600 Group (SIXH ) said its performance is above the Board's post-pandemic expectations after the business witnessed a particularly strong increase in order activity during March.

The diversified industrial engineering company said it expects to report revenues of around $53m, down over 20% on the prior year, for the financial year ended 31 March 2021.

Despite the reduction in revenues, 600 Group expects to report underlying EBIT of c. $2.5m after it benefitted from operational cost savings and government assistance programmes in spite of the ‘exceptional impact’ of COVID-19 on 600’s businesses and world economy. 

The Group said its performance is above the Board's post-pandemic expectations. It said the strong increase in order activity during March improved the overall order book to approximately $14 million as at 31 March 2021 which is almost 70% above the prior year.  

600 said activity has significantly increased over the last few weeks with a further $4m of orders received so far in April. It said this ‘much improved’ order book is strong in the higher margin custom laser side of the business. 600 believes this will provide it with a strong platform to grow this year and benefit from operational gearing within the businesses. 

Shares in 600 Group have been trading consistently at 8.75p in value over the past two weeks. Following this morning’s trading update, the stock jumped by 25.71% to 11p.  

The Group said it has been able to largely maintain pre-pandemic employment levels, with assistance from government furlough in the UK and Australia, as well as forgiveness of US Government Paycheck Protection Program ("PPP") loans. The Group believes this should enable the business to ramp up operations sufficiently to match the increase in order book. 

Group net debt (excluding IFRS16 leases) and including the second round $2.2m of PPP funding loans was $13m at year end, compared to $14.2m at the end of March 2020.

Commenting on the update, Paul Dupee, 600’s Executive Chairman, said, "The particularly strong order activity over the last two months, supported by a level of government assistance, has enabled the business to maintain its skilled workforce during the pandemic. 

This has allowed us to respond quickly to recent demand and significantly improve the size and quality of the Group's orderbook, leaving the business well placed as markets improve." 

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