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Trading Update 14 November 2008
In our Interim Management Statement (IMS) issued on 27 October we indicated that, on the basis of customer schedules at that time, we expected Group profit before tax* for the year to 31 December 2008 to be in the region of 20% lower than 2007.
However, in the last seven days there have been very significant reductions in these customer schedules which will result in our November and December production levels in Driveline and Powder Metallurgy being sharply lower. We now anticipate production in these two months to be around 20% lower than our earlier expectations, with activity levels 40% lower than in the first half.
We had already instigated actions to flex our operations through the balance of the year, with many of our automotive operations closing for the year from around the second week in December. Further opportunities for cost reduction in this short timeframe are therefore limited and we are currently reviewing the likely impact on profits for the current financial year. Further guidance will be provided as soon as possible.
Our OffHighway and Aerospace businesses are continuing to operate as previously anticipated and are expected to show strong year on year growth in both sales and profits.
As set out in the IMS of 27 October, the Group’s financial position remains strong despite these challenges.
* Note: In this statement reference to profit before tax is before restructuring and impairment charges, amortisation of non-operating intangible assets and other non-cash charges arising on business combinations, profits and losses on sale or closure of businesses and changes in fair value of derivative financial instruments.
Cautionary Statement
This press release contains forward looking statements which are made in good faith based on the information available to the time of its approval. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a number of risks and uncertainties that are inherent in any forward looking statement which could cause actual results to differ materially from those currently anticipated.
For further information:
Investors:
David Rood
T: +44 (0)207 463 2382
Media:
Andrew Lorenz
Financial Dynamics
T: +44 (0)20 7269 7113
M: +44 (0)7775 641 807
www.fd.com
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