MANROY ENGINEERING LTD – INTENTION TO RAISE £8M AND ADMIT TO AIM
09 Nov 10. Manroy Engineering Limited plc announces its intention to seek admission to AIM and raise up to a minimum of £6 million by way of a Placing of shares with institutional investors.
Manroy is a UK based manufacturer of machine guns, mounts and other associated products. A key Ministry of Defence (“MoD”) supplier for 26 years, Manroy currently manufactures supplies and supports:
* the 0.50” M2 Heavy Machine Gun (HMG)
* the 7.62mm General Purpose Machine Gun (GPMG)
* weapon tripods and mounting systems
* spares support and training
The net proceeds of the placing will be used to pay down debt and provide working capital to enable Manroy to focus on making strategic acquisitions in the UK and internationally and develop new product lines, including small arms, rifles and pistols.
Manroy has traditionally operated with a limited product range in a small number of markets. The board believe that there is a significant opportunity to derive further value from existing partner relationships, create additional revenue streams by expanding the product offering, and move into new territories.
In the year ending 30 September 2009, Manroy had sales of £11.7 million and made a pre-tax profit of £2.1 million. In May 2010, Manroy received orders from the MoD for weapons systems and spare parts worth approximately £11.0 million, of which approximately £6.2 million were delivered by 30 September 2010 and £4.0 million are forecast to be delivered in the year to 30 September 2011.
Manroy’s flagship product is the 0.50” M2 HMG, which has an effective range of approximately 1,800 metres. In addition to its ground support role, the M2 HMG can be fitted to all types of light and heavy armoured vehicles, patrol boats, helicopters and aircraft.
Traditionally, changing the barrel on the HMG was a very time consuming process. As a result, Manroy used their technical expertise to design a Quick Change Barrel system (“QCB”) in the 1980s to enable faster barrel replacement. Manroy has supplied the M2 HMG QCB to government agencies and other customers approved by the UK Government in approximately 30 countries worldwide.
In 2008, the new management team, led by CEO Glyn Bottomley, commissioned the re-design of the GPMG and resumed its production in early 2009. Orders have already been received for the GPMG and manufacturing is expected to commence in the first quarter of 2011. The GPMG has a built-in bipod for infantry use and can also be attached on vehicles, boats and helicopters.
Glyn Bottomley, Chief Executive of Manroy said: “Manroy is an established manufacturing business based in East Susses. From there, we build the essential equipment our troops need on the ground when serving our country.
Manroy is a profitable, cash generative business with significant expansion opportunities, operating in a sector with few competitors and high barriers to entry.
We intend to leverage our existing MoD credentials to enter additional export markets, pursue an active acquisition policy and provide a very attractive proposition to current and potential investors.”