AGM Statement

CHAIRMAN'S STATEMENT - 26 JUNE 2017

I expect you have had time to read our annual accounts and I will be happy to address any questions you may have in due course.

I will now give you a short report of the trading companies.

The Plastics Division overall is trading in line with expectations. At Barnstaple, the factory faces subdued orders. A price increase with a major customer has been forced through, which may result in this work ultimately being lost.

Trading at the Derby site has however been better than budgeted which will help maintain the overall divisional performance.

The Plastics Division does though face pressure on costs such as that of raw materials and the impact of the National Minimum Wage which is putting general pressure on wages overall.

Within the Engineering Division, Tex Engineering has opened the year strongly on the back of increased demand for a number of its product lines. With margin and overheads under control we should see the company report another solid profit this year.

Eurotex have received the long awaited order from Chile which will free up stock, reduce our stock reserves and move our company into profit. Further rationalisation of this company is being investigated.

The ATC team has been expanded and 2017 is expected to be a year of transition. The aircraft carrier project is continuing to provide work, moreover there are a number of further opportunities both within the civilian and military market worldwide. The growth in air travel, the doubling in air passenger numbers is driving the need for additional airport capacity and within that, the demand for control towers.

BSP has opened the year slowly. Enquiry levels remain buoyant including enquiries from the Baltic states and South America for the airfield damage repair system.

G&M TEX achieved a profit in its first full year of trading, after allowing for the costs of relocation to Claydon. The current year will see the completion of the move into a new purpose-built factory, which will allow us to develop larger generator units in conjunction with a major engine manufacturer.

QK Honeycomb Products suffered from its prices being affected by exchange rate fluctuations in 2016. Assuming that exchange rates remain at current levels the effect of this will not be repeated in the current year. On a positive note, the leisure vehicle market which provides the underlying volume of QK business is returning to pre-recession levels.

We live in difficult times which makes forecasting and planning for the Group somewhat testing. However, the Board is confident that any upturn will be to our advantage.

As a Board, we prioritise the care and support of our pensioners. I am pleased to report the pension fund deficit has stabilised, due in part to the high level of the stock market. We continually monitor the most effective way of handling the large liabilities that our Pension Fund presents.

We will continue to protect the interests of both our pensioners and those who have given many years of good service to the Group, we as your directors will continue to act in the best interest of our shareholders in both good and difficult times.