Trading Update and Disposal
03 Abril 2001 - 6:00AM
UK Regulatory
RNS Number:5470B
TGI PLC
3 April 2001
TGI plc
("TGI" or "the Group")
Trading Update and Disposal
Trading Update
The Board of TGI announces that it expects results for the
year ended 31 March 2001 to be below current market
forecasts.
A combination of soft trading conditions in a number of its
principal markets has produced a sales shortfall at some of
the Group's operations in the final quarter of the financial
year.
At the time of the Group's interim results in December 2000,
the Board indicated that trading conditions for the Group's
Automotive business remained difficult, not least the impact
of the continued strength of sterling against the Euro and
sterling's weakness against the dollar. The Group also
warned that major changes in the profile of its automotive
customer base would have an adverse impact on volumes in the
short term. This situation has persisted into 2001 and
necessitated further management action to address the cost
base. Despite this action the financial performance of the
Automotive business was disappointing.
Sales at Audix, the Group's public address business, were
impacted by the deferral of a number of contracts in the
closing months of the year.
Although our Professional and Hi-Fi businesses, Tannoy and
Martin Audio, completed a year of strong and profitable
growth, sales growth in the final quarter of the year fell
below earlier expectations as the overall market tightened.
Again, the strength of sterling impeded progress in Europe.
The July 2000 acquisition of Lab Gruppen, a Swedish based
digital amplifier specialist, has proved to be very
successful with results in the period exceeding
expectations. Lab Gruppen will make a significant first
year profit contribution.
As a result of the softness in sales the Board expects that
operating profit from continuing operations and acquisitions
for the year ended 31 March 2001 will be around #2.0m.
After taking into account the impact of the #1.85m goodwill
charge arising on the disposal of Audix (which is discussed
in more detail below), the Group expects profit before tax
for the year ended 31 March 2001 to be around break-even.
This charge for goodwill is a non-cash item and has
previously been charged against Group reserves.
The Board intends to maintain the level of the final
dividend at 2.6p.
Disposal of Audix
TGI announces the sale of Tannoy Audix Systems Limited
("Audix") to Tyco Electronic Product Group, part of the Tyco
International Limited Group ("Tyco") for an aggregate cash
consideration of #900,000.
Audix designs, supplies and commissions industrial public
address systems and the Board believes the business is no
longer central to TGI's strategy of focussing on its
international branded Professional and Hi-Fi businesses.
Consideration for the sale was #1, together with the
repayment of inter-company debt of #899,999. The cash
proceeds of the sale, totalling #900,000, will be used to
reduce the Group's borrowings.
For the year ended 31 March 2000 Audix reported turnover of
#2.4m, a loss before taxation of #111,000 and had net assets
(excluding bank borrowings and inter-company debt) of
#732,000 at that date.
TGI is not selling any of the rights to the Tannoy brand
name as part of the transaction and Tyco will be changing
the name of the Audix business.
Enquiries
TGI plc 023 9249 2555
Nigel Hamilton, Chief Executive
Peter Russell, Finance Director
Square Mile BSMG Worldwide 020 7601 1000
Kevin Smith
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