Improving market conditions boost manufacturer’s profits

Industrial manufacturer 600 Group has reported a rise in revenue and profit on the back of improving market conditions.

Revenues at the Heckmondwike group were up 7% to £24.8m for the six months to the end of September, while profit before tax rose to £2.1m compared to £1.4m in the same period last year.

Order books were up 36% on the same time last year, while 600 Group said its industrial laser division contribution increased to 59% of profits from operations.

Revenues in the group’s North American business grew strongly by 6%, as did those in Australia, up 11%.

It said the UK business, however, failed to make headway against the previous year’s first six months revenue but was up 7% on the second half trading in the year to March 2017, which bore the brunt of the uncertainty following the Brexit vote.

The combination of weaker sales, particularly in the higher margin spares and service activities and higher import prices held the UK operation to break even trading during the period.

A number of operational cost reduction initiatives are taking place led by the new UK managing director, Terry Allison, to improve net margins in the second half of the financial year together with the launch of new products to further stimulate sales growth, the company said.

The group disposed of its entire holding in ProPhotonix, the AIM listed laser diode and LED systems manufacturer and distributor, for £1.5m at the end of August 2017 realising a profit of £1m. The proceeds were used to pay down UK senior debt with HSBC.

Paul Dupee, executive chairman, said: “Market conditions have improved generally over the previous year and both our divisions have been able to increase revenues and have much improved order books.  These factors give us greater confidence going into the second half of our financial year and will be complemented by new product launches and an increasing focus on new sales activity in other geographical areas.

“Whilst there remain a number of uncertain world events beyond our control which could affect our markets, the board continues to believe that the process of leveraging our industry recognised brands such as Colchester, Harrison, Clausing, TYKMA and Electrox through new product developments and an increased worldwide distribution network will lead to continued revenue growth in the future.”

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