Companies: MRX   

'We've been surprised at the ferocity of raw material price movements,' remarked Richard Arbuthnot, chief executive of engineering play Metalrax, as he reported a drop in profits for the half to June. The steeply rising costs of steel, plastic and energy impacted the bottom line, leaving profits down at £5.23m (£5.72m) on flat turnover of £50.6m (£51.1m). 'We're doing everything we can to move the steel price through to our customers at the moment,' emphasises Arbuthnot. Despite the bleak commodities outlook, there are some bright spots. Within the engineering and storage products division, Metalrax has seen rising demand for its stock room shelving and associated steel work. And in July, Metalrax bought Premier Stairways, a business whose range of high quality architectural metalwork for the construction industry will provide synergies with existing group businesses. The picture is bleaker over in the housewares division, where performance has been dampened by lower than expected consumer demand and costs involved with product rationalisation. We've previously suggested buying into Metalrax for its yield attractions (the interim dividend has, incidently, been held at 1.65p), but with forces moving against it and so much uncertainty on the steel markets, they are best avoided now.