Change in sales mix hitting Luxfer’s margins

LUXFER, the international materials technology company, based in Salford and listed on the New York Stock Exchange, has reported improved third quarter figures, but profits are still behind last year.

The group, which design and manufactures of high-performance materials, components and gas cylinders to a number of sectors including environmental, healthcare and protection, said trading conditions in Europe continued to be “soft”.

Luxfer Group revenue for the third quarter of 2013 was $118.3m after rare earth chemical surcharges of $1.6m.  Sales were up $8.8m on the third quarter of 2012.

Although growth in its Gas Cylinders revenue fully offset the reduction in Elektron revenue – particularly in Europe-  Elektron’s operating margins are higher, so the weaker sales mix caused a decline in trading profit, which was $14m compared with $16.3m in Q3 2012.

For the nine months to the end of September Luxfer’s results follow a similar course with trading profit of $44.2m compared to $52.4m for 2012, down 15.6% and net revenues up by $12.5m at $357.9m.

Looking ahead the group said despite the US performing much better than Europe, it is confident of further growth.

It said: “The board remains positive about the ability of our businesses to further grow profits as more of our strategic growth projects reach market in 2015-2016 and beyond.

“With approximately $11m of capital expenditure currently being spent on expansion of composite cylinder capacity, and significant development expenditure being made to support several other projects, we believe that we remain on track strategically, even though certain market conditions are currently a drag on earnings.”