4th Jul 2016 07:01
LONDON (Alliance News) - 600 Group PLC on Monday said it has sold its Letchworth Garden City long leasehold property for its book value of GBP2.0 million, noting that the site had become too large for its European operations, and said its presence in the US reduced its risk in light of the UK's vote to leave the European Union.
The distributor, designer and manufacturer of industrial products said it has sold the property to Kite Packaging Group, with completion expected within the next two weeks.
600 Group noted it had decided to sell the site following the integration of the two industrial laser system businesses TYKMA and Electrox, which resulted in its manufacturing activitiy centering in a new purpose built facility in Ohio, US. As such, 600 Group said its existing site in the UK had become too large for the European sales support and service operation which will now move to a new leased site in Letchworth in Hertfordshire.
The company said there were a number of important factors within the company which reduced the risk in light of the UK's vote to leave the European Union, namely its presence in the US.
"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 US 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," said Executive Chairman Paul Dupee.
"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," Dupee added.
By Hannah Boland; [email protected]; @Hannaheboland
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