14th Jun 2019 09:36
(Alliance News) - Alumasc Group PLC on Friday warned that annual adjusted pretax profit for the year to June-end will be 10% to 15% below previous expectations due to weak second half performance by architectural screening, solar shading and balconies business Levolux.
The building and engineering products supplier added however that its core Roofing & Water Management and Housebuilding & Ancillaries divisions - together contributing roughly 80% of group revenue - are growing well and are anticipated to deliver encouraging overall year-on-year revenue growth.
In 2018 financial, the company posted underlying pretax profit of GBP6.5 million on revenue of GBP98.4 million.
Alumasc has addressed the margin issues experienced in the Gatic drainage pipe business - a part of Housebuilding & Ancillaries division - and the brand is seeing a much improved second half performance, it said.
Shares in the company were trading 0.1% lower at 102.90 pence each on Friday morning.
Levolux, which represents approximately 20% of group revenue, is forecast to report a higher operating loss in the second half of the year than anticipated due to project delays and margins remaining below expectations in its embryonic balconies business.
Alumasc, in response to the poor performance, has restructured the Levolux management team and is working on operational improvements to restore profitability at the business.
The company has retained its previously announced plans to reduce fixed costs by GBP1 million on an annualised basis in 2020 financial year. It additionally anticipates to record a further GBP1 million in savings as a result of Levolux restructuring. Net debt at period end is estimated to total around GBP5 million.
Alumasc intends to retain its dividend of 7.35 pence per share for the current 2020 financial year.
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