RNS Number : 4595E
Armour Group PLC
07 April 2011
Armour Group plc ("Armour" or the "Group")
Armour, the UK's leading consumer electronics group focused on the in-car communications and entertainment and home entertainment markets, today issues the following trading update:
The current trading performance of the Group is being adversely affected by the weak UK economic environment. Market conditions in the Group's core UK retail sales channels, which account for 60% of total Group sales, are difficult and have deteriorated significantly over the last six weeks. Consumer demand and confidence has weakened, which has directly impacted the Group's trading performance. With the expectation that demand in the UK consumer electronics market will continue to be weak for the remainder of this year, the Group is reviewing its forecasts and now expects to report a loss for the full year to 31 August 2011.
Whilst the UK retail sales channel is challenging, the Group's non-retail automotive business has delivered record growth for the first six months of the year with sales increasing by 74%. In addition, the Group's Nordic and Asian operations have continued to make encouraging progress with sales up by 22% on the prior year comparatives.
In response to the difficult UK retail trading environment, the management are taking the appropriate actions to mitigate the downside impact on the Group's financial performance. These actions include a strategic review of our current activities and initiatives, cost and stock reduction as well as a re-structuring with a view to sizing the Group appropriately in the context that the current weak retail market conditions may persist well into 2012.
The Group agreed new lending facilities in December 2010 with GE Commercial Finance Limited. These facilities provide variable funding based on the levels of sales and inventory. The Group has maintained, and expects to continue to maintain, a comfortable headroom margin within these facilities. In addition to the new lending arrangements, the Group completed a £2m equity fund raising on 23 February 2011. The Board is confident that the combination of the new lending facilities together with the new equity raised will provide sufficient financing facilities to manage the Group through the current economic downturn.
The Board believe that the response and actions being taken by the management to the further weakening in the UK retail environment will, even at much reduced revenue levels, return the Group to profit in the year to 31 August 2012. A full trading update will be given with the interim announcement which is expected to be made in early May.
George Dexter Armour Group PLC Tel: 01892 502700
Geoff Nash FinnCap Tel: 020 7600 1658
Trevor Bass Threadneedle Communications Tel: Tel: 020 7936 9666
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