Eleco plc has sold its timber engineering division – Gang-Nail Systems – to ITW Industry.
The £7.9m deal, which also includes the sale of Eleco’s South African timber engineering business International Truss Systems, comes just months after Eleco sold its Liverpool-based timber frame manufacturing arm Eleco Timber Frame.
Gang-Nail’s business includes the manufacture of connector plates for the roof truss, fencing, pallet and crate manufacturing industries and the Ecojoist metal-web/timber flange joist product. The Consultec brand of timber engineering design and manufacturing software, including StairCon for staircase production, is not included in the sale despite it becoming part of Gang-Nail in 2008.
Gang-Nail’s Aldershot base with about 41 staff is being transferred to ITW.
Eleco‘s timber engineering businesses posted a pre-tax profit of £900,000 for the 12 months ended June 30, 2011. The net asset value as at June 30 was £1.9m.
Eleco’s divestment of the businesses is consistent with its previously announced strategy of reducing its involvement in some of its capital intensive building systems activities and expanding its successful international software interests.
“The divestment also represents a major step towards strengthening Eleco’s financial position,” it said.
Eleco also announced its 12-month interim results yesterday (for the year ended June 30), showing a loss before tax of £1.2m from a turnover of £47.9m.
The building products division’s turnover was up 18% to £8.9m and adjusted operating profit before amortisation and restructuring costs was £700,000. The nail plate business in the UK and South Africa recorded a better trading performance.
Eleco’s cash position was impacted by the adverse performance of its former timber frame manufacturing and precast concrete operations, as well as increased retentions and the failure of some major customers.
