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600 Group

  • BY: Andrew Hore |
  • POSTED: 11/09/2013 |

Machine tools supplier 600 Group says that it has received a bid approach from Qingdao D&D Investment Group Co. Ltd.

The proposed bid would be in cash but no figure has been released. At 17p a share, up 1.25p, 60 Group is valued at 14.3m.

A strong second half meant that 600 Group reported better than expected figures for the year to March 2013. Revenues from continuing operations improved from 37.6m to 41.8m, while an underlying loss of 420,000 was turned into a profit of 390,000. If net pension interest is included the profit is 3.9m.

The EU and Australia are tough markets but there is scope for growth in the US. Machine tools sales were higher, with lead times reduced, but laser marking revenues were lower as 600 Group gets ready to launch a new range of products. Operating margins have improved from 0.6% to 2.3% but they could recover further. Orders are increasing, particularly in the UK and US.

House broker finnCap forecasts a profit of 1.9m in 2013-14, which puts the shares on less than six times prospective earnings.

Property sales and the cash from the disposal of the South African operations have helped to improve the debt position. Net debt was 5.4m at the end of March 2013 and the March 2014 figure is expected to be similar.

The 600 Group pension scheme has been closed to future accruals. The change in the scheme rules means that the surplus can be added to net assets. That was the main reason behind the rise in NAV from 7m to 21.7m.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFAugust2013_47.pdf

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