S&P: Enodis outlook now stable

Standard & Poor's said it revised its outlook on U.K.-based food service equipment manufacturer Enodis plc to stable from negative, reflecting the group's improved financial profile and operating performance.

At the same time, S&P affirmed its BB- long-term corporate credit rating on Enodis and its B subordinated debt rating on the group's £100 million senior notes due 2012.

S&P said Enodis has been able to reduce its leverage and has succeeded in achieving cost reductions, which enabled the group to stabilize profitability in challenging markets during fiscal 2003. At year-end Sept. 27, 2003, the group reduced its unadjusted net debt to £139.7 million from £186.1 million in 2002 and, through stable cash generation and reduced interest costs, was able to improve key credit metrics to relatively strong levels for the ratings.

"Despite a depressed environment, Enodis' performance is satisfactory and the group's financial risk has decreased given the significant debt reduction undertaken, focus on cash flow generation, and efforts to reduce operating costs," said S&P credit analyst Leigh Bailey. "Operational improvements have helped the group to satisfactorily offset the affect of very soft market conditions in its core North American food equipment market."

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