NAC Industrial – Trading Update 31st January 2018

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TRADING UPDATE 31ST JANUARY 2018 YEAR ENDED 31ST DECEMBER 2017

  • Sales £1,933k, 90% increase on 12 months to Dec 2016, gross margin maintained at 37.74%. Sales were held back by lack of manufacturing capacity through the final quarter. Some products out of stock in key markets.
  • 91.3% sales exported during year up from 73% in the 12 months to Dec 2017.
  • Sales growth has occurred across all existing markets as brand awareness, customer recognition and performance of NAC products become better known.
  • Largest market is the USA where growth has been significant both online and direct to regional distribution.
  • Online sales B2B and B2C remain dominant and a large area of growth as customers continue to switch to online purchasing. This trend we expect to continue.
  • 170 NAC product variants delivered and launched into market by Dec 2017.
  • NAC products were available in the UK, European Union, Australia, New Zealand, Saudi Arabia, USA, Canada and Mexico by Dec 2017.
  • Business restructured to improve unit performance and structure for possible list or trade sale albeit no timescales are established on this.
  • Distribution and supply chain were the key problems in 2017 as sales growth driven predominantly by online marketing and new markets outstripped manufacturing capacity.

2018 FORWARD LOOKING

  • FACTORY MOVE – Contracts being finalised now for move to new factory in Milton Keynes. Completion 1st March 2018. Factory is significantly larger than existing facility and will enable business to expand and alleviate current supply chain problems. Facilities to load 48 feet containers onsite.
  • Three new machines have been evaluated for siting at factory to offer further variants and accelerate manufacture to meet demand.
  • 1st Feb 2018 launch of further range of NAC Safety floor products into market. Products designed to our specifications, certified to US, EU and UK standards. Further range currently in finalisation.
  • 1st Feb 2018 launch of South American online market place. Employee recruited with local market knowledge
  • Evaluation of other key markets and online B2B and B2C portals ongoing with particular focus on the Middle East market.
  • Work underway to ensure bottleneck of products that have been designed, tested and are awaiting marketing and launch are cleared and are available in all markets prior to further development. We expect this to generate in excess of 500 product variants by DEC 2018, an increase of 294%.
  • Jan 2018 Finance Director recruited. Initial responsibility to implement process, automation and good practise in the online trading and manufacturing businesses followed by trading data review and profit maximisation.
  • Key priority for the business in 2018 is to ensure effective business control processes are in place and automation, review, feedback and action is quick and efficient.
  • Overall managing growth effectively we expect will be the key issue for 2018.

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Sentient CapitalNAC Industrial – Trading Update 31st January 2018

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