MANROY PLC 
By
IMMEDIATE RELEASE
17 April 2012
Manroy PLC ("Manroy" or the "Group"), the AIM-quoted leading
UK manufacturer of heavy machine guns and related products,
today announces that the US Department of Defense (the "DoD")
has novated a total of US$10.4m (£6.6m) of contracts to
Manroy USA ("MUSA" or the "Company"), in which Manroy owns a
49% interest.
The novations are in relation to unfulfilled contracts that
formed part of a larger circa US$34m (£21.5m) order placed by
the DoD with Sabre Industries ("Sabre"), whose assets were
acquired by MUSA in March 2011.
The contract awards include US$7.7m (£4.9m) of M2 Heavy
Machine Gun ("HMG") barrels
and bolts as well as a further US$2.5m (£1.6m) of M16
weapons, along with orders for M10
Chargers.
Initial production by MUSA to obtain First Article Acceptance
("FAA")* by the DoD for these contracts will commence during
April 2012 at MUSA's new 125,000 sq. ft headquarters and
manufacturing facility in Spindale, North Carolina. It is
anticipated that product deliveries following FAA will
commence in August 2012 with the majority of production
deliveries being completed during 2013, subject to FAA.
This novation marks a highly important stage in MUSA's
development as it follows a lengthy and detailed, but wholly
successful, series of audits conducted by the DoD to approve
the Company for this significant contract award. The audit
procedure covered all aspects of the business including,
operations, quality, finance, safety, government property
storage and security. As a result, MUSA's Spindale facility
is now fully qualified to accept DoD contracts that involve
weapons and ammunition. These approvals also qualify the
Company to bid for further DoD contracts in the world's
largest defence market.
This award follows on from $2.0m (£1.3m) of contract awards
won by MUSA over the past few weeks ($1.7m (£1.1m) of which
were announced on 22 March 2012), and is a real turning point
for the business, with further contract awards anticipated in
the near term.
-more-
MUSA's credentials have also been further strengthened by its
Small Business Accreditation status which was granted in June
2011 by the US Government. This is important as it allows the
Company to bid for contracts that are 'set aside' for small
businesses without competition from large companies.
The Directors believe the DoD has an annual requirement for
approximately 10,000 M2
HMG barrels, of which approximately half were supplied by
Sabre prior to its cessation of trade in 2010. Now the above
contracts have been successfully novated, MUSA plans to bid
for, and be involved with, this major DoD requirement. MUSA's
extensive barrel manufacturing capability can be used for
both the Group's US and UK businesses and so secure
continuity of supply and quality for customers without
reliance on external contractors.
The Group is currently completing a qualification process for
barrels provided by MUSA. This process is expected to
complete in the summer and will then trigger the supply of
barrels from MUSA, keeping cash within the Group and helping
to reduce UK barrel costs.
In March 2012, MUSA's previous premises in Alabama were sold
and all production operations have been moved to Spindale. In
addition, the small operations still being performed at
Sabre's previous premises at Nashville will be closed in
Autumn 2012, resulting in all production activities being
managed from the company's sole US site at Spindale.
Glyn Bottomley, Manroy's Chief Executive, said: "The novation
of these contracts to MUSA and the accreditation of its
production capabilities is a major step forward in our
planned expansion into the US defence market. This will also
enable MUSA to bid directly for future defence contracts for
the supply of the M2 HMG to the DoD for which it is
qualified.
"MUSA continues to be the cornerstone of our expansion into
this part of the world's largest
defence market thereby enhancing the Group's overall ability
and future performance."
Ends.
For further information please contact:
Glyn Bottomley, Chief Executive
Paul Carter, Finance Director
Robert Finlay
Peter Stewart
Baron Phillips
Simon Compton
Manroy is a UK based manufacturer of machine guns, mounts and
other associated products. A key Ministry of Defence supplier
for 26 years, Manroy currently manufactures, supplies and
supports:
