from auto parts manufacturers
Thursday 1 May 2008
Tomkins, the global engineering and manufacturing group, sets out below its Interim Management Statement in relation to trading to date for the 2008 financial year.
The Company’s Annual General Meeting will be held today at 11.00 a.m. at the Queen Elizabeth II Conference Centre, Broad Sanctuary, Westminster, London SW1P 3EE.
James Nicol, Chief Executive Officer, commented:
“Tomkins’ performance to date has been resilient. Our managers continue to take steps to mitigate the continuing US headwinds and to offset the impact of rising commodity prices through global sourcing, lean initiatives and price increases to our customers. Our businesses have continued to grow in emerging markets and we have seen strong demand in the global industrial sector. Good progress has been made in our stated Group priorities, including the three-year performance improvement programme, and we have made two bolt-on acquisitions and a joint venture in high-growth markets since the beginning of the year.”
Performance year to date
Industrial & Automotive (”I&A”)
I&A performed in line with expectations during the early months of the year. The business generated good growth in the global industrial and agricultural businesses. I&A’s performance in the oil and gas markets was bolstered at the beginning of March by the acquisition of A.E. Hydraulic (Pte) Ltd., a provider of hydraulic and industrial hose solutions and services for the oil exploration industry in Asia. Latin America, India and China continue to contribute to the overall performance of the I&A business. Stackpole, now a part of the Gates business, formed a joint venture with Halla Group of Korea, which will enable it to enter the attractive Asian markets with a local partner and grow the business through their combined expertise. The positive momentum in emerging markets is offsetting weaker demand from North American automotive equipment manufacturers. The Schrader Electronics business announced a contract to supply breakthrough technology for fuel level sensors to BMW Motorcycles.
Building Products (”BP”)
Air Systems Components (“ASC”) saw a steady performance in the North American non-residential construction market. ASC continues to make good progress with its expansion plans in India and announced the acquisition of a controlling stake in Rolastar, a duct profile manufacturer. BP saw a number of contract wins, including two awards for infrastructure projects in Australia and the Middle East. BP’s residential businesses continue to be impacted by the declining US residential housing market and management is taking the required actions to mitigate the impact on performance.
Financial position (unaudited)
There has been no material change in the financial position of the Group during the period. As at 29 March 2008, the Group’s net assets were $2,335.4 million (29 December 2007: $2,254.8 million) and its net debt was $682.6 million (29 December 2007: $591.5 million).
Change of reporting currency
As indicated in the 2007 Preliminary Results Announcement, the Group’s reporting currency was changed from Sterling to the US Dollar with effect from the beginning of 2008. The Group’s primary financial statements and business segment information for 2007, originally reported in Sterling, have been translated into US Dollars and are provided in a separate press release published today.
Outlook for 2008
The majority of the end markets the Group sells into remain reasonably robust, with particular strength in the global industrial and agricultural markets. However, since the date of our results some of the Group’s end markets have weakened further. North American automotive production is now expected to be at 14.1 million units for 2008 compared to the original outlook of 14.4 million units. The US residential housing market continues to soften and US housing starts are now expected to be at around 0.9 million units for 2008, compared to the original outlook of just over 1.0 million units. Our internal action plans are progressing well and accordingly the Group’s outlook for 2008 remains in line with the outlook communicated in the 2007 Preliminary Results Announcement.
Notes to editors
Tomkins is a global engineering and manufacturing group with market and technical leadership across two business groups: Industrial & Automotive and Building Products. Tomkins plc’s ordinary shares are listed on the London Stock Exchange under the symbol TOMK and also trade in ADR form on the New York Stock Exchange under the symbol TKS.
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