Synnovia PLC Trading Statement (4057Q)
19 February 2019 - 6:00PM
UK Regulatory
TIDMSYN
RNS Number : 4057Q
Synnovia PLC
19 February 2019
Synnovia plc
(the "Company" or the "Business" )
Trading Update
Synnovia plc (AIM: SYN), the specialist manufacturer, provides
an update on trading for the financial year to date and announces
that it expects trading for the financial year ending 31 March 2019
to be broadly in line with market expectations.
Overall Trading
Revenue has continued to grow strongly, but this has not yet
translated into the profitability growth that we expected. In part
this is due to our ongoing hedging policy, which has negated an
improvement that would have arisen from the US$ strength versus
sterling over the period. It has also arisen because of cost
pressures and unforeseen minor delays to the addition of new
capacity in our Films Division. The Industrials Division has
continued to perform well.
Industrial Division
Bearings sales have grown significantly over recent months,
exceeding management's expectations and this growth is expected to
continue over the next few months. We continue to add new business
and are considering future capacity expansion through a move to a
new production facility in Thailand.
Matrix activities continue to make good progress over prior year
in line with our strategy of getting "closer to the customer" and
broadening the range of die-cutting and die-making consumables that
we have to offer. We have restructured our management team in China
to strengthen our sales and operational capability there. We have
also implemented a series of improvements to strengthen performance
of our US distribution business.
Mandrel sales have recovered somewhat from the temporary
reduction that we experienced in Q2/Q3 of the financial year,
partly driven by new business wins. We are adding further capacity
to our US operations so that more production can be transferred
from the UK to the US over the course of the next financial
year.
Film Division
The Films Division is having a challenging year coping with
capacity constraints during the year, continuing strong growth and
as management continue to integrate the three former separate
businesses. Revenues in the Film Division have so far increased by
10% and in parallel we have implemented significant projects to add
capacity and capabilities, including additional extrusion lines, an
eight-colour printing press, new conversion machines, recycling
equipment and warehousing infrastructure. All this should put us in
a very good position for continued sales growth.
There have been some delays and teething problems with these
projects which we expected to be largely complete in Q3 of the
current financial year. However, most of these projects are now
expected to conclude in Q4. Meanwhile, staff levels and training
have been increased, whilst sales conversions have been held back
until the capacity is in place. Costs have therefore risen ahead of
revenue, negatively impacting profitability.
Commenting, Faisal Rahmatallah, Chairman, said:
"Significant organic growth continues to be achieved across both
our Divisions. We continue to implement a programme which adds
capacity to fulfil this demand and to enable future growth
thereafter. Relatively small delays to this programme have been
experienced in the Films Division and will restrict profit growth
in the current financial year. Except for this disappointment we
are satisfied with the progress the Company is making this
year.
The change of the Company's name to Synnovia plc has seen a
smooth transition and is acting as a strong signal to our
organisation to do everything reasonably possible to reduce,
recycle and re-use plastic waste.
Overall, we anticipate that our financial performance over the
second half of the financial year will enable us to announce
results that are broadly in line with market expectations."
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
For further information, please contact:
Synnovia plc Tel: 020 7978 0574
Faisal Rahmatallah, Executive
Chairman
Nick Ball, Finance Director
Cenkos Securities Tel: 020 7397 8900
(Nomad and joint broker)
Mark Connelly
Callum Davidson
Allenby Capital Limited Tel: 020 3328 5656
(Joint broker)
David Hart
Notes to Editor
Synnovia is a specialist manufacturer of industrial components
and consumables. Applications for these products vary widely and
examples include:
-- Packaging for the food manufacturing and distribution - films, sacks and pouches
-- Steering columns and instrument control knobs in the
automotive industry - plastic ball bearings
-- Hydraulic and industrial rubber hose manufacture - various types of plastic mandrel
-- Cardboard box manufacture - plastic creasing matrices
Synnovia's business model is based on understanding customers'
problems in depth, and then developing and mass producing
proprietary, technical solutions for these problems.
The Business operates through two divisions, Films and
Industrial, and has the majority of its production in six UK based
factories, with a further three factories in Asia. Approximately
50% of its GBP83 million sales are made outside the UK to more than
80 countries.
Further information can be found on www.synnovia plc.co.uk
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
TSTEAKAPFSENEFF
(END) Dow Jones Newswires
February 19, 2019 02:00 ET (07:00 GMT)
Synergia Energy (LSE:SYN)
Historical Stock Chart
From Apr 2024 to May 2024
Synergia Energy (LSE:SYN)
Historical Stock Chart
From May 2023 to May 2024