Alumasc planning to offload engineering products arm

BUILDING and engineering products group Alumasc, which has an operation in Goole, has reported revenues are up by 5% on a year on year basis.

But it has been held back by poor performance in its engineering products division which the group now plans to sell.

In an interim management statement covering the year ending June 30, it said trading to date has been in line with the board’s expectations.

It said group revenues from continuing operations are ahead of prior year to date levels by some 5%, with building products divisional revenues up by 9%.

However, engineering products divisional revenues are lower by 10%.

Alumasc said cash generation remains strong and the group’s overall cash flow performance is in line with its expectations.

It said the building products division continues to benefit from improving market demand, the introduction of new products and steady export market penetration.

“Our roofing and walling businesses, in particular, have had a much better than expected start to the year, building on the positive ongoing momentum in our rainwater, drainage and house building products businesses,” it said.

But in the engineering products division, Alumasc Precision Components (APC) has continued to operate at broadly break-even from lower sales, reflecting the managed exit from loss making work over the last year and cost saving initiatives.

“Recently, we were informed by a European customer that replacement work on a new engine variant will not be awarded to APC and negotiations to settle the final account are on-going,” it said.

“As part of its strategic review announced in September, the board has concluded that APC, which competes in a global market supplying large international OEMs, no longer fits Alumasc’s growth strategy. Therefore we are in the early stages of exploring opportunities to sell the business.

“This strategic decision will enable Alumasc to focus its management and financial resources on accelerating the growth and development of the group’s successful building products activities, with the objective of creating better value for shareholders in the medium term.”