Hampson puts faith in composite future

Chairman Chris Geoghegan said: "Although the immediate outlook for our core markets remains uncertain, present customer indications and the scale of new work in the pipeline all point to a gradual increase in the release of new orders in the months ahead. Tooling order books have increased in September and October and with leading indicators now generally more encouraging, we are cautiously optimistic of seeing further order strengthening over the second half. In the longer term, our strong market positioning and the projected increase in the use of carbon composite structures in airframe manufacture leave us very well positioned to grow our business and generate attractive returns for our shareholders." Revenue for the six month period to 30 September was £97 million, down 12% compared with the first half of the previous year. Hampson said the reduction mainly reflected lower revenue in its Aerospace Components & Structures division. The Automotive Turbocharger division also experienced a steep decline in revenue as global demand plummeted compared to the first half of 2008/09. Pre-tax profit for the six month period decreased by 32% to £11 million on an underlying basis. Geoghegan said lower Aerospace Components & Structures division revenues had been brought about by the collapse of the company building the Eclipse 500 executive jet programme, the disposal of Hampson's aerospace machining operations and reduced activity in its legacy metallic aerostructures and shims businesses. However, Hampson was now the world's leading independent producer of tight tolerance aerospace tooling systems required in the manufacture of advanced carbon composite airframe structures. These were starting to revolutionise the way aircraft are designed and assembled, providing the company with considerable future growth opportunities across every sector of the aerospace market. While the long term outlook was for sustained growth in demand for aerospace tooling systems, the unexpected extent of the development delays in shigh profile aerospace programmes like the Boeing's B787 Dreamliner, B747-8 and the Airbus A350, held back the performance of Hampson's tooling businesses in the first half. Boeing had recently reported that the engineering issues that caused the latest launch delays to the Dreamliner are being resolved and that it expects that the first flight will take place by 31 December 2009. Hampson anticipates that this, together with Boeing's recently announced intention to establish a second Dreamliner assembly line in South Carolina, will have a positive impact on the release of further tooling orders. In August, Hampson sold its metallic engine components machining business, Hampson Aerospace Machining Limited leaving 75% of the group's activities now linked to the use of composite materials, "leaving us strategically very well placed for the future". * Business Secretary Lord Mandelson today announced Government plans to support British firms involved in manufacturing, utilising and exporting composites and composite technology. On a visit to Williams Formula One in Oxfordshire, he launched the Government's new 'UK Composite Strategy' which estimates that the high-value composites market is currently worth about £1 billion to the British economy. The UK offshore composite wind turbine blade and aerospace wing market alone could be worth £22 billion by 2020 – highlighting composites' low carbon credentials, he said.