Ultraframe: strategic review threat to jobs

More jobs could be cut at UK conservatory manufacturer Ultraframe, which employs 450 people at its head office in Clitheroe, northern England. The firm reported 8 December 2005 a fall in turnover of m…

More jobs could be cut at UK conservatory manufacturer Ultraframe, which employs 450 people at its head office in Clitheroe, northern England. The firm reported 8 December 2005 a fall in turnover of more than GBP 20 million in the last year, while profit was down more than GBP 7 million in the same period. The firm has cut 27 senior management jobs and more than a quarter of jobs at its headquarters have gone in the last two years. Ultraframe cites “tough UK market conditions” for the problems. External advisers are conducting a strategic review of the business. Chief executive David Moore said: “Until the results of the review have been reached, you can never say never about anything, although we have already undergone a lot of changes of the operational side of the business”. “A lot of the pain of that was taken out in 2005 when there were a number of redundancies on the operational side of the business and a massive restructuring on the management side”. “The strategic review is looking to maximise the value of the company for our shareholders in the short term over the next two or three years”. Ultraframe said it expected the difficult conditions to continue in the near future and, as part of the review, it would be considering reinforcing its links with rival firms, which could lead to “major changes in working practices” within the organization. It expects the job losses in 2004 to have an effect in the “medium to long-term” and believes the changes have made it more flexible. Ultraframe“s preliminary results saw turnover fall by GBP 21.5 million, from GBP 118.2 million in 2004 to GBP 96.7 million in 2005. Profits before tax fell from GBP 12 million to GBP 4.5 million while earnings per share went down GBP 0.05 from GBP 0.085 last year to GBP 0.035. However, Mr Moore revealed the majority of the losses resulted from the GBP 6 million cost of its six-year battle with competitor Burnden Group over intellectual property rights and said the company“s operations had actually made a GBP 4.5 million profit before tax. As a result of losing the case, the firm faces legal costs of GBP 3.9 million and must pay GBP 2.1 million to Burnden Group, but could appeal.