Man Roland 'healthy enough' despite offset over capacity

The Chairman of Langley Holdings, Man Roland Sheetfed's parent company has described the divisions situation as 'healthy enough' in a half year trading statement.

In the report for the 6 months ending 30th June 2013, Tony Langley commented:
"Although profits from normal trading activities are in absolute terms similar to last year, they are significantly less as a percentage of revenue when compared with 2012. This is due to the inclusion of Manroland Sheetfed from 1st January this year. The group supported the acquisition of the German printing press builder in February 2012 and oversaw its restructuring
during the remainder of last year. By the end of 2012 the business was structured to breakeven, which it has done slightly better than in the first half and the second half will be similar.

Together with its international network of around forty subsidiaries, Manroland is one of a handful of offset litho printing press manufacturers worldwide and highly regarded in the industry. However, there remains significant over-capacity in the market for these presses and with prices virtually stagnant since 2008, it is not difficult to see why the sector is languishing.

The pace of capacity realignment amongst competitors is slow and until such time as supply and demand in the sector are better matched and prices increase, I do not expect to see any significant operating contribution from the division. However, Manroland has a strong cash position and is trading without need of the group’s financial support.
Moreover, due to the bargain purchase of the assets in 2012, the transaction has increased the group’s net assets by just over €100 million, net of reorganisation costs.

The group’s orders on hand at the half-year totalled €312.5 million and are forecast to increase slightly to €318.6 million at the year end; a healthy enough situation."