The 600 Group Plc provide and update on their pension scheme buyout completion and a trading update.
Pension scheme buyout
The 600 Group PLC, the diversified industrial engineering company (AIM: SIXH), today confirms the completion of the buyout of its UK pension scheme liabilities and subsequent scheme wind up. Following the completion of the transaction, all surplus funds totalling £6.3m/ $8m gross and £4.1/ $5.2m net of tax have now been returned to the Group.
On 17 July 2018 the Group announced that the Trustee of its UK defined benefits scheme had agreed to a buyout of the scheme’s £201m/ $270m liabilities by Pension Insurance Corporation Plc, a specialist insurer. The buyout was undertaken to better secure benefits paid to the scheme’s 2,000 pensioners and 800 deferred members whilst simultaneously relieving the Company of the disproportionate liability of such a large scheme.
The completion of the transaction provides the Group with significantly greater liquidity and financial flexibility. The £4.1m/ $5.2m post-tax cash surplus will be used to fund working capital, invest in product development and provide flexibility to supplement organic growth and value-enhancing bolt-on acquisition opportunities.
Ahead of announcing full year results at the end of June/ early July 2019, the Group today also provides an update on trading for the year ended 30 March 2019. Despite the continuance of certain macro-economic and political uncertainties across our end markets, trading in the second half of the financial year has been solid and the Group expects to deliver an outcome for the full year in line with Directors’ expectations. Enquiry and quotation activity have remained good with further progress in the Group’s orderbook.
Paul Dupee, Executive Chairman, commented:
“The completion of the pension buyout significantly de-risks the Group’s balance sheet, providing greatly improved financial flexibility as we continue our strategy for growth and build a global industrials business.”