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Abbeycrest reports total turnover loss 15.0% to £70.2m
28 Jun '06
6 min read
- Final closure of the Birmingham site and commissioning of gold strip rolling plant in Thailand.
- Disposal of the operations of DRT Ltd.
- Disposal of the operations of the joint venture, IMS Ltd.
- Closure of 18ct manufacturing at G & A Ltd.
- Investment in sales software and web-site to replace 50 percent of salesforce for the UK independent sector.
- Downsizing of the UK workforce across all departments and at all levels to save overhead.
- Merging of Essex pcl into Abbeycrest Thailand Ltd to take advantage of synergies.
The only aspect of the restructuring remaining is the final move of the majority of DCL production from China to our own factory in Thailand. This was held up by a legal dispute with the minority interest shareholder of DCL. The dispute has now been resolved satisfactorily and this transfer can now be completed.
Outlook
The restructuring process has been painful and has resulted in exceptional costs of around £1.9m in the year 2005/06. However, the result is a reduction in recurring costs going forward of well over £3m p.a. as well as the eradication of the losses sustained in the DRT and IMS operations. In short, assuming no significant deterioration in current market conditions, management is confident that the restructuring and cost savings programme will return the Group to profitability in 2006/07.
In addition, subsequent to the re-banking and as a consequence of control over the Group's working capital, the Group's borrowings to date have reduced by approximately £6m year on year. Management is confident that this level of improvement will be sustained for the remainder of the financial year.
- Disposal of the operations of DRT Ltd.
- Disposal of the operations of the joint venture, IMS Ltd.
- Closure of 18ct manufacturing at G & A Ltd.
- Investment in sales software and web-site to replace 50 percent of salesforce for the UK independent sector.
- Downsizing of the UK workforce across all departments and at all levels to save overhead.
- Merging of Essex pcl into Abbeycrest Thailand Ltd to take advantage of synergies.
The only aspect of the restructuring remaining is the final move of the majority of DCL production from China to our own factory in Thailand. This was held up by a legal dispute with the minority interest shareholder of DCL. The dispute has now been resolved satisfactorily and this transfer can now be completed.
Outlook
The restructuring process has been painful and has resulted in exceptional costs of around £1.9m in the year 2005/06. However, the result is a reduction in recurring costs going forward of well over £3m p.a. as well as the eradication of the losses sustained in the DRT and IMS operations. In short, assuming no significant deterioration in current market conditions, management is confident that the restructuring and cost savings programme will return the Group to profitability in 2006/07.
In addition, subsequent to the re-banking and as a consequence of control over the Group's working capital, the Group's borrowings to date have reduced by approximately £6m year on year. Management is confident that this level of improvement will be sustained for the remainder of the financial year.
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