600 Group looks to future with fundraising
PRECISION engineering products manufacturer and distributor 600 Group has announced plans to raise £2.5m to help complete the final stages of its turnaround strategy.
The Leeds-based business is to raise the sum, which will total £2m net of expenses, through an advance by shareholder Haddeo and other parties.
The loan will be used to fund the anticipated growth of the group’s machine tools and laser marking businesses; complete the final stages of the company’s turnaround; and increase manufacturing capacity in Europe.
Also revealing its preliminary results, 600 Group, which has operations across the globe, said that in the 53 weeks ended April 3, revenues dipped to £45.4m from £76.2m the previous year.
Loss from operations, before restructuring costs, costs in relation to closed operations, net pension credit and impairment of intangible assets, reduced by half to £1.1m from £2.2m.
Overall loss before tax from continuing operations were £8.7m compared to £8m in 2009.
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David Norman, chief executive of 600 Group, said: “I am pleased to report that the turnaround of the group is almost complete.
“The improvement in orders we experienced in the second half has been sustained post year end and we expect this to continue.
“With the proposed funding in place, the group will develop its manufacturing footprint to increase capacity and, therefore, improve its ability to supply.
“This, combined with the predicted upturn in the machine tools market, leaves us well placed to deliver a significant improvement in performance.”
The group said it returned an operating profit, before exceptionals, in the second half of the year of £600,000 and its gross margin across the year improved to 32%.
600 Group will issue warrants to the lenders as part of the fundraising, granting the lenders subscription rights over 12.5m New Ordinary Shares at an exercise price of 20p per share.
The group is to hold a general meeting on August 27 in Heckmondwike, West Yorkshire, to seek shareholder approval for the fundraising as Haddeo already holds a 28.18% stake in 600 Group.
