Umeco has announced that it expects its operating profits to fall by at least £1.7m in the first half of the financial year as a result of lowering demand.
The Warwickshire-based company, which supplies composite parts for Formula One, wind energy and aerospace applications, reported a 2.8 per cent increase in revenue between 1 April 2009 and 28 July 2009 over the same period last year.
Order intake was in line with revenue, with the order book at £221.3m compared with £218.9m at the end of the last quarter. However, total debt at the end of June stood at £130.2m compared to £120.2m at the end of March.
The company’s modest growth combined with weak sales in its composites division, has led it to lower this year’s first-half operating profit expectations to between £13m and £14m, compared with profits of £15.7m in the first half of last year.
Regional and business jet, wind energy, motor sport and automotive markets were highlighted as particularly depressed with sales from the Formula One sector affected by uncertainty over racing team budgets.
The group, which is also active in supply-chain services, reported that management actions to improve working capital ratios were on track to provide a ‘significant’ reduction in net debt by the end of March 2010. It added that it continues to cut its cost base as a result of volatile market conditions.