Trading Statement

 

TIDMHYWD 
 
RNS Number : 2148V 
Heywood Williams Group PLC 
07 July 2009 
 

 
 
 
 
7 July 2009 
 
 
Heywood Williams Group PLC 
 
 
 
 
End of Period Trading Update 
 
 
 
 
Heywood Williams Group PLC, the specialist distributor of branded building 
products, issues this regular end of period trading update for the 6 months to 
30 June 2009. 
 
 
As anticipated, the Group continues to face very difficult market conditions due 
to major declines in residential housing markets. Sales in the first half of 
2009 are expected to be down 24% compared to the same period in 2008. It is 
estimated that the residential housing markets that the Group operates in have 
declined on average by 40% since the second half of 2007. The Group has reduced 
headcount by over 35% in the same period. Net borrowings at the end of June were 
circa GBP48 million, which is better than expectations and less than 2008, 
reflecting the Group's success at managing working capital. 
 
 
In the UK/Europe, the Group designs, sources and distributes branded hardware to 
customers in the residential new build and home improvement markets with some 
sales in the commercial market. New build and home improvement activities 
reduced further across our UK/European markets in the first half of 2009, in 
addition to the significant market declines experienced in 2008. Currently, the 
Group's key markets are exhibiting signs of fragile stability, but at levels 
30-50% below that experienced in late 2007. Our management teams continue to 
work hard to outperform the market. Market share has increased and significant 
cost reductions continue to be implemented to align the cost base with the 
tougher market conditions we are now facing. Headcount has been reduced by a 
further 17% since the end of 2008, which is in addition to the 22% reduction 
made in 2008. 
 
 
In North America, the Group, through LaSalle Bristol, is a market leading 
distributor of branded building products to the manufactured housing, 
recreational vehicle and modular housing markets. Both the manufactured housing 
and recreational vehicle markets were severely depressed in the first half of 
2009. The latest industry information is that the manufactured housing market is 
down 46% year to date and the recreational vehicle market has fallen 57% 
compared to 2008. To date, there has been no evident impact of the U.S. 
government's fiscal stimulus in the markets we serve. The team at LaSalle 
Bristol has reduced headcount by a further 9% since the end of 2008 and has been 
highly effective in generating cash by reducing stock levels quickly in response 
to reduced market demand. Despite a significant earnings impact, LaSalle Bristol 
has been cash generative, is cash positive at the half year and has not borrowed 
against the new dedicated $10 million line of credit announced earlier in the 
year. 
 
 
As previously announced, the Group reached agreement with its UK banking 
syndicate on a medium term funding plan which covers the period to 30 June 2010 
and includes revised covenants and the deferral of capital repayments under its 
GBP60 million facility. This agreement allows the Group time to establish a more 
appropriate long term capital structure but imposes penalties on the Group if 
agreement on a satisfactory structure is not reached by 30 September 2009. All 
our Divisions are operating within the revised covenants and have sufficient 
facility headroom. 
 
 
Work in establishing an appropriate long term capital structure for the Group is 
proceeding to plan and the Group is currently reviewing a number of options, the 
outcome of which could result in a material dilution for existing holders of 
equity. In parallel to this work the triennial actuarial valuation of the UK 
final salary plan has been brought forward and is currently underway. 
 
 
Looking forward, the Board expects the UK/European businesses to continue to 
perform in line with expectations for the full year. The Board now expects 
market conditions in North America to reduce expectations at LaSalle Bristol and 
modestly for the Group as a whole. 
 
 
 
 
+------------+----------------------------------+--------------------------------+ 
|            |                                  |                                | 
+------------+----------------------------------+--------------------------------+ 
| Contacts:  | Heywood Williams Group PLC       | Tel: [phone]              | 
|            | Robert Barr, Chief Executive     |                                | 
|            | Mike Richards, Finance Director  |                                | 
+------------+----------------------------------+--------------------------------+ 
|            | Financial Dynamics               |                                | 
+------------+----------------------------------+--------------------------------+ 
|            | Jon Simmons/Sophie Moate         | Tel: [phone]             | 
+------------+----------------------------------+--------------------------------+ 
 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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