LPA Group warns H1 margins will be lower than last year

Shares in LPA Group slumped on Tuesday after the electromechanical manufacturer warned that margins in the first half of the year are expected to be lower than last year due to reduced aerospace activity and the collapse of one of its oil customers.

Chairman Michael Rusch said the company remains “cautious at this point in the year” but expects good progress for the year as a whole, given that its order book for the next three years remains close to record levels.

Margins in the first half are expected to be lower than in the same period last year, due to a change in product mix arising from more project work, reduced defence and aerospace activity and the collapse of one of the company's oil and gas sector customers during the first quarter of the year.

The oil and gas customer’s business has since been bought by a third party and trading has resumed.

Meanwhile, the AIM-listed company is currently moving its LED lighting business to an extended facility about 200 metres from its existing premises in Normanton, West Yorkshire, and it has also received a £1.7m order as part of a contract to supply about £2m of inter-car jumpers for London based rolling stock over the next three years.

Shares in LPA Group were down 8.71% to 152p at 1232 GMT.