Umeco looks to composites for growth after disposal
COMPOSITES group Umeco said today the successful sale of its supply chain business would enable the group to focus on its core business.
The company announced on Friday that the £145m deal to dispose of its Pattonair supply chain business had been concluded. As a result of the sale, the company is now entirely focused on advanced composites.
In a trading update today, the group said: “The sale of our supply chain business has enabled the company to focus its resources on its composites business, which the board considers has attractive long term growth prospects.”
In the update, which covers the period April to August 1, Umeco said it had made a satisfactory start to the year. Revenue from continuing operations was 12.7% higher than the same period last year.
Its Structural Materials operation grew its revenues by 18.2%, of which 10 percentage points is attributable to growth in its lower margin European distribution business. This business enjoyed substantial revenue growth primarily as a result of the expansion into Finland and France during the second half of last year.
Profit growth is being held back compared to the same period last year due to lower margin sales and as a result of investment in new facilities in the US, where dual-running of facilities is being maintained during the current financial year while customer qualifications are obtained for new premises.
Process Materials grew its revenues by 5.2% and compared to the same period last year, the firm said margins have improved reflecting the pricing actions taken over the past year.
Aerospace & defence revenues, which accounted for 32.5% of group revenue in the period, grew by 4.4%. Both Structural Materials and Process Materials benefited from a modest overall increase in revenues despite comparatively little activity on Boeing 787 Dreamliner related products.
The group said it was encouraged by Boeing’s progress towards delivering the first 787 to its launch customer by the end of September and the prospects for production rates increasing later this year.
In the wind energy market, revenues accounted for 11.8% of the group’s total sales. The firms said the 2.6% growth reflected the destocking in its distribution channel ahead of the start up of its joint venture which, later this year, will begin to manufacture vacuum bagging films in China.
Revenues into the recreation and other industrial segment, which accounted for
16.9% and 31.5% of group revenue in the period, grew by 21.9% and 24% respectively. The growth in the group’s other industrial segment was largely due to the expansion of the European distribution business.
In outlook, the group said it expected continuing operations for the six months to September 30, 2011 to reflect the growth rates experienced in the first quarter.
“Margins, and therefore profit, in the six months will however reflect the expansion of our lower margin distribution business and the investment being made to expand our manufacturing capacity.
“Umeco continues to trade in line with the board’s expectations for the year to March 31, 2012,” it said.
