RNS Number : 6984B
Armour Group PLC
23 February 2011
Armour Group plc
("Armour" or the "Group")
Armour Group plc, the UK's leading consumer electronics group focused on the in-car communication and entertainment and home entertainment markets is holding its Annual General Meeting at 14.00 today. George Dexter, Chief Executive, will make the following statement:-
"The start to the new financial year has been challenging for the Group with our exposure to a weak retail sector and the poor December weather impacting our trading performance.
In response to the difficult retail trading environment, the Group has taken action to lower its operating cost base through planned expenditure saving programmes including the re-organisation of its Home division and a reduction in the overall headcount within the Group, which has fallen from 310 employees to 265 over the last six months. In conjunction with the cost reduction initiatives, we have also looked to improve our gross profit margins through reducing the manufacturing cost of our products and selective price increases, the first of which were implemented in January 2011. We believe that these actions taken will improve the performance of the Group. However, there also needs to be a more sustainable recovery in consumer confidence that supports growth in both the electrical retail and the house building markets before the Group enjoys the full benefits of the actions taken to improve the trading performance.
On a more positive note, Armour Automotive has experienced a strong recovery in its OEM sales channel in the first five months of the year, driven on by buoyant demand in the agricultural vehicle market and for its GPS/GSM antenna range of products. Our business operations in the Far East are also trading comfortably ahead of last year. The new China assembly facility, which we set up in the last quarter of 2009, is now operational and has enabled us to secure new business with major retailers. As with any new venture, particularly one overseas, there have been teething problems in the set-up phase and we expect the operation to be a net cost to the Group in 2011 before moving into profit in 2012 as we build the volumes through the facility. In the Home division, there are a number of new products scheduled for launch over the coming months, the most recent new product launch being the Conran Audio iPod dock (www.conranaudio.com) which was released into the market on 16 February to excellent reviews.
The economic recovery remains fragile, particularly in the retail and house building markets, both of which are core to the Group's trading operations. Whilst the Board expects the automotive OEM business and our operations in the Far East to continue to expand, it is cautious as to the prospects for our UK based sales into the retail and house building markets for the remainder of the current financial year. The Board's believes that it has the correct strategy in terms of brands, products and markets; it has taken the necessary steps to put in place a lower cost operating base; and that as and when the recovery in our core markets takes a firmer hold, the Group performance will improve commensurately."
George Dexter Armour Group PLC Tel: 01892 502700
Geoff Nash / Ben Thompson finnCap Tel: 020 7600 1658
Stephen Norcross (corporate broking)
Trevor Bass Threadneedle Communications Tel: 020 7653 9850
23 February 2011
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