Manufacturer disposes of £2m site in offshoring exercise
MANUFACTURER The 600 Group has sold its Hertfordshire site for £2m to the Kite Packaging Group, as it moves to emphasise its US links.
The Heckmondwike-based business said that the integration of two laser businesses, TYKMA (which it acquired earlier this year) and Electrox meant that manufacturing had been relocated to its purpose-built facility in Ohio.
It’s Hertfordshire site in Letchworth became too big for its purpose, that of the European sales support arm.
Paul Dupee, executive chairman said that this move proved that the 600 Group were not totally dependent on trade and operations within the EU. He said: “Although it is very early to speculate on the effect that leaving the EU may have in the coming years, we would ask shareholders to consider a number of important factors which we believe reduce the risks for the Group associated with this new trading environment.
“60% of the Group’s activity is currently conducted in the USA and these businesses are the main profit drivers of the Group. Furthermore, the dollar income we receive gives us a natural hedge against the majority of our purchases which are in dollars.
“In the last year only 13% of Group sales were to EU countries and we are firmly focused on developing new markets outside of this area particularly in South East Asia.
“Over 15% of our total Group revenues are derived from the supply of spares parts and services and this is not dependent on achieving new sales but simply servicing our existing client base and lastly, the growth of our global industrial laser systems business is largely driven by legislative changes and the requirement for traceability both of which are increasing worldwide irrespective of the situation in the UK.”
In February 2016, the business released a profit warning, launching a £1m cost-saving exercise to combat a slowdown in demand from the US. The precision engineering manufacturer’s share price dropped 30%.
