Aerospace group shares in freefall after it reveals further woes

STRUGGLING aerospace group Hampson Industries has seen the value of its shares fall by more than a quarter after revealing further problems within its tooling operations.

The Black Country-based group issued a notice to shareholders yesterday stating that the ongoing problems were likely to further damage full-year results.

Markets reacted badly to the announcement, with the results shares dipped by more than 27%.The company was already weak due to its announcement last month that the value of its assets had fallen to less than half of its share capital.

The company warned shareholders then there was a serious risk their shares could be rendered worthless. The announcement saw the firm’s share price plummet by more than 84%.

In its latest statement, Hampson said it had concluded a revised business plan as part of a strategic review. However, the report offers little hope to shareholders, warning share values are still at risk.

It stated: “Shareholders should be aware that this plan will reflect worsening trading conditions for the group’s tooling activities, which therefore increases that material risk.
 
“While the group’s tooling businesses remain profitable, the relatively low level of new programme awards, on which this division mainly depends, in conjunction with the perceived uncertainty associated with the group, means that trading in that division is challenging.”
 
It said the tooling division continued to make deliveries against the group’s largest tooling order but there were still issues with this due to problems with the testing and customer approval process. Hampson said it was in talks with the customer’s senior management to try and resolve the issues.
 
Hampson also said the proposed sale of its Wigan-based BHW Components business was no longer being pursued, owing to “significant production rescheduling by a key customer” and the decision by another customer to retain in-house activities which it had originally planned to outsource to BHW.

Hampson said operational changes were being identified at BHW, which supplies firms like GKN, Airbus and Bombardier, to reduce the impact of the unit’s performance on the group.
 
Nevertheless, Hampson added: “The group’s overall results for the current year are expected to be materially impacted by these trading issues.”
 
The board said it would continue to review and assess the strategic options available to it and its formal sale process was ongoing.

In the meantime, it said it remained in talks with its lenders, who were continuing to be supportive while the group explored its strategic options.

The group’s results for the year ended March 31, 2012 are expected to be announced on July 31, 2012.