Stadium Group Sells Plastic Business, Confident For FY10

15th Jun 2010 08:19

LONDON (Dow Jones)--Stadium Group PLC (SDM.LN), a provider of electronic manufacturing services, Tuesday reported the sale of its branded plastics business to Flambeau Europlast Ltd. for GBP2.5 million cash and said revenue growth for the five months ended May 31 has been very strong and it expects first half results to be significantly ahead of last year. MAIN FACTS: -Intends to utilize the proceeds on sale of the business to provide cash resources for the further development of its electronic manufacturing services and power business, and to reduce its net pension obligations. -Company to retain the freehold property that the branded plastics business operates from, and will lease it to Flambeau at an annual rental of GBP0.40 million for a flexible term expected to be between six and 12 months. -Freehold property comprises of 128,000 square feet at Higham's Park, London, and has a current net book value of GBP2.05 million; Company intend to pursue opportunities for the sale of the freehold property with vacant possession at the conclusion of the lease, and anticipate that this can be achieved at a value significantly greater than net book value. -Stadium Group reports strong trading in core electronics business during the first half of the year, such that results for the six months ending June 30 are expected to be significantly ahead of the corresponding period last year. -Company confident of achieving market expectations for the full year without the contribution of its branded plastics business -Combined turnover of Stadium Electronics and Stadium Power amounted to GBP35.3 million in 2009, out of a group turnover of GBP46.6 million. -In the financial year ended Dec. 31, 2009, the branded plastics business contributed turnover of GBP11.3 million and net operating profit of GBP0.8 million to the group. -Agreement reached with the trustees of the pension fund to make an additional contribution of GBP0.9 million from the net proceeds of the sale. -Favorable outlook for revenues from the core electronics business in the second half expected to continue, such that even without the contribution of the branded plastics business for the remainder of the year -Stadium Group now focused solely on its high growth electronics business -Shares at 0710 GMT up 1.5 pence or 2.5%, at 61.5 pence, valuing the company at GBP18 million. -By Tapan Panchal, Dow Jones Newswires. Tel +44(0)207-842 9448, [email protected] (END) Dow Jones Newswires June 15, 2010 03:19 ET (07:19 GMT)