26th Jun 2014 08:13
LONDON (Alliance News) - Machine tools and laser-making company The 600 Group PLC reported Thursday an increase in profit and revenue for the full year, despite a mixed performance from its two businesses.
AIM-listed 600 Group posted pretax profit of GBP2.7 million for the year ended March 29, up from GBP1.0 million a year earlier, even though revenue dipped to GBP41.7 million from GBP41.8 million.
600 Group which ended takeover talks with Qingdao D&D Investment Group Co Ltd in December, said its two reportable businesses, machine tools and laser making, had a mixed year.
Machine tools reported revenue of GBP34.4 million, down slightly from GBP34.9 million a year earlier. 600 Group said revenue in local currency contracted by more than 34% in Australia where market conditions were challenging due to political uncertainty, government austerity measures, and major fluctuations in currency and interest rates.
European revenues increased 21% for machine tools, as product availability, lead times and customer service all returned to normalised levels.
Overall operating margin for machine tools rose to 8.7% from 6.1%.
Laser machines, on the other hand, performed well during the year, with revenue up 8.6% to GBP7.6 million from GBP7.0 million a year earlier, including an 18% increase in the second half compared with the first. This coincided with the launch in September of new products, which have been very well received, 600 Group said.
Operating margin for the laser division rose to 5.6% from 3.0%.
600 Group said group gross margins increased by 150 basis points to 33.2% from 31.7%, primarily as a result of management initiatives to reduce direct costs through modifications to product specification, renegotiation of sources of supply, and greater throughput of products against a relatively fixed production cost base.
Order intake during the year rose to GBP42.3 million from GBP37.4 million a year earlier.
Despite its performance, the company said it will not pay a dividend. It said the "retention of earnings for redeployment in the business continues to be the most appropriate use of available financial resources in the short term."
The 600 Group shares were quoted up 5.1% at 23.38 pence Thursday morning.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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