Tough trading conditions in Europe are continuing to dog Latchways, the specialist safety harnessing firm which sells its products to the building, maintenance and utility industries – although it says it has seen what could be the first signs of an upturn in the UK construction sector.
The Devizes-based firm, which reported a 34% drop in annual pre-tax profits in June, said trading conditions remained mixed in an interim management statement for the period April 1 to August 4.
It had seen a “noticeable, if modest, uptick” in orders in its UK horizontal business, reflecting what it believes to be the early stages of recovery in the construction market.
And while growth was strong in Latin America, Europe remained challenging with subdued demand continuing to affect several of its key markets.
Its newly-created North American operation was making progress, it said, with installer-generated revenues ahead of last year. However, sales of its Self Retracting Lifeline (SRL) and Personal Rescue Device were affected by destocking at its largest customer, although it expects this to improve later in the year.
“The first models in our newly designed SRL range are expected to commence production around the half year end, which will generate improved revenues and margins for this product range in due course,” the statement said.
Its Wingrip product line had put in a “robust” performance, while revenues from vertical safety products were also showing an encouraging trend.
Four months into the financial year, it said it view of the year as a whole remains unchanged.
In line with other UK manufacturers exporting to the US and Europe, it said the strength of sterling against both the euro and dollar had impacted margins, “adding an unwelcome degree of uncertainty”.
It said its balance sheet and cash generation remained strong and it continued to build a pipeline of prospective business worldwide.