Overview
Alumasc performed strongly in 2007/08, demonstrating the benefits of realigning its business during the previous year towards markets with stronger prospects for growth.

In financial terms, its performance was ahead on all relevant criteria, including revenue from continuing operations 21.4% higher at £125.8 million (2007: £103.6 million) and underlying profit before tax1 of £9.6 million, 52% ahead on the same basis. The growth in revenue and profit arose in the group’s core business areas, where long term growth prospects remain encouraging. total pre-tax profit of £10.0 million was also ahead of the prior year figure of £9.0 million, which included an exceptional contribution from Brock Metal, sold at the prior year end.

The drive into sustainable building products brought benefits from both acquisition and organic growth in the year and resulted in Building Products divisional revenue of £83.5 million and underlying operating profit1 of £10.7 million rising by 40% and 54% respectively.

The promising prospects for this sector are founded on a combination of economic and environmental considerations, which have been further enhanced by recent surges in the cost of energy.

Our Engineering Products division performed at a similar level to the prior year, with revenues of £42.3 million, 4% lower, and underlying operating profit1 unchanged at £1.7 million. As the year progressed, Alumasc Dispense showed the benefits of consolidating its business onto a single site. Alumasc Precision’s performance was weaker than expected, with the wide range of new projects not fully replacing maturing automotive work. However, the growth of work with newer customers in the second half year provides confidence that the strategic advances of recent years will continue.

Following the increased dividend in the prior year, the Directors raised the interim dividend by 0.15p per share (4.8%) in April 2008. The Board is now recommending that the final dividend be increased by a further 0.15p per share to 6.75p, giving a total for the year of 10p per share (2007: 9.7p per share), an increase of 3.1%.

Development
Levolux, the UK’s leading supplier of solar shading products, was acquired for £13.5 million in May 2007, adding significantly to the group’s presence in the sustainable building products arena, and consistent with the Board’s strategy to focus the group’s business on high performance building and engineering activities. Levolux has performed superbly during its first full year within Alumasc, encouraging the group to continue its quest for organic and acquisition growth in this sector.

In March 2008, Alumasc acquired Blackdown Horticultural Consultants, a leading supplier of green roofs, for £2 million. Blackdown specialises in supplying lightweight roofs, which complement Alumasc’s existing presence in the more intensive range of living roof systems, combining to form the UK’s leading supplier of green roofs.

Three freehold properties were disposed of during the year. The site previously occupied by Alumasc Dispense prior to its relocation to Kettering was sold for £1.6 million, the former Copal warehouse was sold for £0.7 million, and the site occupied by Brock Metal, retained on the sale of that business in June 2007, was transferred as a special contribution to the group’s pension funds at a value of £1.1 million.

Net debt reduced from £12.9 million at the start of the year to £9.4 million at the end, representing gearing of 30%. The group remains in a strong position to finance further development opportunities that may arise.

Board
Martin Rhodes resigned from the Board in June 2008. An exercise to align the Board’s nonBoard
Martin Rhodes resigned from the Board in June 2008. An exercise to align the Board’s non-executive team more closely with its strategic direction is under way.

Prospects
The year to June 2008 ended on a strong note for Alumasc, reflecting growing demand for the group’s products and their resilience in the face of some negative external factors such as rising material and energy costs.

While it would be unrealistic to expect the industries served by Alumasc to be unaffected by the general economic situation, the group has purposefully positioned itself to benefit from areas where demand is expected to grow. As we enter the new financial year with a strong balance sheet and order books higher than a year ago, we remain confident in the group’s ability to perform well.

J S McCall
Chairman

Published Wednesday 10th September 2008