Latchways plc has given DirectorsTalk a trading update in respect of the period 1 April 2015 to 4 August 2015 inclusive.
“We have made considerable progress in the strategic expansion of our sales team. Our mission for this year is to complete this expansion, which is intended to substantially improve our business pipeline in all our key geographies, thus driving revenues and reducing our exposure to individual projects.
In the UK, the new geographic focus is working well and we are already seeing a significant increase in our prospect bank, giving us confidence in both the strategy and the full year outcome. The team is largely complete and we expect this to drive revenues in the second half of the year and beyond.
Our European recruitment is progressing and we expect to have all positions filled by the half year end. Current order intake is encouraging, despite the weakness of the Euro. As we invoice our European sales in Euros, this weakness is creating a significant drag on the Sterling value of revenues, and on margins.
In North America, our new recruits are generating good prospects, in particular in the utilities market, with discussions ongoing with several potential customers and trial systems being installed. We are excited by the longer term potential of this opportunity. Prospects in the Aviation market are also good. Our focus now is on completing the recruitment of the sales team in order to drive revenues for our traditional systems.
The recent acquisition of our largest competitor, Capital Safety Group (CSG), by 3M is likely to impact our North American revenues as 3M was our main US distributor for the Self Retracting Lifeline product range, of which CSG has its own range. We do not expect this to have a material effect on current year profits as the channel through 3M is relatively low margin business, but it does underline the importance of developing our own channel to market for this important growth product.
The Rest of the World region has seen mixed trading, with relatively quiet installer business more than offset by the resumption of the rollout of our Vertical systems by our largest Australian utility customer. We have recently recruited a utility industry specialist sales person in the region to develop our customer base.
Four months into the financial year, our view on the year is unchanged. We are progressing with our stated strategy and the early indications are that this will drive revenues significantly higher in due course. Given the timing of the recruitment process the impact on this year’s revenues is expected to be mainly second half weighted, but we are encouraged by early progress. With our strong balance sheet we have the financial strength to invest wherever we see returns to be made”.
