RNS Number : 2387A
  Acertec PLC
  30 July 2008
   





        30 July 2008
    Acertec plc
    ("Acertec" or the "Group")


    Trading Update

    Trading by Acertec's Stadco division during the first half has continued in line with the expectations as outlined in the trading
statement of 20th May. Slightly increased turnover has been subject to some pressure on margins, leading to a reduced trading result by
comparison to the same period last year. 

    Within BRC, trading in Asia has been well up on prior year as has that in the Irish joint venture, BRC McMahon. 

    In BRC UK the first half has been very disappointing overall. A very significant factor has been the disruption to planned supply from
one of BRC's major suppliers of rebar. Acertec believes that the supplier has failed to honour an agreement on the basis of which BRC has
entered a number of fixed price sales contracts. Litigation has been initiated in this dispute but, in the meantime, BRC is satisfying its
rebar requirements for these sales contracts by purchasing steel in the market, which has seen unprecedented price rises this year. 

    Following their appointments in May and June 2008 respectively, Jonathan Cook, Group Finance Director and David Hussey, Chief Executive,
have been undertaking a thorough review of the Group's operations. As a result of this review, the Group's results for the first half of
2008 will also reflect several one-off provisions. 

    Trading conditions in the UK construction industry are likely to be difficult in the second half of 2008 for well publicised reasons.
Also, while Acertec is confident of a successful outcome to the rebar dispute, it is unlikely that a resolution will be reached in 2008.
Reported group profits for 2008 are therefore expected to be substantially short of market expectations. 

    The Group's actuaries are currently reassessing the position of the Group's closed defined-benefit pension schemes. Initial indications
are that the deficit on these schemes has increased significantly since 31st December 2007. This is due primarily to the decline in value of
the quoted investments held by the schemes and to a reassessment of the underlying assumptions relating to mortality.

    Joint-Venture Project with Gestamp Automocion SL

    In April 2007 Acertec announced the creation of 50/50 joint venture with Gestamp Automocion SL to develop the first dedicated
body-in-white stampings and assembly facility in Russia. This project, in St Petersburg, is progressing well with the new factory expected
to be completed on time and on budget and production expected to start, as planned, at the beginning of 2009.  
      
    Initial funding for the joint venture has been provided by Gestamp. Acertec has reviewed expected investment returns and its funding
requirements in relation to the joint venture and concluded that it is not in shareholders' best interests to continue funding the project.
It has therefore been agreed that Gestamp will complete the funding and assume majority control of the project.  
       
    Stadco will continue to benefit from supplying and managing the project on the terms of a management agreement, and will retain a 10%
equity stake to take account of its contribution to date.
      
       
    - Ends -






    Enquiries:
 Acertec plc                              01789 403070
 David Hussey, Chief Executive
 Jonathan Cook, Group Finance Director 

 Hawkpoint Partners Limited              020 7665 4500
 David Renton

 Weber Shandwick Financial               020 7067 0700
 Nick Oborne / Rachel Martin 




This information is provided by RNS
The company news service from the London Stock Exchange
 
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