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600 Group

  • BY: Andrew Hore |
  • POSTED: 29/12/2011 |

Capital equipment and machine tools supplier 600 Group barely broke even in the first half but a strong order book should help the second half to be much stronger.

The first half was hit by problems transferring production to Poland and a strike in South Africa. In the six months to October 2011, 600 Group increased its revenues by 8% to £24.7m. Most of the growth in revenues came from the core machine tools business. The South African waste management business reported flat revenues but the profit contribution fell sharply. This meant that 600 Group broke even at the operating level compared with an operating profit of £152,000 in the six months to October 2010.

The group reported a loss of £6.42m, against a pre-tax profit of £1.51m. Although much of that loss was non-cash write-offs there was still a cash outflow from operating activities of £3.19m. There were £1.7m of cash restructuring costs.

Net debt was £7.08m at the end of October 2011.

The order book is stronger than last year. House broker finnCap is maintaining its 2011-12 profit forecast at £800,000. It had already cut its forecast from £2m to £800,000 at the time of the previous figures.

At 18.5p a share, 600 Group is valued at £11.8m. The shares are trading on 14 times 2011-12 prospective earnings, falling to less than five times in 2012-13.

Andrew Perloff increased his interest in 600 Group to 6.41% during last month.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFDecember2011_27.pdf

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