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Heywood Williams Grp (HYWD)

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Tuesday 18 November, 2008

Heywood Williams Grp

Interim Management Statement

RNS Number : 3221I
Heywood Williams Group PLC
18 November 2008
 



18 November 2008



Heywood Williams Group PLC



Interim Management Statement ('IMS')



Heywood Williams Group PLC, the specialist distributor of branded building products, issues its Interim Management Statement (IMS) covering the period July 2008 to 18 November 2008.


In the four month period from July to October 2008, sales were down 17% to £75 million compared to 2007. Like for like sales in the period, excluding the Avenco acquisition, were down 18%. Net borrowings at period end remain in line with expectations. 


Cumulatively, sales for the ten months to October 2008 were down 12% to £192 million compared to 2007. Like for like sales for the same period, excluding the Avenco acquisition, were down 14%.


Heywood Williams is facing very tough trading conditions, due to the unprecedented impact of the credit crunch on the residential new build and home improvement markets in North America, the UK and Europe.  These markets account for approximately 80% of the Group's sales, with the remainder split between door and window hardware to the UK commercial property market and building products to the recreational vehicle market in North America.


Trading conditions continue to be very challenging and are likely to remain so, both for the rest of this year and throughout 2009. The unprecedented issues in the global financial markets over the last two months have significantly reduced consumer confidence and this, in turn, has weakened residential building products and recreational vehicle markets even further. In the UK and Europe, residential new build activity is typically down around 50% and home improvement activity is down 15-20% year on year. The latest information from the manufactured housing market in North America is that units produced in September were down 12%, which is lower than the year to date trend of a reduction of 10% on the previous year. The recreational vehicle market is in major decline, with September shipments to retailers down 43compared to 2007 and there is clear evidence from our customers that sales levels will slow further in the fourth quarter.  Customer feedback indicates that there are likely to be cutbacks in manufacturing operations in November and December given the lack of consumer demand for recreational vehicles. 


In these very difficult trading conditions, the Group continues to implement a comprehensive 'self help' programme and remains focused on maximising cash generation by optimising working capital, especially stock levels, and continuing to aggressively drive specific initiatives to increase market shares, maintain margins and reduce costs.  Margins have been defended satisfactorily, with sales price increases achieved to recover higher raw material and energy costs and further major cost reduction initiatives are currently being implemented. Having reduced headcount significantly in North America in 2007, headcount across the Group will have reduced by around a further 20% by the end of the year. We are pleased to report that Carlisle Brass continues to outperform the market and that our new range of Easi-Exit emergency door hardware has been well received by customers throughout the UK.  


The Group has a supportive and continuing close working relationship with its banking syndicate. They are fully appraised of the market challenges facing the Group. As previously announced, discussions are currently underway to establish appropriate covenants for 2009-10.  


Outlook


The Group is facing very difficult market conditions and these have been exacerbated by the further negative impact of the recent turbulence in the global banking industry on consumer confidence over the last two months. Despite the substantial contribution of the mitigation initiatives, which continue to be implemented, the Board now expects the outcome for the full year to be below current market expectations. The degree to which our North American customers decide to operate in November and December and the degree to which our customers in Europe decide to trade in December will influence the final result.




Contacts:



Heywood Williams Group PLC

Tel: 01422 328850


Robert Barr, Chief Executive



Mike Richards, Finance Director






Financial Dynamics

Tel: 020 7831 3113


Jon Simmons/Sophie Moate







This information is provided by RNS
The company news service from the London Stock Exchange
 
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