Interim Results
Alumasc Group PLC
12 February 2002
THE ALUMASC GROUP PLC- INTERIM ANNOUNCEMENT
• Alumasc, the high specification engineering and building products
group, announces a much improved performance in the half year to 31 December
2001 with the management team, under the direction of Paul Hooper, who joined
Alumasc as Group Managing Director in April 2001, making good progress on the
path of recovery and profit growth.
• On turnover from continuing businesses up 5.4% at £56.2 m, pre-tax
profit was 56.6% ahead at
£3.3 m and EPS 66.6% higher at 6.5p, additionally reflecting the Group's share
repurchase activity in the prior year.
• With a view to restoring satisfactory dividend cover, the Directors
have declared an unchanged interim dividend per share of 2.45p.
• The Engineering Division increased its profit by 38% to £2.1 m on
turnover 5.2% ahead at £39.2 m. The Precision Components' businesses moved
ahead strongly whilst the Industrial Products companies also contributed to the
stronger first half performance, including recovery in sales to the brewing
industry.
• Investment continued in the period in line with the plan to double the
capacity of Alumasc Precision Components in the medium term.
• The Building Products Division had a good half year with sales
increasing by 5.7% to £16.9 m and profit 55% ahead at £1.4 m. Alumasc Interior
Building Products and Alumasc Construction Products had excellent performances
following new product and market initiatives combined with improved operational
efficiencies.
• John McCall, Chairman, stated 'Despite the general economic
uncertainty, the actions taken to strengthen our business and the continuing
health of our order books give encouragement for further progress in the second
half year.'
Enquiries:
The Alumasc Group 01536-383 844
John McCall (Chairman)
Paul Hooper (Group Managing Director)
Bankside Consultants Limited
Charles Ponsonby 020-7444 4166
CHAIRMAN'S STATEMENT
OVERVIEW
Progress in our core business and recovery from the set-backs of the previous
year have resulted in a much improved performance in the half year to 31
December 2001.
Turnover of £56.2 million from continuing businesses was £2.9 million (5.4%)
ahead of the previous year. Profit before tax of £3.3 million was £1.2 million
(56.6%) ahead, benefiting from business improvement plans implemented in 2001
and growth in turnover. Earnings per share of 6.5p were 66.6% higher,
reflecting the higher profit and the fewer shares in issue following the Group's
share repurchase activity in the prior year.
The period witnessed both the bringing into production of new work which had
been under development during the previous year and a more general recovery in
activity. In the comparable period last year, the Group had experienced the
worst of its difficulties in relation to the Rover Group, the absence of demand
from its brewery customers, and the effects of exceptionally adverse weather
conditions on UK construction.
Against this background, a creditable result was achieved in the half year with
the management team, under the direction of Paul Hooper, who joined Alumasc as
Group Managing Director in April 2001, making good progress on the path of
recovery and profit growth.
OPERATIONS
Both divisions of the Group moved ahead of the prior year following a sustained
focus on operational efficiencies combined with increased sales.
The Engineering division profit of £2.1 million increased by £0.6 million (38%)
on turnover of £39.2 million, 5.2% ahead. The Precision Components' businesses
moved ahead strongly, recovering much of the Rover-related volume loss of the
previous year. During this period, Land Rover launched the Freelander in the
USA and Rover Cars experienced increased demand from new product launches. The
division also commenced volume supply to new customers such as BMW, Filtronic
and Giroflex. The recovery in demand from established customers combined with
new product introductions put pressure on operations, causing cost over-runs
which will be brought under control as the high level of activity continues into
the second half year. Investment in the division continued in line with the
plan to double the capacity of Alumasc Precision Components in the medium term.
The Industrial Products companies also contributed to the stronger first half
performance, including recovery in sales to the brewing industry. Operational
improvements contributed to the performance of our brewery related companies and
Interbrew's divestment of Carling Brewers to Coors Brewing Company should bring
further stability into this sector. Bissell was restructured to meet the
increasing challenge of imported low cost spring products and Brock Metals
maintained its strong performance despite the weak industrial environment, which
saw continued rationalisation of the supply side in the metals sector.
The Building Products' division had a good half year with sales increasing by
5.7% to £16.9 million and profit of £1.4 million ahead by £0.5 million (55%).
The division benefited from concerted activity to improve operational
performance as well as the absence of the abominable weather conditions of the
previous year. Actions to reduce costs included the closure of three satellite
manufacturing operations in Alumasc Exterior Building Products and headcount
reductions throughout this division. Alumasc Interior Building Products and
Alumasc Construction Products had excellent performances following new product
and market initiatives combined with improved operational efficiencies.
Leonardo, the Group's 70% owned internet services business, continued to make
progress, achieving its interim targets in the half year.
The business improvement plans implemented during the first half year should
benefit profits in the second half, supported by order books which continue to
move ahead of last year. Our ability to win new customers such as BMW,
Filtronic and Caterpillar is testament to the Group's differentiated market
position. Our businesses will continue to work closely with their customers in
order to meet the ever increasing requirements of our chosen market place.
FINANCIAL
In common with many other businesses, Alumasc moved to defined contribution
pension arrangements for new employees in the late 1990's, when its two defined
benefit schemes were closed to new entrants. The profit for the half year
contains an increased pension charge based on actuarial advice following the
triennial valuation of one of the two schemes.
Net borrowings rose by £2.2 million to £6.3 million in the half year to 31
December 2001, as a result of continued investment to expand Alumasc Precision
Ltd and higher stocks reflecting increased activity levels. Gearing at 31
December 2001 was 18.6% (30 June 2001 : 12.6%).
The Group has agreed £6.5 million of fixed asset-backed credit lines with its
bankers, with the intention of transferring part of its overdraft borrowings to
this facility over the next 12 months. The first tranche of £1.6 million of such
borrowings was drawn down in December 2001.
PEOPLE
I am delighted to welcome Richard Saville as a non-executive Director of Alumasc
with effect from 1 January 2002. His knowledge of the Industrial and
Construction sectors, most recently as Finance Director of George Wimpey plc,
will be of real value in the development of our Group.
DIVIDEND AND PROSPECTS
With a view to restoring satisfactory dividend cover, the Directors have
declared an unchanged interim dividend of 2.45p per share, which will be payable
on 8 April 2002 to shareholders on the register at close of business on 8 March
2002.
Despite the general economic uncertainty, the actions taken to strengthen our
business and the continuing health of our order books give encouragement for
further progress in the second half year.
J S McCall
Chairman & Chief Executive 12 February 2002
UNAUDITED CONSOLIDATED BALANCE SHEET
at 31 December 2001
31 December 31 December 30 June
2001 2000 2001
£000 £000 £000
Fixed assets
Intangible assets 68 347 74
Tangible assets 30,850 28,642 29,120
Investments 452 462 432
___________ ___________ _________
31,370 29,451 29,626
___________ ___________ _________
Current assets
Stocks 12,654 11,940 10,896
Debtors 22,412 25,197 23,579
___________ ___________ _________
35,066 37,137 34,475
___________ ___________ _________
Creditors: amounts falling due within one year
Trade and other creditors 26,195 24,973 25,893
Taxation 1,331 1,564 495
Proposed dividend 850 892 2,098
___________ ___________ _________
28,376 27,429 28,486
___________ ___________ _________
___________ ___________ _________
Net current assets 6,690 9,708 5,989
___________ ___________ _________
Total assets less current liabilities 38,060 39,159 35,615
Creditors: amounts falling due after more than one year 3,952 3,187 2,794
Provisions for liabilities and charges 346 170 451
Equity minority interest 92 187 114
___________ ___________ _________
Net assets 33,670 35,615 32,256
___________ ___________ _________
Capital and reserves
Called up share capital 4,352 4,570 4,352
Share premium 26,907 26,907 26,907
Revaluation reserve 2,168 2,271 2,168
Capital redemption reserve 693 475 693
Profit and loss account (450) 1,392 (1,864)
___________ ___________ _________
Shareholders' funds (note 8) 33,670 35,615 32,256
___________ ___________ _________
UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the half year to 31 December 2001
Half year
31 December 2001
________________
Continuing activities
£000
Turnover (note 2) 56,200
________________
Operating profit / (loss) 3,491
Share of operating profit in associates 20
Loss on sale of business activities -
Interest (226)
________________
Profit / (loss) on ordinary activities before taxation (note 2) 3,285
Taxation (charge) / credit (note 3) (1,020)
________________
Profit / (loss) on ordinary activities after taxation 2,265
Equity minority interest (1)
________________
Profit / (loss) for the financial period attributable to the members
of the parent company 2,264
Dividends 850
________________
Retained profit / (loss) for the financial period 1,414
________________
Earnings per share and diluted earnings per share (note 4) 6.5p
________________
Dividend per share (note 5) 2.45p
________________
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
There are no recognised gains or losses other than the profits attributable to
shareholders of the Company of £2,264,000 for the half year to 31 December 2001
(£1,231,000 for the half year to December 2000 and £2,145,000 for the year to 30
June 2001).
Half year Year
31 December 2000 30 June 2001
_________________________________________ ________________________________________
Continuing Discontinued Continuing Discontinued
activities activities activities activities
Total Total
£000 £000 £000 £000 £000 £000
53,331 4,847 58,178 108,987 7,607 116,594
___________ ___________ _________ __________ ___________ _________
2,148 (392) 1,756 4,372 (482) 3,890
33 - 33 8 - 8
- - - - (562) (562)
(83) - (83) (328) - (328)
___________ ___________ _________ __________ ___________ _________
2,098 (392) 1,706 4,052 (1,044) 3,008
(634) 122 (512) (1,085) 157 (928)
___________ ___________ _________ __________ ___________ _________
1,464 (270) 1,194 2,967 (887) 2,080
37 - 37 65 - 65
___________ ___________ _________ __________ ___________ _________
1,501 (270) 1,231 3,032 (887) 2,145
892 - 892 2,948 - 2,948
___________ ___________ _________ __________ ___________ _________
609 (270) 339 84 (887) (803)
___________ ___________ _________ __________ ___________ _________
3.9p (0.7)p 3.2p 8.3p (2.5)p 5.8p
___________ ___________ _________ __________ ___________ _________
2.45p 8.5p
_________ _______-------_
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
for the half year to 31 December 2001
Half Year Half Year Year
31 December 31 December 30 June
2001 2000 2001
£000 £000 £000
Cash inflow from operating activities + 3,376 2,207 6,307
___________ ___________ _________
Returns on investments and servicing of finance
Net interest (226) (83) (328)
Dividends paid to minority shareholders (23) - -
___________ ___________ _________
(249) (83) (328)
___________ ___________ _________
Taxation
UK corporation tax paid (56) (825) (2,325)
___________ ___________ _________
Capital expenditure and financial investment
Purchase of tangible fixed assets (3,687) (2,215) (5,052)
Proceeds from sale of tangible fixed assets 132 470 547
___________ ___________ _________
(3,555) (1,745) (4,505)
___________ ___________ _________
Acquisitions and disposals
Proceeds from sale of business activities 380 - 1,220
Purchase of subsidiary undertaking - - (6)
Purchase of business activities - - (314)
___________ ___________ _________
380 - 900
___________ ___________ _________
___________ ___________ _________
Equity dividends paid (2,098) (2,358) (3,208)
___________ ___________ _________
Financing
Repurchase of ordinary share capital - (3,540) (5,752)
New finance leases 1,558 - -
Repayment of debt - (477) (784)
___________ ___________ _________
1,558 (4,017) (6,536)
___________ ___________ _________
Decrease in cash in the period (note 7) (644) (6,821) (9,695)
___________ ___________ _________
+ Reconciliation of operating profit to net cash inflow from operating activities
Operating profit 3,491 1,756 3,890
Depreciation 1,820 1,659 3,576
Amortisation of goodwill 6 9 5
Goodwill impairment - - 318
Loss / (profit) on disposal of tangible fixed assets/ 5 (66) (108)
investments
Increase in working capital (1,753) (847) (938)
Warranty and other provisions (193) (304) (436)
___________ ___________ _________
3,376 2,207 6,307
___________ ___________ _________
NOTES ON THE UNAUDITED ACCOUNTS
at 31 December 2001
1. BASIS OF PREPARATION
The interim financial statements for the half year ended 31 December 2001 have
been prepared in accordance with the accounting policies detailed in the 2001
Annual Report & Accounts except for the change in accounting policy as disclosed
in note 6. The financial information for the year ended 30 June 2001 is an
abridged version of the financial statements filed with the Registrar of
Companies, on which the auditors gave an unqualified report. The financial
information for the half year ended 31 December 2000 is restated for business
activities discontinued in the six months to 30 June 2001. The interim report
is being posted to shareholders and copies are available to the public at the
registered office, Burton Latimer, Kettering, Northamptonshire NN15 5JP.
2. TRADING
Half year Half year
31 December 2001 31 December 2000
Turnover Profit Turnover Profit
£000 £000 £000 £000
Engineering Products 39,244 2,141 37,301 1,550
Building Products 16,906 1,426 15,995 919
Leonardo 50 (56) 35 (288)
_______ ______ ______ ______
56,200 3,511 53,331 2,181
Discontinued - - 4,847 (392)
______ ______ ______ ______
56,200 3,511 58,178 1,789
______ ______
Interest (226) (83)
______ ______
Profit before tax 3,285 1,706
______ ______
3. TAXATION
The taxation provided is based on an estimated effective rate for the year. The
increased effective rate reflects the deferred tax recognised under Financial
Reporting Standard 19 (see note 6) on timing differences.
Half Year Half Year Year
31 December 31 December 30 June
2001 2000 2001
£000 £000 £000
Corporation tax 891 512 928
Deferred tax 129 - -
_____ _____ _____
1,020 512 928
_____ _____ _____
4. EARNINGS PER SHARE
Earnings per share is based on the weighted average number of ordinary shares in
issue for the period of 34,816,788 (31 December 2000: 38,101,476; year ended 30
June 2001: 36,718,322).
5. DIVIDENDS
The directors have declared an interim dividend per share of 2.45p (2000: 2.45p)
which will be paid on 8 April 2002 to shareholders on the register at the close
of business on 8 March 2002.
6. CHANGE IN ACCOUNTING POLICY
Alumasc has adopted Financial Reporting Standard 19 'Deferred Tax' in the
period. The main change arising from the adoption of this standard is that
deferred tax is recognised in respect of all timing differences that have
originated but not reversed at the balance sheet date. The effect of this
change on previous periods is insignificant; thus neither net assets at 31
December 2000 and 30 June 2001 nor profit after tax for the period to 31
December 2000 and year to 30 June 2001 have been adjusted.
7. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET (DEBT)/CASH
Half Year Half Year Year
31 December 31 December 30 June
2001 2000 2001
£000 £000 £000
Decrease in cash in period (644) (6,821) (9,695)
Cash (inflow) / outflow from change in debt and
lease financing (1,558) 477 784
______ ______ ______
Movement in net debt in the period (2,202) (6,344) (8,911)
Net (debt) / cash at start of period (4,072) 4,839 4,839
______ ______ ______
Net debt at end of period (6,274) (1,505) (4,072)
______ ______ ______
8. RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
Half Year Half Year Year
31 December 31 December 30 June
2001 2000 2001
£000 £000 £000
Retained profit / (loss) for the financial 1,414 339 (803)
period
Repurchase of shares - (3,540) (5,752)
Exchange difference - - (5)
______ ______ ______
Net addition to / (reduction in) shareholders'
funds 1,414 (3,201) (6,560)
Opening shareholders' funds 32,256 38,816 38,816
______ ______ ______
Closing shareholders' funds 33,670 35,615 32,256
______ ______ ______
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