Interim Results

600 Group PLC 22 November 2006 22 November 2006 THE 600 GROUP PLC INTERIM RESULTS FOR THE 26 WEEKS TO 30th SEPTEMBER 2006 CHAIRMAN'S STATEMENT Market conditions During the first half of our financial year, our UK and USA markets continued the positive trends seen at the end of last year while other European markets experienced varying degrees of recovery. Results The Group's underlying order intake in the first half was ahead of last year with significant improvements from our operations in the UK and South Africa. The outstanding order book for the second half is very strong due principally to the major contracts received last year to supply Mitsui Seiki machines to the UK aerospace industry. Revenue grew by 8% from £34.4m to £37.2m with increases in most geographic areas. Notwithstanding the increased sales and marketing expenses associated with the development of the Group (as outlined by Andrew Dick in our last Annual Report), the Group was able to reduce its operating loss from £1.0m to £0.6m as the margin benefits resulting from the increased turnover started to come through. Net financing income (principally related to the Group's pension scheme) was stable at £0.9m, generating a profit before tax of £0.3m compared with a loss of £0.1m last year. Net funds at the period end were £3.5m compared with £4.0m for the corresponding period end last year and £5.8m at the end of the financial year. The cash outflow during the first half was due principally to the phasing of working capital movements. Dividend The board does not yet consider that the results allow the payment of a dividend. People John Fussey will be retiring as Group Finance Director at the end of December when he will be succeeded by Martyn Wakeman who joined the board at the beginning of October. As I have been Chairman for 14 years and with the transition from Tony Sweeten to Andrew Dick as Group Chief Executive successfully accomplished, my fellow directors are now in the process of appointing my successor, with the intention that I should retire from the board on his appointment as Chairman. Outlook In the likely absence of any major changes in our principal markets, the medium term outlook for the Group is dependent on the implementation of our development plans coupled with further improvements in our machine tool supply chains. During the first half of the year we have made significant improvements to our machine tool selling organisations in North America and the UK and further improvements are planned during the second half of the year in continental Europe. Additional outsourced supply of lathes is now in place with deliveries due to commence within the next few months. Our laser marking business has also strengthened its USA selling operation and has continued the expansion and improvement of its product range with the launch of new technologically advanced products. These actions will start to have a positive impact on the Group's performance during the second half of the year. Michael Wright Chairman 22 November 2006 Enquiries: The 600 Group PLC Andrew Dick, Group Chief Executive John Fussey, Group Finance Director Telephone: 0113 277 6100 Hudson Sandler Nick Lyon Telephone: 020 7796 4133 Consolidated income statement (unaudited) 26 weeks to 26 weeks 52 weeks 30.09.06 to 01.10.05 to 01.04.06 £000 £000 £000 Revenue 37,158 34,435 70,993 Operating loss before restructuring costs (622) (992) (1,410) Restructuring costs - - (1,876) Operating loss before financing costs (622) (992) (3,286) Net financing income 877 854 1,567 Profit/(loss) before tax 255 (138) (1,719) Income tax (charge)/credit (note 2) (97) 22 (429) Profit/(loss) for the period 158 (116) (2,148) Attributable to: Equity holders of the parent 89 (150) (2,196) Minority interest 69 34 48 Profit/(loss) for the period 158 (116) (2,148) Earnings per share - basic and diluted (note 3) 0.2p (0.3)p (3.9)p Consolidated statement of recognised income and expense (unaudited) 26 weeks to 26 weeks to 52 weeks to 30.09.06 01.10.05 01.04.06 £000 £000 £000 Foreign exchange translation differences (1,039) 693 893 Net actuarial (losses)/gains on employee benefit schemes (1,280) 1,200 9,244 Revaluation of properties - - 3,397 Deferred tax on above items 384 - (3,010) Net (expense)/income recognised directly in equity (1,935) 1,893 10,524 Profit/(loss) for the period 158 (116) (2,148) Total recognised (expense)/income for the period (1,777) 1,777 8,376 Attributable to: Equity holders of the parent (1,756) 1,741 8,295 Minority interest (21) 36 81 Total recognised (expense)/income for the period (1,777) 1,777 8,376 Summarised consolidated balance sheet (unaudited) At 30.09.06 At 01.04.06 At 01.10.05 £000 £000 £000 Non-current assets Property, plant and equipment 13,477 14,203 11,476 Intangible assets 2,174 2,072 2,764 Investments 84 84 84 Employee benefits 7,060 7,400 - Deferred tax assets 303 303 681 23,098 24,062 15,005 Current assets Inventory 21,573 21,147 22,725 Trade and other receivables 17,054 15,740 14,273 Cash and cash equivalents 5,557 7,657 5,785 44,184 44,544 42,783 Total assets 67,282 68,606 57,788 Non-current liabilities Employee benefits (2,146) (2,281) (3,626) Deferred tax liability (2,715) (3,003) (945) (4,861) (5,284) (4,571) Current liabilities Trade and other payables (15,226) (14,633) (12,202) Income tax payable (83) (134) (26) Provisions (465) (388) (438) Loans and other borrowings (2,057) (1,809) (1,758) (17,831) (16,964) (14,424) Total liabilities (22,692) (22,248) (18,995) Net assets 44,590 46,358 38,793 Shareholders' equity Called-up share capital 14,212 14,212 14,212 Reserves 30,006 31,753 24,222 Total equity attributable to equity holders of the parent 44,218 45,965 38,434 Minority interest 372 393 359 Total equity 44,590 46,358 38,793 Summarised consolidated cash flow statement (unaudited) 26 weeks 26 weeks 52 weeks to 30.09.06 to 01.10.05 to 01.04.06 £000 £000 £000 Cash flows from operating activities Profit/(loss) for the period 158 (116) (2,148) Adjustments for: Amortisation of development expenditure 54 - 67 Depreciation 622 832 1,640 Impairment of goodwill - - 1,254 Net financial income (877) (854) (1,567) Profit on disposal of plant and equipment - - (26) Equity share option expense 9 16 31 Income tax expense/(income) 97 (22) 429 Operating profit/(loss) before changes in working capital and provisions 63 (144) (320) (Increase)/decrease in working capital (1,976) 946 3,699 Decrease/(increase) in employee benefits 20 (970) (1,006) Cash generated from the operations (1,893) (168) 2,373 Interest paid (56) - (170) Income tax (paid)/received (56) 86 (66) Net cash from operating activities (2,005) (82) 2,137 Cash flows from investing activities Interest received - 39 199 Proceeds from sale of plant and equipment - 14 168 Purchase of plant and equipment (192) (261) (520) Development expenditure capitalised (182) - (402) Net cash from investing activities (374) (208) (555) Cash flows from financing activities Net receipt of external borrowing 1,191 5 (305) Equity dividends paid - (2,274) (2,274) Reduction in current asset investments - 346 580 Net cash from financing activities 1,191 (1,923) (1,999) Net decrease in cash and cash equivalents (1,188) (2,213) (417) Reduction in current asset investments - (346) (580) (Increase)/decrease in debt and finance leases (1,191) (5) 305 Decrease in net funds (2,379) (2,564) (692) Net funds at beginning of period 5,848 6,617 6,617 Exchange effects on net funds 31 (26) (77) Net funds at end of period 3,500 4,027 5,848 Notes to the financial information 1. Basis of preparation The 600 Group PLC (the "Company") is a public limited company incorporated and domiciled in England and Wales. The Company's ordinary shares are traded on the London Stock Exchange. The Consolidated Interim Financial Statements of the Company for the 26-week period ended 30 September 2006 comprise the Company and its subsidiaries (together referred to as the "Group"). The Consolidated Interim Financial Statements have been prepared on the basis of the recognition and measurement requirements of International Financial Reporting Standards ("IFRSs") in issue and endorsed by the EU and effective at 30 September 2006 but do not include all the information required for full Financial Statements. The Statements have been prepared using the accounting policies and presentation that were applied in the Company's published Consolidated Financial Statements for the 52-week period ended 1 April 2006, copies of which can be obtained from the Company's website. The Consolidated Interim Financial Statements do not constitute statutory accounts and are unaudited. Statutory accounts for the 52-week period ended 1 April 2006 have been delivered to the Registrar of Companies. KPMG Audit Plc, The 600 Group PLC's auditors, reported on those accounts under section 235 of the Companies Act 1985. Their report was unqualified and did not contain a statement under section 237(2) or (3) of that Act. 2. Taxation The charge for corporation tax comprises UK taxation £nil (2005: £nil), overseas taxation charge of £1,000 (2005: credit £17,000) and deferred taxation charge of £96,000 (2005: credit £5,000). 3. Earnings per share The basic earnings per share is based on the profit for the period of £89,000 (2005: loss £150,000) and the weighted average number of shares outstanding of 56,847,149 (2005: 56,846,137). For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to 56,921,107 and assumes conversion of dilutive potential ordinary shares of 73,958. In determining the diluted earnings per share for 2005, no adjustments were required from the basic earnings per share as all potential ordinary shares were anti-dilutive. 4. Interim report Copies of the interim report will be sent to all shareholders and will be available to members of the public from the company's registered office at 600 House, Landmark Court, Revie Road, Leeds, LS11 8JT. The 600 Group PLC is registered in England and Wales No. 196730. 5. Share price information Information concerning the day-to-day movement of The 600 Group PLC share price can be found by dialling 0906 003 4031 for the Financial Times share price service. The 600 Group PLC 600 House Landmark Court Revie Road Leeds LS11 8JT Telephone: 44 (0) 113 277 6100 Facsimile: 44 (0) 113 276 5600 www.600group.com This information is provided by RNS The company news service from the London Stock Exchange

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