Umeco upbeat as orders rise
AEROSPACE group Umeco said today it was optimistic for the future following an encouraging order intake and better than expected business activity at the Farnborough Air Show.
Nevertheless the company, which provides supply chain services and advanced composite materials, tempered expectations by saying its trading for the six months to September was still likely to mirror the same period last year.
In an interim management statement ahead of its annual general meeting, the group, which has its process materials Aerovac factory at Keighley, said revenue for the period April 1 to today was 3.9% higher than the same period last year, or 3.4% higher in constant currency terms.
Across its divisions, Composites – Structural Materials and Composites – Process Materials both saw increases (based on constant currency revenue growth) of 6.8% and 26.3% respectively. However, this was offset by a 4.3% decline in Supply Chain.
It said the revenue growth in Structural Materials during the quarter reflected improving conditions in the aerospace market. Process Materials benefited from the wind energy market recovering more rapidly than anticipated and from higher demand levels from the civil aerospace sector.
The firm said the small decline in Supply Chain primarily reflected a continuing weakness in the European civil aftermarket, exacerbated by comparison with a strong performance in the same period last year.
Order intake levels continued to recover and the group said its order book at June 30, 2010 was £240.5m, which compares with £219.9m by the same stage last year. It also builds on the picture at the end of March when the figure was £227.4m.
Net debt as of June 30, 2010 was £105.3m, compared to £130.2m at the same stage last year and compared with £79.6m at March 31. The increase since the end of March reflects the group’s usual seasonal phasing of cash flows and an adverse exchange rate movement of £1.6m.
It said continuing management actions to improve working capital ratios were having a positive benefit and it remained comfortable with its net debt outlook and its position in respect of its banking covenants.
Talks with potential investors are also well advanced in respect of the term loan due for repayment in August 2011.
Of Farnborough, the firm said that the orders for 555 civil aircraft announced by Airbus and Boeing were “ahead of expectations” and this bode well for the civil aerospace market.
In outlook, the firm said: “We have been encouraged by the rise in order intake enjoyed in the first quarter, particularly within our Composites operations, and we expect the group’s trading performance for the six months to September 30, 2010 to be broadly consistent with the six months to September 30, 2009.”
Umeco continues to trade in line with the Board’s expectations for the year to 31 March 2011.
