Thursday 8 March 2012

14m refinancing deal for metalrax

West Midlands engineering group Metalrax has secured a £14 million banking deal that will save it £300,000 per year as targets further growth in 2012.

Metalrax, which makes consumer durables such as kitchenware as well as its specialist engineering work for clients such as JCB, Caterpillar and Jaguar Land Rover, has refinanced its banking facility on better terms, ahead of a deadline of August this year.

The group operates eight businesses, including Cooper Coated Coil in Wednesfield and the Samuel Groves cookware factory in Oldbury.

Metalrax has agreed facilities up to £14 million for four years with The Royal Bank of Scotland.

Group chief executive Andrew Richardson said: "Our list facility was negotiated in October 2009, in the heart of the banking crisis, on very tough and expensive terms. "The new facility is much more flexible and will save us around £300,000.00 per year.”

The facilities, mainly provided by RBS’s asset based lending team, are secured against Metalrax’s properties, the debtor ledger; plant and machinery as well as inventory.

Mr Richardson said: "This is a very important milestone for the group. “ The new facilities have been agreed ahead of schedule and on competitive terms. Completion of this refinancing provides a stable platform in challenging times with unpredictable economic conditions; the group’s priorities are to achieve growth whilst continuing to reduce borrowings."

Metalrax is due to announce its full year figures next month and is expected to announce a sales figure of 2011 of £63 million, and a target of £67.5 million for 2012.

Pre-tax profits are set to rise to £1.4 million, from £900,000 a year ago, and City analysts are predicting pre-tax profits for the current year in the region of £1.9 million, Mr Richardson added that Metalrax had come through a "mixed year" in 2011 “For a lot of businesses, the unexpected slowdown in the fourth quarter made it very tough", he said.

While Metalrax engineering business and exports had grown very strongly for the business last year, its consumer durables arm had a more difficult time due to the struggles of retailing industry on the high street. "Personally l think the blip at the end of last year was about confidence, people not spending money because of the general air of uncertainty - very similar to the mood in 2008/9, But a lot of our engineering customers - firms like Caterpillar, JCB and JLR - are seeing real growth at the moment and we are expecting quite strong growth this

An update for investors in January showed the company making good progress, while its net debt had been cut to £5.5 million.

Source Express & Star, March 2012