600 Group hopeful despite costs of offshoring hitting profitability
OFFSHORING and structural changes at manufacturer 600 Group are helping to reduce costs but profits are down at the Kirklees business.
Profits dipped to £1.01m for the year to 2 April 2016, down from £3.68m the year before. Revenue however increased to £45.3m from £43.8m in 2015.
Over 60% of its activities are now conducted in the UK according to the Heckmondwike manufacturer and it continued its offshoring project with the sale of a Hertfordshire site for £2m.
The integration of the its Electrolux business which was based there and its US laser business TYKMA which it acquired earlier this year reduced the overall cost base “significantly.”
It said that although much of its business was now conducted in the US, 13% of group sales were to EU countries a market which says is “very fragile.”
The 600 Group said it was “firmly focused” on developing new markets outside of this area – particularly in South East Asia.
In February the group’s shares dropped dramatically as it issued a profit warning and complained of lack of visibility for future sales.
Paul Dupee, executive chairman of The 600 Group PLC said: “Despite the difficult trading environment which we have experienced this past year we have taken the necessary actions to maintain if not improve the performance of the operating subsidiaries in the USA and UK as well as improve the financial strength of the company.
“We maintain a strong market position thanks to our industry recognised brands and are taking active steps to increase our worldwide distribution network to accelerate revenue growth. This we expect, coupled with the reduction in overheads, will yield better margins on increased sales in the future.”
