TIDMRM2

RNS Number : 0071G

RM2 International SA

01 May 2014

RM2 International S.A.

OPERATIONAL UPDATE

Production and new manufacturing site lease

RM2 International S.A. ("RM2" or the "Company"), the vertically-integrated innovator in pallet development, manufacture, supply and management, today announces that it has entered into a lease for a 265,000 square foot production facility (the "New Facility") in Ontario, Canada. The New Facility will allow the Company to concentrate its pultrusion activity and related expertise in a single location and has capacity for machinery capable of pultruding the parts for up to approximately 8 million BLOCKPal(TM) pallets per year (an increase of over 100% from the anticipated capacity of the existing 135,000 square foot facility at the IPO). Pallets will also be assembled at the New Facility, and in due course at additional locations, for delivery to RM2's customers. Operations are expected to begin at that location in June 2014.

A detailed review of the specialist pultrusion machinery being used in the manufacturing of the BLOCKPal(TM) pallets has identified that machines from certain suppliers are significantly more efficient when operating at high capacity. Concentration of production utilising these machines is expected to result in a material reduction in capital expenditure and pallet production costs. The Company expects to have a total of 25 pultrusion machines installed and operating in the New Facility and 6 automated assembly lines by the end of the third quarter.

The changes in supplier mix and the transfer to the New Facility will result in considerably lower pallet production than anticipated in the first half of the year. It is expected that production in the second half of the year, which was anticipated to be the more significant period, will be in line with management's original expectations and will be managed according to demand.

Since IPO, the Company has continued to test and make improvements to the design and construction of the BLOCKPal(TM) pallet and the results indicate that the typical life cycle of the pallet has now increased since the earlier test data, whilst the weight of the standard pallet has also been materially reduced.

Pallet Deployment

RM2 has now leased and sold pallets to blue chip customers in Europe and North America across a number of key market sectors. Currently, due to the changes being made to the Company's production facilities and customers' own adoption processes, these are in small numbers. However, the Company expects to secure more substantial orders from both existing and new customers in the short to medium- term.

Chief Executive Officer, John Walsh, commented:

"I'm encouraged by the implementation of RM2's business plan since the IPO just a few months ago. The data from the machinery working at high capacity has been invaluable and this, together with the new, enlarged facility, will enable us to expand production significantly in the coming months in a single location and to benefit from other operational efficiencies.

As our objective is to be a disruptive presence in the global pallet market, we continue to respond to the feedback from, and the needs of, our customers.

I look forward to reporting further progress when the FY13 results are published in June."

The Company will provide a further operational update with the publication of its results for the 12 month period to 31 December 2013, which are planned to be released on 16 June 2014.

For further information please contact:

 
 RM2 International S.A.                      +44 (0)20 8820 1412 
 John Walsh, Chief Executive Officer 
  Ruari McGirr, Strategic Development and 
  Investor Relations 
 
 Cenkos Securities plc                       +44 (0)20 7397 8900 
 Neil McDonald 
  Alan Stewart 
  Beth McKiernan 
 
 Citigate Dewe Rogerson                      +44 (0)20 7638 9571 
 Simon Rigby 
  Kevin Smith 
  Lindsay Noton

This information is provided by RNS

The company news service from the London Stock Exchange

END

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