Embargoed Release: 07:00hrs, Monday 24 November 2008
HARTEST HOLDINGS PLC
("Hartest", or "the Company", or "the Group")
TRADING STATEMENT
November 2008
Hartest Holdings plc, the specialist supplier of instrumentation and medical
equipment, today issues a trading statement. At the time of our Annual General
Meeting in August 2008, we reported that sales by Group companies were in line
with expectations, and that operating overheads were under control, whilst
margins were coming under pressure in some areas. Since then, although our
general trading performance remains sound, the widely reported deterioration in
the global economic climate, coupled with a period of extreme volatility in
currency exchange rates, including the significant weakening in the value of
the Pound Sterling against the Euro and the US Dollar, has resulted in the
Company experiencing lower sales and tighter margins in some areas of the
business during late September and October.
In spite of the prevailing economic conditions, at present the Instrumentation
businesses within the Group continue to demonstrate resilience and their
performance in aggregate remains in line with our original expectations.
However, in the Medical Services division, the loss of the Candela laser
franchise last year and competitive and currency-based pressure on margins have
led to reduced profitability and, as a result, some restructuring has been
undertaken at a cost of £155,000 in redundancy payments and inventory
write-downs.
As we progress into the second half of the year, we will be implementing
pre-planned and necessary relocations; Agar Scientific will relocate at the
termination of its current property lease, and the Hartest Precision
Instruments business will move from two separate locations onto a single site.
The move by Agar had always been expected towards the end of the current
financial year, but in the case of Hartest Precision, the early identification
of suitable premises has accelerated our plans, enabling an earlier delivery of
improved operational efficiencies and cost savings. The relocations will incur
special and non-recurring costs of approximately £700,000 within the current
financial year; however they will be offset by the generation of future annual
cost savings at Hartest Precision in excess of £200,000. The exceptional
expenditure will be funded by the Company's own resources, underwritten by the
sale in due course of the freehold of one of the vacated properties.
The Group typically experiences a strong bias in trading towards the second
half of the financial year and this year should prove no exception. Overall,
and in the face of a continuing weak global market economy, we currently
anticipate the Company will report either a slight profit or a small loss for
the year, after non-recurring charges.
-Ends-
For Further Information:
Geoff Spink Hartest Holdings Plc 01252 749 530
Chief Executive Officer
Robert Porter Hartest Holdings Plc 01252 749 530
Group Finance Director
Vikki Krause Hansard Group 020 7245 1100
Financial Public Relations
William Vandyk Blue Oar Securities 020 7448 4400
Director