1 February 2012 – trading update
The company has provided a trading update for the full year to 31 January 2012. Sales and profits for the year are likely to be towards the lower end of market expectations. Elektron has continued to build its product development capabilities at its new Technology Centre in Cambridge and to invest in new growth opportunities. UK operations are being streamined further and three major leased sites are being closed and consolidated.
The office in Romford has been closed and its activities have transferred to Cambridge and Stansted. The existing factory in Torquay will become the company’s new UK centre for high tech manufacturing. Activities at the Redhill and West Molesey factories will relocate to Torquay as the leases on the sites expire. This is expected to yield savings in occupancy costs of over £0.8m per annum and overall the streamlining programme is expected to reduce costs by over of £2m per annum. The cost of streamlining the business is expected to total £4.3m over a two year period. Exceptional charges should total £3.5m, with just over half of the expense to be recorded in the financial year just ended. Although recent news has been somewhat downbeat in nature the lowly share price means that we retain our BUY rating.