Premium building product supplier Alumasc (ALU) has offloaded its loss-making precision engineering business AMC in a £5.8m cash deal. The unit, which management announced plans to sell last autumn, has struggled with reduced spending by original equipment manufacturers on its die castings.
As AMC contains net assets of £6.5m, the deal represents a slight loss. Exceptional costs of £2m are also expected, mostly stemming from £1.5m-worth of customer claims. But news that management will use the proceeds to invest in Alumasc's popular rainwater, drainage and solar shading product range was well received by markets.
Broker Peel Hunt responded to the announcement, and a trading update indicating that order intake for building products is up 23 per cent to £23.7m from December, by upgrading adjusted EPS forecasts 5 per cent for both the year to June 2015 and 2016, respectively.