Hampson Industries has forecast an increase in tooling revenue during the second half of the year but said that trading conditions were likely to remain difficult.
In an interim management statement covering the period since 31 March 2009, the group reported a total debt of £152m but said it expected this figure to decrease steadily during the second half of the year.
The UK engineering company, which recently dissolved HAML, its non-core machining operations, claimed that net debt would be offset by strong demand for both initial and production rate tooling, which was 40 per cent up on last year at $400m (£243m).
Nevertheless, the group said that delays to customer engineering processes and cash flow management were having an adverse affect on its larger orders, particularly for the B787, the A350 and the F-35 programmes.
Despite these delays, military and aerospace component demand has remained strong, increasing revenue for the group’s composite components businesses by around 10 per cent compared with the same period a year earlier.
However, commercial aerospace demand has fallen, with the group reporting ‘significantly lower volumes’, while its Automotive Turbocharger division performed slightly ahead of management expectations.
Looking ahead, the group said: ‘Although the timing of order placement remains difficult to predict, present customer indications, the unprecedented scale of new work in the pipeline and known programme manufacturing and assembly requirements all point to an increase in tooling revenue during the second half of the current year, continuing at a strong level into 2010-11.
‘The board therefore remains confident that, in spite of the short-term uncertainty arising from delays to major programmes, the group is well positioned to convert the opportunities available into attractive returns for shareholders.’