2 November 2012 – contract loss
The tube manipulation specialist has announced that it has been informed by Rolls-Royce that it is not intending to renew or extend the supply agreement with its subsidiary, RMDG Aerospace. This expires on 31 December 2012 and relates to the ongoing supply of pipe assemblies which accounted for approximately 11% of revenue last year. This is clearly a major blow and negative news from Caterpillar in the US had already caused weakness in the share price. We move our recommendation to HOLD ahead of interim results, due to be released on 3 December.