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Global auto slowdown to blame for 600 Group woes
18th Dec 2019 13:19
(Sharecast News) - Industrial engineering company The 600 Group updated the market on its trading on Wednesday, reporting that as it had noted in its interim results, it had been experiencing certain macroeconomic and political uncertainties across its end markets, which it expected could create some short-term disruption to trading.
The AIM-traded firm said since then, order intake for the fourth quarter was now expected to be "significantly" below originally predicted levels, with orders for Germany and the Far East in particular suffering delays "heavily influenced" by the global automotive slowdown.
It said there had been good progress in the UK business, where orders remained up over 100% on the prior year, as well as continued good performance at the newly-acquired CMS business, driven by its focus on healthcare and pharmaceuticals.
Gross margins across the group were also holding up.
"However, these positive factors will not be sufficient to make up the shortfall from the likely revenue reduction and as a result, the outturn for the full year is expected to be significantly below the board's previous expectations," the directors said in their statement.
"Despite the short-term end-market weaknesses and macroeconomic uncertainty, the board continues to believe in the long-term fundamentals of the group and the strategy in place to de-risk and diversify the business and remains optimistic for the long-term future."
At 1253 GMT, shares in The 600 Group were down 24.92% at 14.19p.
The AIM-traded firm said since then, order intake for the fourth quarter was now expected to be "significantly" below originally predicted levels, with orders for Germany and the Far East in particular suffering delays "heavily influenced" by the global automotive slowdown.
It said there had been good progress in the UK business, where orders remained up over 100% on the prior year, as well as continued good performance at the newly-acquired CMS business, driven by its focus on healthcare and pharmaceuticals.
Gross margins across the group were also holding up.
"However, these positive factors will not be sufficient to make up the shortfall from the likely revenue reduction and as a result, the outturn for the full year is expected to be significantly below the board's previous expectations," the directors said in their statement.
"Despite the short-term end-market weaknesses and macroeconomic uncertainty, the board continues to believe in the long-term fundamentals of the group and the strategy in place to de-risk and diversify the business and remains optimistic for the long-term future."
At 1253 GMT, shares in The 600 Group were down 24.92% at 14.19p.