December 19, 2006
MOLINS PLC
SANDIACRE ROSE FORGROVE & TRADING UPDATE
Sandiacre Rose Forgrove
Molins PLC, the international specialist engineering group, completed the sale of its Sandiacre Rose Forgrove packaging machinery business (“SRF”) to Hayssen Europe Limited and Hayssen Inc. (together “Hayssen”) for £3m in cash, on 18 December 2006. The sale was announced on 28 November subject only to the completion of information exchange and consultation with the UK based employees of SRF.
As previously stated, the Nottingham property from which SRF operates, currently leased to Hayssen, will be marketed for sale. The property has an estimated market value in excess of £4m and a book value of £1.8m.
Trading Update
The final transfer of the assembly and machining operations from Saunderton to the Czech Republic is progressing to plan and will be completed shortly. The charge for this reorganisation will be reported in the second half year’s results. As previously advised trading profits for this division are expected to be lower than in 2005.
Order intake in the Packaging Machinery division has been encouraging and the division has a strong order book for delivery in 2007. The division will deliver an increase in sales and profits in the second half of the year compared with the first half.
The Scientific Services division is expected to have sustained its progress in the year.
Enquiries: Molins PLC Tel: 01908 219000
Peter Byrom, Chairman
David Cowen, Group Finance Director
Issued by: Citigate Dewe Rogerson Tel: 020 7638 9571
Margaret George
November 28, 2006
MOLINS PLC
SALE OF SANDIACRE ROSE FORGROVE
The Board of Molins PLC, the international specialist engineering group, together with its wholly owned subsidiary Molins Richmond Inc., has today entered into a contract to sell its Sandiacre Rose Forgrove packaging machinery business (“SRF”) based in Nottingham, UK and Pennsylvania, USA. The sale of SRF is conditional on the completion of information exchange and consultation with the UK based employees of SRF, in accordance with legislation. It is expected that the sale will be completed before the end of the year. The freehold property from which SRF operates will be retained and leased to the purchaser.
The UK part of SRF is being acquired by Hayssen Europe Limited and the US part by Hayssen Inc. (collectively “Hayssen”), both being subsidiaries of Barry-Wehmiller Companies Inc., based in St Louis, Missouri, USA, for a cash consideration of £3m payable on completion. A subsequent adjusting payment will be made or received, to reflect the movement in the value of the working capital between 30 September 2006 and completion. The cash proceeds will be used to reduce the Group’s external debt. At 30 September 2006, the book value of the gross assets of SRF was £7.0m and, after deduction of liabilities to be transferred, the book value of the net assets was £4.8m. The transaction will result in a book loss of approximately £2.0m before taxation and after expenses of £0.2m. Operating losses at SRF were £1.0m in 2005 on sales of £14m and £1.2m in the nine month period to 30 September 2006 on a reduced level of sales.
As a separate transaction Molins intends to market and sell the property which is held in the books at £1.8m. The property has an estimated market value in excess of £4m.
Background on Sandiacre Rose Forgrove
SRF, which employs 130 people, comprises the businesses of Sandiacre Packaging Machinery, acquired by Molins in 1994 and Rose Forgrove, acquired from receivership in 2001. SRF is a manufacturer of vertical and horizontal form fill and seal bagging and wrapping machines and sells principally into the food and other fast moving consumer goods industries.
Reasons for the Sale
SRF operates in a very competitive segment of the packaging machinery market and the majority of its products are sold to customers who are themselves facing considerable competitive pressures, particularly in the food industry in the UK and Europe. Despite some operational improvements, current margins at SRF are not adequate to support its future development.
Barry-Wehmiller is a major supplier of packaging machinery and Hayssen is one of the world’s largest suppliers of vertical form fill and seal bagging machines. It already has a sales and service operation in the UK. The merged business will be better able to exploit economies of scale.
Molins Packaging Machinery division
Following the sale of SRF the division will comprise ITCM, Langen, Langenpac and Cerulean Packing. Together these businesses had sales in 2005 of £30m and generated operating profits of £2.3m.
Unlike SRF, the focus of these businesses is on high value-added engineering solutions, building on their skills and capability in delivering complex projects, supported by a range of core products in which the Group continues to invest. There is greater potential for growth in these areas as customers continue to out-source their engineering requirements and the scope for differentiation in these market areas is also greater.
Within these businesses order intake in the first ten months of 2006 has been 70% higher than in the same period last year, with the benefit of some large integration projects. The division has a strong order book for delivery in 2007.
MPM continues to invest in people, products and infrastructure to accommodate the growth in the businesses. In 2007 Langenpac will move into leased premises that will be built to its specification, giving it 50% more space, and ITCM will extend its premises by increasing the size of its workshop by 50%.
Enquiries: Molins PLC Tel: 01908 219000
Peter Byrom, Chairman
David Cowen, Group Finance Director
Issued by: Citigate Dewe Rogerson Tel: 020 7638 9571
Margaret George
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