Revenue and profit declines at Hampson after sluggish H1
AEROSPACE group Hampson Industries has announced half year declines in revenue and profit following a sluggish first six months.
The Black Country-based group, which provides specialist tooling and composite products to the aerospace sector, said revenue fell 8% from £83.3m in the first half of last year to £76.7m, while trading profit declined to £4.3m from £4.5m in the same period.
The group also announced an operating loss of £24.8m, which compared with a surplus of £0.9m this time last year. The pre-tax loss was £31m compared with a £1.9m deficit in the first half of last year.
The decline in revenue was driven by lower sales in the group’s tooling division, in particular at its US-based Odyssey facility, where revenues were nearly 20% lower. On a like-for-like, constant currency basis, the group said total revenue was £1.8m (2%) lower than the previous year.
On a more positive note, group orders from continuing operations increased from £107m to £119m, a rise of 11%, with £53m due for delivery within the next six months.
Norman Jordan, Hampson chief executive, said: “Hampson is positioned to benefit from both the anticipated strong recovery in the civil aerospace cycle and the trend to greater use of composite materials in aircraft.
“In the near term the group has overall order cover or pipeline opportunities adequate to deliver, subject as always to customer scheduling , full year performance consistent with the first half and we continue to focus on further operational and gross margin improvements.”
The group said it had expended much on improving the operating performance of Michigan-based Odyssey, although the priority now was available order cover. It said efficiency and cost reduction measures were bringing the activity into balance and management believed the unit would be operating at breakeven by the end of the fiscal year.
The board said it had also considered it prudent to impair the goodwill associated with the acquisition by an additional £28.3m.
Elsewhere, performance was also mixed, with Composites Horizons Inc. performing well while Texstars Inc. was weaker due to a reduction in US defence orders.
The board is reviewing its strategic options in respect of its Indian operation and BHW in the UK.
The £51.5m disposal of the group’s Shims businesses, which was completed in October, has been used to reduce debt, resulting in improved cash flow. It said with much of the group’s debt facilities expiring in April 2013, a refinancing process was now under way.
Looking ahead, the company said while it was not immune from either macro-economic or industry-specific problems, Hampson was nevertheless positioned to benefit from both the anticipated strong recovery in the civil aerospace cycle and the trend to greater use of composite materials in aircraft.
Chairman John Poulter said that with a primary focus on composites and tooling the group intended to position itself more closely to the aircraft manufacturers and Tier 1 suppliers, who are its key customers.
