17th Feb 2010 07:00
17 February 2010 Umeco plc Interim Management Statement
Umeco plc, an international provider of advanced composite materials and supply chain services primarily to the aerospace & defence industries, today publishes its Interim Management Statement relating to the period from 1 October 2009 to 16 February 2010, with the financial information relating to the four month period from 1 October 2009 to 31 January 2010.
Current trading and outlook
Revenue in the four months to 31 January 2010 was slightly below that achieved in the equivalent period in the prior year. The order book at 31 January 2010 was £225.1 million (30 September 2009: £213.0 million), with the increase primarily reflecting additional parts responsibility taken on under Supply Chain contracts.
The key markets served by our Composites business continue to be adversely affected by the economic downturn. This has created a higher degree of uncertainty for the full year outlook than we would normally expect at this stage in our reporting cycle, and therefore adjusted profit before tax for the year may be towards the lower end of market expectations. Earnings per share will benefit from a lower effective tax rate.
Clive Snowdon, Chief Executive, commented:
"While there continue to be short term challenges for the Group and the timing of recovery remains uncertain, we serve growth markets and our medium and long term prospects are robust. In the near term, we continue to be vigilant to changing conditions in order to minimise the impact upon the Group of the weak economic environment while taking opportunities to enhance our market positions".
Tax
We expect our tax rate for the years to 31 March 2010 and 2011 to be approximately 30.0 per cent as a result of an international corporate restructuring that was implemented in December 2009 (year to 31 March 2009: 32.9 per cent).
Balance sheet
Net debt at 31 January 2010 was £116.7 million (31 January 2009: £152.5 million; 30 September 2009: £90.6 million). This increase in net debt in the period since 30 September 2009 was expected and reflects the Group's normal seasonality in cash flows, which tends to give rise to a peak in net debt around the start of the calendar year.
We continue to take action to improve our working capital position and contain capital expenditure. It remains our policy to maintain a tight credit control environment and shipments to certain participants in the wind energy sector in particular have been, and continue to be, held back in order to ensure the Group's exposure to credit risk remains at an acceptable level.
Assuming exchange rates remain at 31 January 2010 levels we expect net debt at 31 March 2010 to be close to the level reported at 30 September 2009. We remain comfortable with our status against banking covenants and debt levels continue to benefit from management actions to improve working capital ratios. Discussions with potential providers of funding have commenced in relation to the US$89.0 million credit facility that expires in August 2011.
Umeco Supply Chain
Umeco Supply Chain continued to enjoy good demand from its OEM customer base. Compared to the same period in the prior year, revenue in the four months to 31 January 2010 was slightly lower as weaker aftermarket demand was only partially offset by the benefits of contracts won during 2008/09.
The civil aircraft backlog remains high and the first flight of the Boeing 787 in December 2009 is a key milestone for a programme that is expected to generate substantial revenue for the Group in the coming years, with production volumes forecast to rise gradually from mid-2010.
Umeco Composites
Umeco Composites continues to experience weak demand levels in a number of key markets. However, as the current financial year has progressed, there has been some recovery in the wind energy market and orders have been received from motor sport customers, principally Formula 1 teams, which had been deferred from mid-2009. Despite these positive factors, Composites' order intake and revenue were below the same period in the prior year.
Advanced Composites Group ('ACG') benefitted from the expected catch-up in orders from the Formula 1 sector as uncertainties over specifications for the 2010 season were resolved. However the other key markets of automotive and marine remained depressed, and there has been a hiatus in ballistics activity while new contracts come on-stream.
As anticipated, activity levels at ACG's small South African operation, which supplies composite parts to the Mercedes McLaren SLR supercar programme, have been reducing as the programme comes to an end. Future options for this business, including divestment, are under review.
The Chinese wind energy market has continued to develop, although elsewhere demand remains weak and consequently overall activity levels in our wind energy businesses remain below expectations. Nevertheless we expect the market to recover during 2010.
We have recruited a Managing Director for our Process Materials business as a replacement for Tim Cooper, who left the Group in December 2009. We have also appointed a President of Structural Materials' US operations with responsibility for JD Lincoln and ACG's US facility; this will provide a more cohesive management structure and leverage our sales and marketing activities.
Board committee chairmanship
The Group is pleased to announce that Stephen Bird has been appointed as chairman of Umeco's remuneration committee with immediate effect. Stephen is an existing member of the remuneration committee and succeeds Graham Zacharias. As previously announced, from 31 December 2009 Graham Zacharias became chairman of Umeco's audit committee. Graham Zacharias remains a member of the remuneration committee.
- Ends -
Umeco will be holding an analyst conference call today at 8.00am (UK time) which can be accessed from within the UK and internationally by telephoning +44 (0) 1452 568 051 and entering access code 54581680#.
After the conference call, replays of the call can be accessed by telephoning +44 (0) 1452 550 000 and entering access code 54581680#.
For further information, please contact:-
Umeco plc Tel: +44 (0) 1926 331 800 Clive Snowdon, Chief Executive Doug Robertson, Finance Director
www.umeco.com Tulchan Communications Tel: +44 (0) 207 353 4200 John Sunnucks Lucy Legh Notes
The next scheduled update on the Group's performance will be the announcement of results for the year to 31 March 2010. This will be released on 8 June 2010.
The information in this announcement is based upon unaudited management accounts.
Certain statements made in this announcement are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from any expected future events or results referred to in these forward looking statements. Unless otherwise required by applicable law, regulation or accounting standard, we do not undertake any obligation to update or revise any forward looking statements, whether as a result of new information, future developments or otherwise.
Further Information on Umeco plc
Umeco is a leading innovator in distribution and supply chain management to the aerospace & defence industries, harnessing new methods for enhancing its customers' performance and profitability. Umeco also has significant manufacturing interests in advanced composite materials for a growing range of applications in its core aerospace and defence markets and in other high performance technology industries such as motor sport, automotive and wind energy.
Listed on the London Stock Exchange, Umeco had revenue from continuing operations of £415.3 million in the year to 31 March 2009.
Umeco is managed through two business streams:-
Umeco Composites - comprises a Structural Materials business and a Process Materials business. With seven operating units located throughout the UK, Europe and the US, it provides a range of services, products, design expertise and tooling solutions principally to the aerospace market and other users of advanced composite materials.
Customers include Boeing, Airbus, BAE Systems, manufacturers of wind turbine blades, a number of manufacturers of high performance super cars and Formula 1 teams.
Umeco Supply Chain - a leading international provider of value-added distribution and supply chain outsourcing services to customers in the aerospace & defence market. With its specialisation in the supply of small and medium value components and sophisticated IT systems, its growing global customer base can enjoy significant operational, cost and working capital benefits.
Customers include Rolls-Royce plc, BAE Systems, Safran Group, Parker Aerospace, Goodrich, Thales Aerospace, Turbomeca, ATK, Lockheed Martin and the US Department of Defense.
vendorRelated Shares:
Ubsetfusmca