News blog
Eleco
- BY: Andrew Hore |
- POSTED: 03/06/2009 |
Eleco says that its full year figures are unlikely to show any improvement from the interims.
This is well below the expectations at the time of the interim announcement in February. The main problem is the weak market for precast concrete products, which had been expected to recover. Orders have been slow in coming through and precast concrete revenues in the four months to April 2009 were 46% lower than the same time in the previous year. An improvement is expected in the final two months of the financial year to June 2009 but the figures will still be worse than anticipated.
The shares slumped 13p to 35.5p each, which values the building products and software company at £21.5m.
Revenues slipped from £39.4m to £37.2m in the six months to December 2008, while profits dived from £3.65m to £270,000 after restructuring costs. Full year profits of £2.15m were forecast.
Software revenues are also going to be disappointing because of poor sales of the Grand Designs 3D visualisation software. The software business will report similar full year losses to last year.
The businesses related to house building are trading at near to expectations.
Annual operating costs have been cut by £2.7m and more cost cutting is likely. Management is being careful about the capital expenditure it undertakes.
Net cash was £118,000 at the end of December 2008 but this is a seasonal low point and the second half normally generates more cash - but this may not be the case this year. There are bank facilities of £14.5m which last until 2012.
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