600 Group confident restructuring will enable it to deliver growth
MORE jobs will go and operations close as Britain’s largest toolmaker 600 Group continues its cost-cutting strategy.
The Yorkshire-based group expects to deliver annualised cost savings and other benefits of around £5m as a result of its restructuring exercise including the consolidation of sales, marketing and distribution activities for UK machine tool products at the group’s Halifax operation.
Other cuts will see the firm close single facilities in Germany and South Africa, with similar back office consolidation.
A total of 110 jobs around the group are expected to be lost.
A review of its US operations will see the creation of one new facility to combine all North Amercian business activities in one location.
Last year, the firm announced the loss of 45 jobs in its UK and North American operations on top of the closure of its Leeds headquarters and four sales offices in the US.
In November it announced a £1.6m loss for the 26 weeks ended September 27 compared to a similar pre-tax profit for the same period in 2007.
In an interim management statement today 600 Group said that sales had continued to drop for the period September 28 to January 31 impacting revenues in its UK and North American markets and profitability of its machine tools business.
Group sales, after adjustment for currency movements, dropped 16% compared to the same period last year.
However, the manufacturer remains confident that a full restructuring of the business, centered on the delivery of substantial cost reduction, the elimination of duplicated resources and consolidation, will create a group better positioned to deliver growth.
David Norman, the group’s chief executive said: “I have fully reviewed the group’s operations and while the fundamentals of the business are sound, considerable action is required, in current circumstances, to improve the performance of the group and enhance shareholder value.
“The short-term impact of the restructuring is painful but necessary. Our actions will create a group that is well positioned to deliver growth, with improved margins, through a more robust supply chain and an effective market facing structure.”
He continued: “The restructured organisation will be able to respond quickly to future market opportunities both in terms of organic growth and strategic development where our criteria for value and earnings enhancement are met.”
