The company comprises two distinct businesses with a common theme.
Composites
Produces Structured and Process materials. It is very high tech and is sustained by a large R & D department. Products are individually designed to meet each client’s particular requirements. Their customer list is impressive, among them are Boeing, Airbus, Siemens - a very large producer of wind turbines, F1 and expensive automakers and luxury yachts.
They are much involved in the new Boeing 787 and Airbus A350XWB aircraft where composites are now greater than 50% of the total weight of an aircraft compared with around 10% for most aircraft currently operating. But composites weigh less for greater strength so the reduced weight means variable operating costs are 40% lower and together with lower emissions make them very attractive to a recovering airline industry. Although these aircraft have suffered many delays it is thought that deliveries of 787 will start very soon and A350XWB in two years time. The firm orders for both are very large.
Pattonair
Provides supply chain services to the aerospace and defence industries. This involves stocking small, low value and low-tech items and ensuring they are instantly available at point of use. It is attractive to high tech industry – aero engine builders and the like – as historically when ordering themselves they over/under stocked, and productivity was reduced when work stopped for the lack of a small bolt, washer or seal. Outsourcing means that the outsourcer can concentrate their skills on ordering and stocking the low volume high tech items. It is low tech but requires extremely high standards of service and understanding of customer needs. It appears to be successful as Rolls-Royce and other engineering companies have signed long term contracts. Pattonair require a minimum of five years and the stocking levels are agreed and partly paid for by the customer.
Financials (source UMECO Annual Report)
| Year ending 31 March (£m) | |||||
| 2010 | 2009 | 2008 | 2007 | 2006 | |
| Revenue | 409.4 | 410.9 | 331.0 | 280.1 | 246.6 |
| Shareholders' Profit | 16.9 | 19.5 | 12.7 | 15.2 | 12.2 |
| Net Assets | 178.4 | 178.7 | 162.4 | 147.2 | 142.2 |
| eps (p) | 36.6 | 39.7 | 30.8 | 25.0 | 24.5 |
| Dividend | 17.5 | 17.5 | |||
The Composites Division is a little more profitable than Pattonair.
As can be seen the company emerged relatively unscathed from the recession and it seems Composites’ profit could accelerate as B787 and A350XWB production ramps up.
Summary
This appears to be the type of company UK badly needs, high tech and service to international customers in growth markets.
