Alumasc enjoys strong H2 as profits rise 140%

MIDLANDS-based building and engineering products group Alumasc, which has large operations in Shropshire and Staffordshire, has seen a rise in half year revenue and profits compared with 2011.

For the six months ending December 31, 2012, group revenues increased by 10% to £59.5m, while underlying pre-tax profit jumped 140% from £1m to £2.3m.

The firm said the huge rise in profits reflected a strong performance by the group’s Building Products businesses and progress in a recovery plan at Alumasc Precision.

Building Products operating profit increased 135% to £4m, with revenue up 27% to £44.7m, outperforming the UK construction market. The group said the operation had benefited from the first phase of the £11m contract for the Kitimat smelter in Canada; buoyant demand for Community Energy Savings Programme projects in the UK and improved results across the rest of the division.

However, it added that things remained in the green roof market and as a result, Blackdown Greenroofs was restructured resulting in a £0.6m non-recurring, non-cash impairment charge.  

Alumasc Precision Components reduced operating losses compared with H2 last financial year, and achieved break-even results on a run rate basis in the autumn.  This was despite revenues falling by 22% to £15.2m, following de-stocking by European OEM customers. Dyson Diecasting continues to trade strongly, it added.

Net debt fell by £4.8m to £8.4m at the end of the period (H1 2012: £13.2m), reflecting increased profits and £3m of advance payments on contracts.  Part of the net debt reduction is expected to reverse in the second half as some advance payments unwind and capital spend increases.

The group’s interim dividend increased to 2p (2011: 1p) in line with the board’s stated intention to restore meaningful dividend payments once cover is achieved from underlying earnings.

Paul Hooper, Alumasc chief executive, said: “Despite the short-term fall in customer demand at Alumasc Precision, the board believes that, in view of the result for the first half and strong momentum in the Building Products division, the group remains on track to deliver previous expectations for underlying results for the full year.”