26th Jun 2015 16:49
LONDON (Alliance News) - Alumasc Group PLC Friday said it has sold the trade and assets of Alumasc Precision Components (APC), the larger of its two engineering products businesses, to Shield Group for GBP5.8 million, below book value.
APC had gross assets of GBP9 million and net assets - the difference between assets and liabilities - of GBP6.5 million, according to the group, which will use the sale proceeds to develop its building products activities, including the relocation, modernisation and expansion of its rainwater and drainage business.
The sale will cut the group's net assets by about GBP500,000 before transactional costs, and Alumasc is to retain APC's legacy defined benefit pension obligations.
APC generated an operating loss of GBP1.4 million in the year ended June 30, 2014, though its performance improved in the first half of the current financial year. One-off costs of exiting the business and resolving customer claims are expected to amount to GBP2 million, with GBP1.5 million of that in cash, according to Alumasc.
Alumasc said that performance elsewhere in the group in the second half of the financial year has been better than it expected on reporting results for the first half, driven by the building products division.
It said the outlook for the group "continues to improve", with the building products divisional order books standing at GBP23.7 million, up from the GBP19.2 million at the end of 2014. Order in take in the current financial year so far has been more than 20% year-on-year, the company said.
"We are delighted to have concluded the sale of APC to Shield, a company we believe is better positioned than Alumasc to develop the business and its service to customers," Chief Executive Paul Hooper said in a statement.
"The divestment of APC will be strongly earnings and cash flow enhancing for Alumasc and will allow the Group to focus on its strategic priority to drive the further profitable growth of its continuing businesses," Hooper said.
Alumasc Group shares closed up 1.3% at 159.60 pence on Friday.
By Samuel Agini; [email protected]; @samuelagini
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
Alumasc Group