Poland costs hit 600 Group
Heckmondwike engineering business 600 Group has recorded a pre-tax loss of £6.5m in its half-year accounts.
In the 26 weeks to 1 October 2011, the company said it had been hit by special items of £6.9m.
600 Group said these included £3.6m in reorganisation and restructuring costs because of moving machine tools manufacturing to Poland and a reduction of head office costs.
There were also costs linked to reviewing stock levels with a write down of £1.4m involved.
A pre-tax profit of £529,000 was made excluding special items with revenue at £24.7m. This compared with £22.9m for the equivalent period in 2010.
The business said its order book is running at 35 per cent of the same period as last year and it has also been affected by a strike in South Africa and an increase in input costs in the US.
David Norman, chief executive of 600 Group, said: "The national strike which affected our South African business was settled in August.
"The remedial actions in the US to counter higher input costs have started to feed through with improving margins and Poland is beginning to produce more revenue following the transfer into production of higher value machines.
"Given our current order book, but taking into account also the worsening economic sentiment in Europe, we remain cautiously optimistic with regard to the second half."
