600 Group PLC Trading Update (2617P)
February 17 2016 - 2:00AM
UK Regulatory
TIDMSIXH
RNS Number : 2617P
600 Group PLC
17 February 2016
17 February 2016
The 600 Group Plc
Trading update
The 600 Group PLC ("the Group"), the AIM listed distributor,
designer and manufacturer of industrial products (AIM: SIXH), today
provides a trading update.
As was reported at the beginning of December in our interim
results for the six months ended 26 September 2015, market
conditions were difficult and customer confidence to commit to
purchases was a concern. These adverse conditions have continued
into this year and the weakness we experienced in the European
markets is now also being encountered in the USA market,
principally in the machine tools division.
The latest Oxford Economics Global Machine Tool Outlook Survey's
figures for machine tool consumption for the year to December 2015
showed Europe negative by 18.8% with the USA flat. Whilst the
forecast for both was modest growth for the coming year at 4.6% and
2.6% respectively other trade bodies and commentators are reporting
more negative figures and we have seen continued weakness within
Europe and the UK and a marked fall in confidence in the USA.
Figures recently released for machine tool orders from the AMT
(Association for Manufacturing Technology) in the USA recoded a
negative 17.5% for the year to end December 2015. With general
economic and in particular manufacturing forecasts being weak,
customers are leaving purchasing decisions until the last minute
and consequently order books overall are at a little over one month
and visibility of future trading is difficult to predict and
subject to monthly fluctuations.
Both of our Divisions have taken steps to reduce overheads and
improve factory efficiencies from which we will see annual saving
of approximately GBP1m going forward. In addition, the benefits
from the integration of the TYKMA and Electrox laser businesses are
now producing improved margins.
The sales and marketing initiatives in both Divisions are
gradually showing signs of success despite the poor market
conditions. However, these improvements and the restructuring
benefits are unlikely to offset the effects of the volume decline
from the market weakness in the machine tool industry.
As a consequence of the above factors the Group's results are
expected to be below current market estimates.
The Board remains optimistic that the process which has begun to
leverage our industry recognised brands such as Colchester,
Harrison, Clausing, TYKMA and Electrox through an increased
worldwide distribution network will lead to revenue growth and that
the actions taken to reduce overheads and become more efficient
will yield better margins on increasing sales in the future.
Enquiries:
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The 600 Group PLC Tel: 01924 415000
------------------------------ ---------------------------
Paul Dupee, Executive
Chairman
------------------------------ ---------------------------
Neil Carrick, Finance
Director
------------------------------ ---------------------------
Spark Advisory Partners Tel: 020 3368 3553
Limited (NOMAD)
------------------------------ ---------------------------
Sean Wyndham-Quin/ Miriam
Greenwood
------------------------------ ---------------------------
Cadogan PR Limited (Financial Tel: 020 7499 5002 / 07771
PR) 713608
------------------------------ ---------------------------
Alex Walters
------------------------------ ---------------------------
FinnCap (Broker) Tel: 020 7600 1658
------------------------------ ---------------------------
Tony Quirke/Mia Gardiner
(Sales/Broking)
------------------------------ ---------------------------
More information on the Group can be viewed at:
www.600group.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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