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Company spotlight: Alumasc

FINANCE

REORGANIZATION of the FTSE Construction sector has seen firms such as Alumasc move over from other areas.

The group's management bought the business from Consolidated Gold Fields in 1984 and it floated in 1986.

Alumasc has since expanded into northern Italy and Hong Kong and has 1,000 employees.

Shareholders in the building products and engineering group will be hoping that the shift into FTSE Construction presages an improvement in the stock's performance ? but don't hold your breath.

Profits from the sale of building products, such as bathroom fittings and scaffold clips, rose £113,000 to just over £2.5 million for the half year to December 2005.

Other exposure to construction includes sales to house builders, which will not excite investors too much, given the drop in new homes built expected this year.

Despite this, interim turnover at the building products arm firmed £4 million to £25.9 million and prospects do not appear bad, despite the size of the business.

The problem has been the engineering arm of the business, which hauled group pretax profits down to £2.9 million at the half-year from £3.7 million a year ago. This was due mainly to losses at discontinued businesses that should not now recur.

The fall in the share price has slashed Alumasc's market capitalization to under £60 million and the diversity within the group may not entice buyers in to repair this damage.