600 in sale of South Africa arm

The Leeds-based firm also warned that its full-year figures were unlikely to meet market expectations. In a statement about its divestment activity and current trading, 600 Group said a conditional contract had been signed for the sale of the entire share capital in 600 SA – the firm’s South African subsidiary – to Eqstra Holdings for net cash consideration of £1.86m.

The contract requires the approval of the Competitions Board of South Africa. Property at Shepshed, Leicestershire, has also been sold to a private company for net cash proceeds of around £1.20m.

The sale of 600SA will help the management to focus on its core businesses in machine tools, precision components, and laser marking equipment.

The statement added: “These businesses continue to demonstrate high levels of customer loyalty and significant growth potential. Trading in the first quarter of the current financial year has, however, been impeded by constraints on working capital and operational focus.

“These constraints are partially mitigated by the successful outcome of divestments, and this should enable progress to be made in the remainder of the financial year.”

In view of the “dilutive” effect of the sale of 600SA, and the constraints on revenue and cash flow during the first quarter, the board considers it unlikely that the results for the year ending March 31, 2013 will meet current market expectations, the statement added.