Industrial Engineering (2750)

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Order book growing again at the 600 Group

By Josh White

Date: Tuesday 20 Jul 2021

LONDON (ShareCast) - (Sharecast News) - Industrial engineering company the 600 Group updated the market on its full year of trading on Tuesday, reporting a 20% fall in revenue to $53.5m (39.35m), which it put down to the impact of the Covid-19 pandemic.
The AIM-traded firm said its underlying EBIT came in at $2.5m for the 52 weeks ended 31 March, while underlying profit before tax was in line with the prior year at $1.1m.

Group net debt at year-end, excluding IFRS 16 lease liabilities, was $12.8m, down from $14.2m a year earlier.

Of that debt, the 600 Group said $2.2m would be eligible for forgiveness from September as a US Paycheck Protection Program (PPP) loan dependent on employment numbers, payroll expenditure and certain facility costs, with any amount not forgiven repayable over a two-year term with an all-in interest rate of 1.0%.

The company said it had a "strong pipeline" of opportunities across all operating divisions, in particular in industrial laser systems, where the integration of the sales operations and back-office functions of TYKMA and Control Micro Systems had reportedly progressed well.

Its order book stood at $14.1m at period-end, which had since increased to $22.5m as at 15 July.

Looking at the new year, the company said trading in the first quarter was "strong", with order books seeing a marked improvement since 31 March, and increased levels of activity across the group.

"In particular, the pipeline in the group's higher margin, growth market industrial laser division is very encouraging, with Control Micro Systems taking a number of large new orders in the current year, including a $4.3m order earlier this month - the largest in its history," the board said in its statement.

"The group's management teams continue to respond exceptionally well in difficult conditions and, having successfully restructured the groups' loan notes to provide financial flexibility, the group is now positioned as a leaner and more efficient organisation which can take advantage of the operational gearing in our activities as volumes continue to increase.

"Whilst there still remains some uncertainty created by the Covid-19 pandemic, the board continues to believe in the long-term fundamentals of the group, in brand promotion, investment in new, higher end product capabilities and diversification into new markets and selective acquisitions."

The 600 Group said it would report its audited results for the 2021 financial year by 30 September, with the delay a result of pandemic-related restrictions and delays.

At 1312 BST, shares in the 600 Group were up 19.15% at 14p.

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