Umeco predicts results in line with expectations
COMPOSITE materials group Umeco has predicted full year results in line with expectations after seeing a robust performance in the four months to January-end.
In a management update, the firm said revenue from continuing operations was 8.7% higher year-on-year.
It said the pick-up was due to increased demand for lighter weight, higher strength materials together with structural factors such as environmental regulation, fuel costs and safety considerations.
Structural Materials grew revenues by 19.8%, benefiting from the Foxhound vehicle (LPPV) contract and the expansion of its distribution business into Finland and France during the second half of last year. In addition to its original order for 200 Foxhound vehicles, the Ministry of Defence has now indicated it will place a follow-on order for a further 100 vehicles.
It said as expected, margins were higher than in the first half of the current financial year, despite the effects of dual running costs associated with the relocation of operations in California.
Process Materials’ revenues reduced by 6.2% as strong demand from the aerospace & defence sector was offset by continued weakness in the Chinese wind energy market, which performed strongly in the comparative period.
“We continue to expect the Chinese market will have begun its recovery by the end of our current financial year and remain confident about the long term prospects of this market,” it said.
Excluding sales to the wind energy market, Process Materials’ revenue increased by 5.2%. Margins were similar to the first half of the current financial year, reflecting a favourable sales mix and continuation of benefits from actions taken to improve pricing.
Aerospace & defence revenues, which accounted for 37.6% of group revenue in the period, grew by 21.6%. Both business streams saw increasing activity from the 787 programme and from development of the A350XWB.
Revenue in the automotive sector grew by 35.8% and represented 8.3% of total revenue, reflecting a number of projects with high end automotive manufacturers.
Revenues into the recreation market were 19.2% of total revenue, and grew by 22.6%. This reflected strong demand in the motorsport, marine and sporting goods sectors.
Other Industrials accounted for 25.3% of total revenue, with revenues to the advanced composite markets growing by 13.7%.
“Overall, our markets continue to evidence the structural growth drivers that are generating increasing demand for our advanced composite materials,” it said.
Andrew Moss, Umeco chief executive, said the business had delivered trading in line with expectations.
“We are focused on our strategy of investing in innovative technology and knowhow, expanding our footprint in emerging markets, and delivering superior levels of service, concentrating on high quality business segments in long term growth markets that command attractive margins.
“While the board is mindful of the current uncertain macroeconomic environment, we remain on track to deliver our expectations for the current financial year,” he said.
