19th Aug 2008 10:30
19 August 2008
New Composite Tooling Win and
Interim Management Statement
Hampson Industries PLC ("Hampson" or "the Group"), the international aerospace and precision engineering group, today announces that its US subsidiary, Coast Composites, Inc, has received a Letter of Intent ("LOI") from Airbus to supply initial wing and fuselage curing tools for the Airbus A350 programme.
The Airbus A350 is a long range, mid-sized, wide-body family of airliners currently under development, designed to compete with the Boeing 777 and Boeing 787. The A350 will be the first Airbus with fuselage and wing structures made primarily of carbon fibre reinforced plastic and has a scheduled entry into service date of 2013.
First deliveries under the LOI, which is worth in excess of US$23 million in total, are expected to commence in the current financial year. The LOI is for the first set of tools only and it is expected that rate and derivative tools will add a further US$60m of demand for Coast over the next four years.
Hampson also today issues its Interim Management Statement covering the period from 1 April 2008 to date as required by rule 4.3 of the Disclosure and Transparency Rules of the UK Listing Authority.
Aerospace
Demand in the Group's core aerospace markets has continued to remain buoyant during the period. Although the rate of new aircraft order intake has, as expected, been slowing over the previous six months, the number of new orders received by Airbus and Boeing was still more than twice the number of deliveries of new aircraft. The large commercial jet order backlog consequently stood at a new record of 7,324 aircraft as at 30 June 2008, representing growth of 28% over the previous twelve month period, and the 16th consecutive quarterly gain. It is anticipated that July will see a continued rise, in light of the further orders for new aircraft recently announced at the Farnborough International Air show.
Against this backdrop, both of the Group's aerospace divisions, Components & Structures and Composites & Transparencies traded strongly in the period. In light of continuing lower build rates of the Eclipse 500, the immediate outlook for the programme will continue to be monitored closely and all necessary actions taken to minimise any long term adverse impact on the Group. Where appropriate, cost base reductions and any necessary asset impairments will be made during the current financial year. The maximum potential cash cost of such actions to the income statement this financial year is unlikely to exceed £1.5 million, with the total costs being treated as exceptional. It is expected that such actions, once complete, would have a positive on-going impact on the Group's trading performance.
With continuing strong global demand for tooling systems for composite aero-structures, Odyssey and GTS, which were acquired by the Group on 9 June 2008, have exceeded the Board's expectations in post acquisition trading to date and continue to enjoy record order books. Coast Composites also continues to see a progressive rise in new orders and is now positioned to take greater advantage of this demand through the commissioning in the period of new high speed machining capacity at its Irvine, CA facility.
The Group's hot temperature composites business, Composites Horizons inc., continues to see strong demand for its capabilities and is expected to secure further new contracts during the current financial year.
Automotive Turbocharger
Demand for the Group's products continues at high levels driven by the need for increased fuel efficiency and reduced emissions in both the large commercial diesel and light vehicle segments. Performance for the first quarter showed a significant improvement on the comparable period of the prior year and operational improvements continue to be made to achieve optimisation of processes and improve capacity in key process areas. As a result, further progress is expected to be achieved during subsequent quarters.
Outlook
With well over half of the Group's revenues now derived from demand for carbon composite materials, global leadership positions in a number of niche market sectors and continuing strong orderbooks, the Group remains very well positioned to continue to generate profitable growth in 2008/09. In particular, rate and derivative tools for the B787 and tooling requirements for the A350 programme are expected to provide a source of significant future growth going forward.
Although financial pressures facing commercial airlines are likely to impact the rate of new order intake for Boeing and Airbus, the unprecedented strength of the current backlog positions, the economic necessity for airlines to fly more fuel efficient aircraft and the continuing demand from Asian carriers, are together likely to ensure demand in the global commercial aerospace market remains healthy for the directly foreseeable future.
Global demand for turbocharger components and assemblies is expected to remain strong and continuing operational improvements should lead to a continuation of improved trading results.
Ends.
Further information:
Kim Ward, Chief Executive +44 (0)1384 472941
Howard Kimberley, Finance Director +44 (0)1384 472946
Jonathan Gollins/Marylene Guernier, M:Communications +44 (0)20 7153 1269
About Hampson:
The Group's operations are structured into three business segments, serving primarily the global commercial and military aerospace and specialist engineering markets from manufacturing facilities in the UK, North America and India.
Approximately 95% of the Group's sales are derived from its aerospace activities, the balance from the market for automotive turbocharger components.
In June 2008, Hampson completed the acquisition of Odyssey Industries, Inc. and Global Tooling Systems, Inc. for a total consideration of up to USD314 million, partly financed through a £65 million placing and open offer. The Group now employs nearly 2,500 people worldwide.
Hampson Industries PLC is listed on the main market of the London Stock Exchange (Symbol: HAMP). For more information on Hampson: www.hampsongroup.com
Cautionary Statement:
This announcement contains forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as anticipate, target, expect, estimate, intend, plan, goal, believe, will, may, should, would, could, is confident, or other words of similar meaning. Undue reliance should not be placed on any such statements because they speak only as at the date of this document and, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and Hampson's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements.
There are a number of factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are; increased competition, the loss of or damage to one or more key customer relationships, changes to customer ordering patterns, delays in obtaining customer approvals for engineering or price level changes, the failure of one or more key suppliers, the outcome of business or industry restructuring, the outcome of any litigation, changes in economic conditions, currency fluctuations, changes in interest and tax rates, changes in raw material or energy market prices, changes in laws, regulations or regulatory policies, developments in legal or public policy doctrines, technological developments, the failure to retain key management, or the key timing and success of future acquisition opportunities or major investment projects.
Hampson undertakes no obligation to revise or update any forward looking statement contained within this announcement, regardless of whether those statements are affected as a result of new information, future events or otherwise, save as required by law and regulations.
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