Hampson Industries PLC

Interim Management Statement

 

Hampson Industries PLC (“Hampson” or “the Group”), the international aerospace and precision engineering group today issues its first Interim Management Statement as required by rule 4.3 of the Disclosure and Transparency Rules of the UK Listing Authority.

 

Aerospace

 

Demand in the Group’s core aerospace markets remains very buoyant.  The period from 1 April to 30 June 2007 was the best second calendar quarter ever for aircraft order intake in the commercial aerospace market.  At the end of June, the combined order book of the large commercial aircraft manufacturers stood at an all-time high of 5,699 aircraft, an increase of 37% compared to the same position last year.  At current rates, this represents over six year’s worth of aircraft production, which is a record for the industry.

 

Large aircraft engine orders also stood at a record level at 30 June 2007, with an increase of nearly 2,800 engines (34%) compared to the same position last year.  This figure does not take into account a further 500 aircraft recently ordered for which engines have yet to be specified.  Demand from our military aerospace customers has also remained strong in the period and additionally sales of anti-ballistic transparencies for fitment to armoured US military vehicles have increased significantly.

 

Production of the Eclipse 500 Very Light Jet is starting to increase progressively although it is likely that deliveries of aircraft to customers by Eclipse Aviation in 2007/08 will be lower than previous guidance.  The Group has in place processes to mitigate the financial consequences of any such shortfall.  The Eclipse order book remains strong and is reported at just under 2,700 aircraft, including orders and options.

 

Against this positive market background, both the Aerospace Components & Structures and Composites & Transparencies divisions generated improved results compared to the same period of the previous year.  With the exception of the Eclipse programme, results in these businesses have also been ahead of management expectations to date.  In particular, Composites Horizons Inc. which was acquired in January 2007, continues to trade strongly, performing at better than expected levels.

 

Specialist Engineering

 

Market demand for automotive turbochargers remains solid.  Operational improvement activities have been on-going throughout the period and this has resulted in some additional costs.  Together with new programme starts, this has created short term loss of efficiency.   Although results for the division have therefore fallen below management expectations to date, significant improvements are expected to be seen in the second half. 

 

The disposal of the non-core Precision Industrial division for a consideration of £3.97 million was announced on 27 June 2007. For the period in the current year up to the date of disposal, the division reported a small trading loss.

 

Outlook

 

Demand in the global commercial aerospace market is expected to remain strong for the foreseeable future with OEM production rates continuing to rise.  Military aerospace demand is also expected to remain robust.  Against this background, the Group’s principal aerospace businesses have started the year strongly and are expected to continue to perform at these levels for the rest of the year.  The Group’s order book remains strong and the Board will continue to pursue opportunities for further growth.  Results for the automotive turbocharger business are expected to show progressive improvement throughout the remainder of the year with a marked improvement in the second half.

 

Average dollar/sterling exchange rates used to translate the Group’s US dollar-derived trading profits in the year to date have weakened by approximately 5% compared to the average rate used for the year ended 31 March 2007.  As with other UK companies with North American interests, the sterling value of the Group’s results will therefore be impacted accordingly if rates continue to prevail at these levels for the balance of the current year.

 

Ends.

 

Further information:

 

Kim Ward, Chief Executive                                                         +44 (0)1384 472941

Howard Kimberley, Finance Director                                            +44 (0)1384 472946

Jonathan Gollins/Marylene Guernier, M:Communications               +44 (0)207 153 1269

 

About Hampson:

 

Hampson Industries PLC is listed on the main market of the London Stock Exchange (Symbol: HAMP).  The Group’s operations are structured into three segments, operating from 14 manufacturing facilities spanning three continents.   Through its international operations, the Group provides leading-edge, fully-integrated engineering and manufacturing solutions for:

 

·         Advanced aero structural components and assemblies

·         Performance-critical components for gas turbine engines

·         Close tolerance components & rotating assemblies for automotive turbochargers

·         Precision tooling systems for large, composite aero structures

 

Approximately 85% of the continuing Group’s sales are derived from its aerospace activities, the balance from the specialist automotive markets. 

 

Hampson has a clear growth strategy based on both organic and external investment.  Over the last two years, the group has completed four acquisitions in the USA (Texstars Inc, Coast Composites Inc, Lamsco West Inc. and Composites Horizons Inc) as well as invested $20m in a new purpose-built aerospace assembly and high speed machining cell to support the revolutionary new Eclipse 500 Very Light Jet programme, to which it is one of the major supply partners (www.eclipseaviation.com).  

 

Recent investment in a new manufacturing facility in Bangalore is a core element of the Group’s growth strategy and marks Hampson’s commitment to developing a centre of manufacturing expertise on the Asian continent.

 

The Hampson group employs over 1,700 people worldwide.  For more information on Hampson: www.hampsongroup.com

 

This announcement contains forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as anticipate, target, expect, estimate, intend, plan, goal, believe, will, may, should, would, could or other words of similar meaning. Undue reliance should not be placed on any such statements because they speak only as at the date of this document and, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and Hampson's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements.

 

There are a number of factors which could cause actual results to differ materially from those expressed or implied in forward looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are, increased competition, the loss of or damage to one or more key customer relationships, changes to customer ordering patterns, delays in obtaining customer approvals for engineering or price level changes,  the failure of one or more key suppliers, the outcome of business or industry restructuring, the outcome of any litigation, changes in economic conditions, currency fluctuations, changes in interest and tax rates, changes in raw material or energy market prices, changes in laws, regulations or regulatory policies, developments in legal or public policy doctrines, technological developments, the failure to retain key management, or the key timing and success of future acquisition opportunities or major investment projects.

 

Hampson undertakes no obligation to revise or update any forward looking statement contained within this announcement, regardless of whether those statements are affected as a result of new information, future events or otherwise, save as required by law and regulations.