Half-Year Trading Update

RNS Number : 2174J

Molins PLC

27 June 2017

 

FOR IMMEDIATE RELEASE                                                                                                     27 June 2017

MOLINS PLC

 ("Molins" or the "Company")

Half-Year Trading Update

&

Sale of Property in Canada

Half-Year Trading Update

The Company announces the following trading update ahead of its unaudited interim results for the six months ending 30 June 2017 to be announced in September 2017.

As described in the shareholder circular dated 8 June 2017 ("Circular") regarding the Proposed Sale of the Instrumentation and Tobacco Machinery division ("I&TM"), Molins entered the 2017 financial year with an order book that was substantially stronger than at the start of 2016, with the increase arising in the Packaging Machinery division.  The first part of the year has resulted in order intake in all parts of Molins being at levels ahead of the same period last year.  In particular, order intake in the Continuing Group (i.e. excluding I&TM) at the end of May 2017 was considerably ahead of order intake for the same period last year.  Trading is as expected and ahead of last year in all parts of the Continuing Group.

Sale of Property in Canada ("Sale")

Molins PLC's Canadian subsidiary company, Langen Packaging Inc ("Langen"), entered into an unconditional agreement on 16 June 2017 to sell its manufacturing facility at 6154 Kestrel Road, Mississauga, Ontario to BuildCorp Limited, a company incorporated in Canada, for a gross consideration of C$11.7 million (£6.7 million) payable in cash on completion (save that a deposit has been paid of C$0.5 million (£0.3 million)).  Net proceeds, after fees and taxes, are expected to be approximately C$10.2 million (£5.9 million).  The book value of the asset subject to the Sale as at 31 December 2016 was C$2.6 million (£1.5 million).  Completion of the transaction is expected to take place by the end of November 2017.

Langen is to enter into a 10 year contract to lease a newly built facility, approximately 8 miles from its current location, still in Mississauga, Ontario, from an independent third party at an annual cost of approximately C$0.6 million (£0.35 million).  The lease term and payments will commence from 1 November 2017.  Langen is expected to start its move into the new building in the fourth quarter of the year, to coincide with its departure from its existing building.  Langen is expected to spend approximately C$1.7 million (£1.0 million) to adapt the building to its needs.

The balance of the proceeds from the Sale is expected to be used for the development of the Company in line with its strategic objectives.

Tony Steels, Molins Chief Executive, commented:

"The new facility will provide Langen with a superb new environment from which to operate, including a customer showroom to showcase our capabilities and assembly and acceptance facilities that will enable Langen to serve its customers even more effectively, whilst providing our employees with a workplace to be proud of.  This will be a platform for growth to assist in our strategic objectives in the Americas."

For further information, please contact:

Molins PLC Tony Steels, Chief Executive David Cowen, Group Finance Director	Tel: [phone]
Panmure Gordon (UK) Limited (NOMAD)  Andrew Potts, Peter Steel - Corporate Finance James Stearns - Corporate Broking	Tel: [phone]
Hudson Sandler Nick Lyon, Jasper Bartlett	Tel: [phone]

Unless the context requires otherwise, capitalised terms in this announcement have the same meaning as terms defined in the Circular, a copy of which is available to view on the Company's website www.molins.com.

 

END

 

 

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