Metalrax engineers second successive year of profit

ENGINEERING and consumer durables group Metalrax has announced improved full year revenues and pre-tax profits despite a tough 12 months for its cookware products division.

The Alvechurch group saw revenue increase to £63m (2010: £60m), while pre-tax profit rose to £2.1m (2010: £1.9m).

It has seen a good start to the current year and has predicted it will meet market expectations for the full year.

The company, which has gone through a tough time in recent years as it sought to restructure its high volume, low margin operations, said it was pleased with the performance; its second consecutive year of profit.

It said 2011 had seen it succeed in both of its goals to achieve profitable revenue growth and a reduction in borrowings.

It said sales growth in 2011 had been good with the Specialist Engineering businesses performing strongly. However, the Consumer Durables business suffered due to weakening demand in the UK retail sector.

Borrowings were reduced as the group generated cash from its operations as well as from sale and leaseback agreements on various properties.

The group has now completed its UK sale and leaseback programme – which included two transactions completed in the first half adding to the two completed in 2010.  The group said the deals had brought significant borrowings reductions although at the expense of increased overheads with the increased building lease costs.

The group has also completed a major refinancing ahead of the expiration of its existing facilities and on improved terms. The new facilities, agreed with Royal Bank of Scotland, provide for £14m over four years. The group said this would give it a solid platform on which to plan further growth over the next few years.

It said that in line with its policy to make dividend payments that are covered 2.0 to 2.5 times by earnings, there would be no dividend payout for 2011.

The company has also welcomed the appointment of new Group Finance Director – and Masters judge – Caroline Green, who took her seat on the board in January this year.

Andrew Walker, Metalrax chairman, said: “The successful refinancing, ahead of schedule, combined with the group’s 2011 performance, provides a firm financial footing and foundations for future growth.  Notwithstanding the global macro-economic conditions, the group’s trading this year has started well and the board expects to meet market expectations for the full year.”

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