Alumasc accentuates the positives despite European market woes

MIDLANDS-based building and engineering products group Alumasc, which has large operations in Shropshire and Staffordshire, says its perfomance has improved despite tough trading conditions in some markets and sectors. 

In a trading statement issued today ahead of its half year end on December 31, the firm said it expects its interim results, to be announced on February 5, will reflect a significant improvement over the same period in the prior year.

Alumasc said its building products division has had a good first half year overall, buoyed by a combination of strong demand for insulated renders, shipments to the aluminium smelter at Kitimat in Canada, the commencement of work on the large solar shading project at Chiswick Park in London and initial sales of Gatic products to the London Gateway and other projects.

The green roof market, however, has continued to be challenging and the firm’s Blackdown Greenroofs arm is being restructured accordingly.

“This should result in a stronger and more competitive business, but is expected to trigger a partial impairment charge against the carrying value of goodwill of approximately £0.5m to £0.75m,” the firm said.

In the firm’s engineering products division, the business improvement programme at Alumasc Precision Components has already delivered break-even results on a run-rate basis, some months ahead of previous expectations, Alumasc said.

“However, in common with many other industrial suppliers, forecasts for customer demand for the remainder of this financial year, particularly to European end user markets, have been reduced by some 20-30%.

“We believe this reflects a correction to customer over-stocking earlier in the year. APC’s cost base is being adjusted accordingly, whilst retaining key skills and flexibility to benefit from an anticipated market recovery later in the 2013 calendar year.”

The group’s net debt at December 31 is expected to be below the £13.2m reported at June 30.

Alumasc says its order book remains strong overall at £47m, with good order intake for building products offsetting the “softness” at APC.