US woes dragging down entire Hampson group
CONTINUING problems with its US operations are dragging down the performance of the entire Hampson Industries group, the Black Country aerospace firm said today.
In a trading update, the group said the aerospace sector in general was sluggish and orders within the US had been lower than expected.
“We continue to see opportunities in the marketplace, although the timing of conversion remains difficult to predict,” it said.
In the period since April 1, the group said US operations Coast Composites, Global Tooling Systems and Odyssey Industries had received orders of around £30m on a variety of programmes, the largest related to the B787 and A350 aircraft.
However, it said that is spite of this, the current order book at Odyssey continued to be lower than forecast, which has impacted on revenues and profitability in the business and overall group trading performance.
It said while ongoing operational improvements were being made at both the Odyssey and GTS tooling businesses in relation to cycle time reductions and staff efficiencies, the benefits of these were taking longer to realise than anticipated due to the lower revenues.
In addition, the period saw the completion of a number of lower margin jobs in both businesses.
“As a result, it is expected that the results of Odyssey and GTS for the first half of the year and the full year will be lower than initially forecast,” said the group.
“We anticipate the recovery at GTS to precede that at Odyssey; however we remain confident that the results of our operational improvement actions will provide both these businesses with a firm base from which to achieve improved results in the future.”
In outlook, the group said while there were encouraging signs of growth in certain of its businesses, the volatility the group was experiencing in the aerospace tooling market, particularly at Odyssey, was causing it to face short term revenue, operational and timing challenges.
“Through an ongoing focus on cost reduction, lean management and improvement initiatives, the board is optimistic that progress will be made in the remainder of the financial year.
“The board also believes that the medium and long term prospects remain strong for the group as the use of composites continues to increase in aircraft manufacturing and OEM’s focus on fewer, larger suppliers, like Hampson,” it said.
