpose built distribution capabilities,
which will enable it to enhance customer service, with smaller, niche manufacturing facilities to support the production of specialist
products. In preparation for this restructuring, Samuel Groves has increased its outsourcing capability and reduced its workforce from 85 to
49 between November and December 2008. The anticipated investment in the new facilities, equipment and information technology is
approximately �0.6 million. As an additional benefit, the consolidation releases a freehold property of approximately 7,500 square metres
which is now being actively marketed for disposal.
    At RTA , a business involved in the manufacture and sale of wine racks and other innovative household products , to achieve the
necessary cost savings and efficiency improvements a consultation process has commenced with its employees on proposals to transfer
administration, accounting, sales & marketing and finished goods warehousing from Great Ryburgh, Norfolk into GW International in Burnley. A
small niche manufacturing operation will remain at Great Ryburgh to focus on the efficient manufacture of wine racks. GW International is
one of the world's largest manufacturers of high quality bakeware and supplies a wide range of other niche consumer durables products to
leading retailers.
    Andrew Richardson, Chief Executive of Metalrax, said:
    "The closure of both Stackright and Makespace is of course disappointing. However, turbulent market conditions, coupled with the decline
of the construction sector in recent months means that the Board has had to make some tough decisions to enable it to focus on the
development of the core businesses within the Group. 
    "The Board firmly believes that the elimination of losses from these businesses will strengthen Metalrax's financial outlook, as well as
moving the Group further towards becoming a market facing specialist engineering Group.
    "The investment and consolidation within the Consumer Durables division will offer cost benefits and lead to substantial improvements in
customer service.
    "These changes, combined with the recently announced disposals of MRX Automotive and Welland Engineering Supplies, in total affecting
six businesses in the Group, simplify operational management and represent significant progress in re-focusing on businesses with strong
growth potential in niche markets."

    -ends-

    For further information:

 Metalrax Group PLC
 Andrew Richardson, Chief Executive  0121 433 3444

 Arden Partners
 Chris Fielding                      020 7398 1600
 Steve Douglas                       0121 423 8900

 Hogarth Partnership                 020 7357 9477
 Rachel Hirst
 Andrew Jaques
 Anthony Arthur


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