Hampson announces new share issue
Black Country-based aerospace company Hampson Industries is to raise almost £60m with a new share issue in order to reduce borrowing and exploit new opportunities for growth.
In an announcement to the Stock Exchange today, the Brierley Hill firm said it planned to raise the capital by issuing 119,012,408 new shares at 50p each.
The firm said the issue is expected to raise £59.5m gross and the money will reduce the group’s net borrowings, provide a more robust funding structure, and enable the group to exploit future opportunities for growth.
The capital raising will be by way of a firm placing and a placing and open offer. It will be fully underwritten by Investec and Lloyds TSB Corporate Markets.
The move is conditional on shareholders approving it at a general meeting on February 18.
Christopher Geoghegan, Non-Executive Chairman, said: “The capital raising will provide Hampson with a solid long-term financial base and the necessary flexibility to exploit opportunities to drive the group’s continuing growth.
“In light of the recent challenging trading environment, we have taken, and continue to take, rapid and decisive actions to reduce the group’s cost base and improve operational efficiency.”
In a separate Interim Management Statement, which covers the period from October 1 last year to the current date, the firm said trading had been satisfactory, with net debt as at December 31 2009 standing at £146.3m.
The results in the period remain below those achieved in the comparable period last year but Hampson’s principal business, aerospace tooling, has continued to see early signs of recovery.
Hampson said the twelve month tooling order book at December 31 had increased by 13% since March and by 25% since August. In addition, at $315m, the level of business in the quotation pipeline remained very strong across a number of commercial, military and general aviation programmes.
The first flight of the Boeing 787 Dreamliner on December 15 following two and a half year delay, is also a boost for the company as it uses a lot of new composite material.
“This marks a crucial programme milestone and its successful outcome is an important technical endorsement of the extensive use of composite materials in critical primary flight structures for large commercial aircraft,” said the group.
The board said it anticipated that with this important programme now entering the more advanced phases of certification, further tooling would be required to support the build-up to planned levels of production throughout the supply chain.
The group’s US-based composite component businesses, Texstars and Composites Horizons, continues to trade in line with expectations, with demand in the military aerospace sector remaining robust.
Efforts to restructure the group’s loss-making UK aerostructures business are ongoing although it continues to impact on the division’s results. This should be protected with the new share capital.
Away from aerospace, the group said its Automotive Turbocharger order book continued to strengthen, in line with the gradual recovery in global automotive markets.
