600 Group reinstates dividend after revenue boost

Shares in machine tools engineering firm 600 Group received a boost on Friday after it reintroduced its final dividend, a proposed 0.5p per share, following significant revenue growth in its full-year results.

Compared to the previous year, revenue increased by 12% to $66m in the year ended 31 March but pre-tax profits fell 4.2% to $3.9m, affected by a fall in one-off gains during the period to $0.82m from $1.4m.

Also contributing to the proposed dividend is the fact that an agreement has been reached for the buy out of the scheme liabilities of 600 Group’s UK defined benefit pension scheme, with the total net amount payable to the company currently estimated to be between $4m and $5m.

600 Group had cash an cash equivalents of $1.68m, up 24% from the previous year, while group net debt was down 9% at $15.6m.

Executive chairman Paul Dupee: "Looking forward, we expect to improve even further as we achieve cost savings in our UK operations and begin to see the benefits of the improved range of machines and engineering solutions being developed throughout the group."

The reorganisation is targeting a reduced capex requirement and improved margins further, and will be funded through sale of surplus assets resulting from the company’s rationalisation decisions.

The firm reported that its order book remains stable amid improving industry forecasts for growth, plans for an expansion of 600 Group’s worldwide distribution network and the upcoming release of new products.

"We go into this new financial year with great confidence and I am delighted that this has given us the opportunity to reinstate paying a dividend to shareholders for the first time in many years," said Dupee.

600 Group’s shares were up 9.09% at 18.00p at 1330 BST.