21st Feb 2020 09:01
(Alliance News) - Shares in 600 Group PLC fell on Friday, after reporting its trading has been hurt by Boeing Co's 737 MAX grounding, a General Motors Co strike and the coronavirus outbreak in China.
The industrial engineering company's stock was 15% lower at 11.90 pence each in London early Friday morning.
The firm said its full-year performance is now expected to be "significantly below" expectations.
In December, the AIM-listed firm said macro-economic and political uncertainties hurt fourth quarter order intake, causing it to fall "significantly" below originally predicted levels.
600 said: "Trading conditions have since become more challenging with the combination of the General Motors strike in USA plants at the end of last year and the suspension of manufacture by Boeing Co of its 737 MAX in January this year further impacting hundreds of thousands of suppliers across our core industrial markets.
"Order intake in both Machine Tools and Industrial Laser Systems therefore remains volatile, including two significant projects that have been pushed into the next financial year."
Nearly 50,000 GM workers downed tools in mid-September, launching the biggest labour dispute to hit the automaker in more than a decade. The strike ended in October after a 40-day walkout.
Meanwhile Chicago-based Boeing's 737 MAX has been grounded since March following two deadly crashes. Accidents in Indonesia and Ethiopia resulted in the deaths of 346 people.
What's more, 600 reported that the coronavirus "is causing disruption to shipping from the Far East".
"Whilst the group has no significant volume of sales and little direct sourcing from mainland China, the effect of delays to deliveries is pushing sales past the end of the March financial year," 600 said.
So far in its 12 months to March 28, 600 said order in its UK operations have more than doubled year-on-year.
600 added: "The group is also pleased to report that contracts have been exchanged for the sale of the Gamet Colchester site for USD500,000. This sale is part of the group's rationalisation of the UK operations of its Machine Tools division to reduce operational risk and capital expenditure requirements. Completion is expected in the next few days with the proceeds used to reduce bank debt."
By Eric Cunha; [email protected]
Copyright 2020 Alliance News Limited. All Rights Reserved.
Related Shares:
SIXH.L