Record orders for LPA but ‘a challenging start’ as customers delay contracts

In its annual result to 30 September, LPA reported turnover down 9.1% to £13.7 million (2008: £15.1m), while pre-tax profit was £187,000 (2008: £382,000). Chief executive Peter Pollock said: "Although sales fell 9% we were still able to turn a modest profit in a year when order entry increased by 49% to a record £22.8 million despite a reduction in routine orders. Since the start of the new financial year routine orders for products have recovered, but the results for the year as a whole will be negatively affected by the postponement of £1.7m of scheduled contract deliveries to later periods. However, given the substantial order book for the next three years we expect to make progress in the latter part of this year and thereafter." Looking ahead, chairman Michael Rusch said: "Although recently there has been a welcome recovery in routine orders, wholly unexpected contract re-scheduling by customers over the last ten weeks has removed approximately £1.7 million of anticipated sales from the year. The first half will be disproportionately affected. Costs are being tightly controlled and directors' salaries have been held at January 2009 rates. "Given the record level of orders on hand shareholders will appreciate that it is frustrating not to be able to report a more positive start to the new financial year. However we have a good base load for the next three years and many prospects. Overall the outlook is positive." Reviewing the company's markets, Pollock said the rail transport market has continued to provide LPA with good long term orders and there remained some very large opportunities which we will pursue with vigour. However, despite Government commitment to invest in rail, the home market for passenger vehicles had become "small and lumpy", so the company continued its efforts to develop markets abroad, a policy that has delivered "spectacular results". He went on, "We were excited by the prospect of a further 200 Turbostar Diesel Multiple Units for the home market which were the subject of an urgent bid in early Spring, only to have it evaporate in the Department for Transport's late Summer announcement of further electrification. Our continued efforts in Australia resulted in our first substantial order for LED based lighting worth £5.7 million. France in particular and Asian countries in general have been quicker to embrace this new technology than our home market, though it must be said that new specifications emanating from the Department for Transport do call for such technology, which is helping to drive would be suppliers to the UK market to talk to us." Orders had also been won from the cruise ship and commercial markets, aircraft ground support and the UK defence and aerospace markets. The company said it would prepare its Saffron Walden property for sale when market conditions improved and would migrate activities from the site "when sensible, while retaining our essential skills in the locality".