Raymarine net falls on cost of shifting production to Hungary
Raymarine Plc, a UK maker of marine navigation and fishing equipment, said its H1 profit fell 17% after it fired workers in the UK and shifted manufacturing to Hungary. Net income fell to £ 11.2 million ($21 million) or 13.3 pence a share, compared with £ 13.4 million or 16.1 pence in the year-earlier period, the Portsmouth, England-based company said in a statement distributed by the Regulatory News Service today. Sales climbed 12% to £ 83.4 million. Raymarine spent £ 3.05 million in the half to cut its UK workforce and move some production to a Zala, Hungary plant operated by Flextronics International Ltd., a Singapore-based subcontractor for the electronics industry. Raymarine's move into Hungary was triggered by “the price of components, like metals and plastics,” not just the cost of labor, Chief Executive Malcolm Miller said in a telephone interview. The company expects the move to produce cost savings of about £ 5 million in 2007. It has spent £ 14 million on the outsourcing project so far and expects it to be completed by the end of 2006. Raymarine will also shift some manufacturing to China in 2007. Raymarine shares fell 2% or 7.25 pence to 355.25 pence as of 9:37 a.m. in London. The stock has more than doubled since the company's initial share sale in December, 2004. It has a market value of about £ 293.2 million. The company sells products such as “fishfinders,” which detect fish in lakes and oceans by emitting and measuring sound waves in the water. (Bloomberg)
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