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LONDON (Alliance News) - Alumasc Group PLC Tuesday reported a big increase in profit for the full year, reflecting gains it made across its building and engineering products divisions.
Alumasc posted pretax profit of GBP5.1 million for the year to June 30, up from GBP2.8 million a year earlier, even though revenue fell to GBP113.4 million from GBP116.8 million. Underlying operating margin rose to 6.0% from 5.7%.
It said group revenues reduced mainly as a result of a lower level of activity on the significant GBP13 million aluminium smelter refurbishment project at Kitimat in Canada, "where our works are now drawing towards completion, and the non-repeat of high prior-year sales of insulated renders to Community Energy Savings Plan projects that ceased early in 2013".
Excluding the impact of these projects, the remaining building products divisional revenue grew by 2%, while engineering products revenue increased by 5%.
Alumasc said profit growth was underpinned by strong growth, at improved margins, in its "early cycle" building products businesses as the UK construction market began to recover, particularity those businesses serving the housebuilding and refurbishment markets and a reduction in operating losses in the engineering products division.
Revenue for the engineering products division rose 5%, as the company made investments to strengthen management and in new plant and equipment, while eliminating loss making and peripheral work.
However, it warned that the division continues to face margin pressures as its large original equipment manufacturer customers strive to achieve their own business objectives in a highly competitive marketplace during a period when sterling strengthened.
"With the strength of Alumasc's niche market positions and management teams, and with our ongoing investment in innovation, new product development and increasing export sales opportunities, Alumasc is well positioned to further grow its building products activities and improve shareholder value from its Engineering Products division," Chief Executive Paul Hooper said in a statement.
On the back of its performance the company increased its final dividend to 2.8 pence per share from 2.5 pence, to give a total payout to shareholders for the year of 5 pence compared with 4.5 pence a year earlier.
By Anthony Tshibangu; anthonytshibangu@alliancenews.com; @AnthonyAllNews
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