Interim Results

Alumasc Group PLC 10 February 2005 Thursday 10 February 2005 THE ALUMASC GROUP PLC - INTERIM ANNOUNCEMENT Alumasc, the high specification engineering and building products group, announces its results for the half year ended 31 December 2004. Financial Highlights • Pre-tax profit on continuing activities of £3.5m (2003: £3.4m). • Trading profit on continuing activities of £4.3m (2003: £3.7m). • Earnings per share on continuing activities of 7.0p (2003: 6.9p). • Interim dividend per share of 3.0p (2003: 3.0p). • Net borrowings of £3.4m (gearing of 8.6%) at the seasonal high point of 31 December 2004 (2003: £1.9m), despite the £6.4m outflow on two acquisitions in the period. • The disposal in January of the loss-making G E Bissell generated a pre-tax loss on discontinued activities of £4.6m, including £3.3m of goodwill previously written off to reserves. Commercial Highlights • Alumasc Building Products, the Group's largest division, grew turnover by £2.8m to £21.9m, and operating profit by £0.4m to £2.5m. This strong performance was assisted by the acquisition of Roof-Pro Limited in July and of Timloc Building Products Limited in September, both of which performed well. • Alumasc Precision enjoyed mixed success, with weak demand from its automotive customers countering growth achieved in other areas. Overall, turnover declined by £1.3m and operating profit by £0.1m, to £16.4m and £1.15m respectively. • The Group's continuing Industrial Products activities advanced turnover by £2.0m and operating profit by £0.3m, to £18.6m and £0.7m respectively. Alumasc Dispense benefited from high demand from on-going projects with its Brewery customers and has new products under development using patented wireless energy transfer technology. With regard to prospects, John McCall, Chairman, stated "The bias in Alumasc's profit generation towards the second half year - an increasing feature of recent years - is expected to continue. Moreover, Alumasc's strong cash generation and sound balance sheet will ensure that the Group continues to exploit the opportunities which it has generated with its key customers and markets and to consider appropriate acquisitions in the Building Products sector." Enquiries: The Alumasc Group plc 01536-383 844 John McCall (Chairman) ) from 10.30 to 12.30 Paul Hooper (Chief Executive) ) 020-7588 7511 Bankside Consultants Limited Charles Ponsonby 020-7444 4166 Presentation: From 09.30 to 10.30 today, there will be a presentation to brokers' analysts and private client investment advisers at the offices of Williams de Broe, 6 Broadgate, London EC2M 2RP. Chairman's Statement Overview The Group earned profits before tax from continuing activities of £3.5 million in the six months to December 2004, £0.1 million ahead of those in the first half of the previous year. Earnings in the half-year were 7.0p per share on this basis (2003: 6.9p). The Board has declared an unchanged interim dividend of 3.0p per share. Our continuing activities earned trading profits (before interest, goodwill and pensions deficit charges) of £4.3 million in the period, £0.6 million higher than in the previous year, and the margin on turnover rose from 7.0% to 7.5%. The Building Products and Industrial Products divisions moved strongly ahead in the period, while Precision Components, which is being re-positioned to become less dependent on automotive customers, achieved slightly lower turnover and profit. Interest costs rose marginally to £0.2 million on net borrowings of £3.4 million at the seasonal high point of 31 December 2004, giving gearing of 8.6%. This increase in borrowings over £1.9 million twelve months earlier reflects two acquisitions in the period at a cash cost of £6.4 million. The cost of funding the Group's pensions deficit increased by £0.34 million to £0.5 million. The reported pre-tax loss of £1.1 million includes the loss incurred on the sale of the non-core, loss-making G E Bissell business, including re-charging the profit and loss account with £3.3 million of goodwill previously written off to reserves. Operations Alumasc Building Products, the Group's largest division, grew turnover by £2.8 million to £21.9 million, and operating profit by £0.4 million to £2.5 million. This strong performance was assisted by the acquisition of Roof-Pro Limited in July and of Timloc Building Products Limited in September, both of whom performed in line with expectations. The success of newer products also contributed to the division's advance and will help to drive future growth. Alumasc Precision enjoyed mixed success, with weak demand from its automotive customers countering the growth achieved in other areas. Overall, turnover declined by £1.3 million and operating profit by £0.1 million, to £16.4 million and £1.15 million respectively. In the light of this continuing decline in automotive activity and the development into other market areas, the Board is actively reviewing with management and employees the options for re-aligning capacity in the division to meet the future needs of our customers while enhancing divisional profitability. The Group's continuing Industrial Products activities advanced turnover by £2.0 million and operating profit by £0.3 million, to £18.6 million and £0.7 million respectively. Alumasc Dispense benefited from higher demand from on-going projects with its Brewery customers. A number of new products are under development, including a particularly exciting project utilising patented wireless energy transfer technology under licence. Brock Metals was little changed from the previous year. Development Two building products companies were acquired during the half year- Roof-Pro Limited and Timloc Building Products Limited - at a combined cost of £6.4 million, in line with our strategy for growing the Building Products division organically and through add-on acquisitions. Both businesses have performed well since acquisition and are proving useful extensions to our market presence. Since the end of the period, G E Bissell, the small loss-making Industrial Products business, has been sold and the proceeds will be used to develop our core activities. Bissell is treated as discontinued in the half year accounts. Goodwill of £3.3 million, written off to reserves in 1995, has been accounted for in accordance with FRS 2. Prospects The bias in Alumasc's profit generation towards the second half year - an increasing feature of recent years - is expected to continue. Moreover, Alumasc's strong cash generation and sound balance sheet will ensure that the Group continues to exploit the opportunities which it has generated with its key customers and markets, and to consider appropriate acquisitions in the Building Products sector. John McCall Chairman 10 February 2005 Unaudited Consolidated Profit and Loss Account for the half year to 31 December 2004 Half year 31 December 2004 Half year 31 December 2003 Year to 30 June 2004 ________________________________ ________________________________ ________________________________ Continuing Discontinued Continuing Discontinued Continuing Discontinued activities activities Total activities activities Total activities activities Total Notes £000 £000 £000 £000 £000 £000 £000 £000 £000 Turnover Existing operations 54,403 - 54,403 53,404 - 53,404 112,358 - 112,358 Acquisitions 2,519 - 2,519 - - - - - - Discontinued operations - 1,356 1,356 - 1,406 1,406 - 2,954 2,954 ________________________________ ________________________________ ________________________________ 2 56,922 1,356 58,278 53,404 1,406 54,810 112,358 2,954 115,312 Operating profit/ (loss) ________________________________ ________________________________ ________________________________ Before goodwill amortisation 3,768 (206) 3,562 3,538 (122) 3,416 8,476 (230) 8,246 Goodwill amortisation (107) - (107) - - - - - - ________________________________ ________________________________ ________________________________ ________________________________ ________________________________ ________________________________ Existing operations 3,223 - 3,223 3,538 - 3,538 8,476 - 8,476 Acquisitions 438 - 438 - - - - - - Discontinued operations - (206) (206) - (122) (122) - (230) (230) ________________________________ ________________________________ ________________________________ Operating profit/ (loss) 2 3,661 (206) 3,455 3,538 (122) 3,416 8,476 (230) 8,246 Share of operating profit in associates 2 30 - 30 25 - 25 50 - 50 Profit on fixed asset disposals - - - - - - 880 - 880 Loss on business disposal: ________________________________ ________________________________ ________________________________ Loss on sale - (1,129) (1,129) - - - - - - Goodwill write back - (3,260) (3,260) - - - - - - ________________________________ ________________________________ ________________________________ - (4,389) (4,389) - - - - - - ________________________________ ________________________________ ________________________________ Profit/ (loss) on ordinary activities before interest 3,691 (4,595) (904) 3,563 (122) 3,441 9,406 (230) 9,176 Net interest payable (160) - (160) (123) - (123) (229) - (229) ________________________________ ________________________________ ________________________________ Profit/ (loss) on ordinary activities before tax 3,531 (4,595) (1,064) 3,440 (122) 3,318 9,177 (230) 8,947 Tax on profit on ordinary activities 4 (1,094) 294 (800) (1,021) 36 (985) (2,526) 67 (2,459) ________________________________ ________________________________ ________________________________ Profit/ (loss) on ordinary activities after tax 2,437 (4,301) (1,864) 2,419 (86) 2,333 6,651 (163) 6,488 Equity minority interest - - - (11) - (11) (7) - (7) ________________________________ ________________________________ ________________________________ Profit/ (loss) for financial period attributable to shareholders 2,437 (4,301) (1,864) 2,408 (86) 2,322 6,644 (163) 6,481 Dividends (1,060) - (1,060) (1,041) - (1,041) (3,225) - (3,225) ________________________________ ________________________________ ________________________________ Retained profit/ (loss) for the financial period 1,377 (4,301) (2,924) 1,367 (86) 1,281 3,419 (163) 3,256 ________________________________ ________________________________ ________________________________ Basic earnings per share 5 7.0p (12.3)p (5.3)p 6.9p (0.2)p 6.7p 19.1p (0.5)p 18.6p Diluted earnings per share 5 6.9p (12.2)p (5.3)p 6.8p (0.2)p 6.6p 19.0p (0.5)p 18.5p Dividend per share 6 3.0p 3.0p 9.3p Unaudited Consolidated Balance Sheet at 31 December 2004 Restated* 31 December 31 December 30 June 2004 2003 2004 £000 £000 £000 ____________________________________ Fixed assets Intangible assets 5,269 54 50 Tangible assets 26,274 27,901 25,901 Investments 515 493 515 ____________________________________ 32,058 28,448 26,466 ____________________________________ Current assets Stocks 12,835 11,830 11,745 Debtors 24,807 21,904 26,875 Cash at bank and in hand - 816 5,625 ____________________________________ 37,642 34,550 44,245 ____________________________________ Creditors: amounts falling due within one year Bank overdraft 1,487 - - Trade and other creditors 23,511 19,653 24,966 Taxation 807 1,132 1,151 Proposed dividend 1,048 1,041 2,185 ____________________________________ 26,853 21,826 28,302 ____________________________________ Net current assets 10,789 12,724 15,943 ____________________________________ Total assets less current liabilities 42,847 41,172 42,409 Creditors: amounts falling due after more than one year 1,519 2,966 1,907 Provisions for liabilities and charges 1,336 825 1,040 Equity minority interest 28 31 28 ____________________________________ Net assets 39,964 37,350 39,434 ____________________________________ Capital and reserves Called up share capital 4,383 4,352 4,352 Share premium 27,156 26,907 26,909 Revaluation reserve 1,727 1,874 1,727 Capital redemption reserve 693 693 693 Capital reserve - own shares (247) (164) (164) Profit and loss account 6,252 3,688 5,917 ____________________________________ Equity shareholders' funds 39,964 37,350 39,434 ____________________________________ * Comparative figures have been restated to reflect treatment in accordance with UITF 38. Unaudited Consolidated Statement of Recognised Gains and Losses For the half year to 31 December 2004 Half year Half year Year 31 December 31 December 30 June 2004 2003 2004 £000 £000 £000 ___________________________________________________________________________________________________________________ (Loss)/profit for the financial period attributable to shareholders (1,864) 2,322 6,481 Currency translation differences on foreign currency net investments - - (6) ___________________________________________________________________________________________________________________ Total recognised gains and losses for the period (1,864) 2,322 6,475 ___________________________________________________________________________________________________________________ Unaudited Reconciliation of Movement in Shareholders' Funds For the half year to 31 December 2004 Half year Half year Year 31 December 31 December 30 June 2004 2003 2004 £000 £000 £000 ______________________________________________________________________________________________ Retained (loss)/profit for the financial period (2,924) 1,281 3,256 Exchange difference - - (6) Issue of shares 278 - 2 UITF 17 charge on long term incentive plan - - 113 Movement on capital reserve - own shares (84) - - Goodwill transferred to profit and loss account 3,260 - - ______________________________________________________________________________________________ Net increase in shareholders' funds 530 1,281 3,365 Opening shareholders' funds 39,434 *36,069 *36,069 ______________________________________________________________________________________________ Closing shareholders' funds 39,964 37,350 39,434 ______________________________________________________________________________________________ * As restated Unaudited Consolidated Cash Flow Statement for the half year to 31 December 2004 Half year Half year Year 31 December 31 December 30 June 2004 2003 2004 £000 £000 £000 ______________________________________________________________________________________________ Net cash inflow from operating activities 4,479 1,088 9,637 ______________________________________________________________________________________________ Returns on investments and servicing of finance Net interest paid (160) (123) (229) Dividends paid to minority shareholders (15) (16) (15) ______________________________________________________________________________________________ (175) (139) (244) ______________________________________________________________________________________________ Taxation UK corporation tax paid (1,252) (963) (2,192) ______________________________________________________________________________________________ Capital expenditure and financial investment Purchase of tangible fixed assets (1,405) (1,505) (2,490) Proceeds from sale of tangible fixed assets 32 273 264 ______________________________________________________________________________________________ (1,373) (1,232) (2,226) ______________________________________________________________________________________________ Acquisitions and disposals Purchase of subsidiary undertakings (7,351) - - Net cash acquired with subsidiary undertakings 865 - - ______________________________________________________________________________________________ (6,486) - - ______________________________________________________________________________________________ Equity dividends paid (2,197) (2,185) (3,225) ______________________________________________________________________________________________ Financing Issue of ordinary share capital 278 - 2 Repayment of amounts borrowed (386) (361) (735) ______________________________________________________________________________________________ (108) (361) (733) ______________________________________________________________________________________________ (Decrease)/increase in cash in the period (7,112) (3,792) 1,017 ______________________________________________________________________________________________ Reconciliation of operating profit to net cash inflow from operating activities Operating profit 3,455 3,416 8,246 Business disposal costs (1,129) - - Depreciation 2,292 1,720 3,643 Amortisation of goodwill 107 4 8 (Profit)/loss on disposal of tangible fixed (8) 22 10 assets Increase in working capital* (922) (3,752) (1,350) Increase/(decrease) in warranty and other provisions 684 (322) (920) ______________________________________________________________________________________________ 4,479 1,088 9,637 ______________________________________________________________________________________________ * Included within the movement in working capital for the half year to 31 December 2004 are proceeds received of £2.0 million from the sale of land at the Burton-upon-Trent site, the sale of which occurred in the year to 30 June 2004. Notes on the Unaudited Accounts for the half year to 31 December 2004 1. Basis of preparation The interim financial statements for the half year ended 31 December 2004 are not statutory accounts. They have been prepared in accordance with the accounting policies detailed in the 2004 annual report and accounts, but they have been neither audited nor reviewed by the Group's auditors. The financial information for the year ended 30 June 2004 is an abridged version of the financial statements filed with the Registrar of Companies, on which the auditors gave an unqualified report. 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. Analysis of turnover and profit before tax Half year 31 December 2004 Half year 31 December 2003 Continuing activities Total Continuing activities Total Turnover Profit Turnover Profit Turnover Profit Turnover Profit £000 £000 £000 £000 £000 £000 £000 £000 Building Products 21,853 2,457 21,853 2,457 19,098 2,083 19,098 2,083 Engineering Products - Precision Components 16,410 1,148 16,410 1,148 17,740 1,224 17,740 1,224 - Industrial Products 18,659 687 20,015 481 16,566 407 17,972 285 ________________________________________________________________________________________________________________________ 56,922 4,292 58,278 4,086 53,404 3,714 54,810 3,592 Pension deficit cost (494) (494) (151) (151) Goodwill (107) (107) - - ________________________________________________________________________________________________________________________ Operating profit including associates 3,691 3,485 3,563 3,441 Loss on business disposal - (1,129) - - Goodwill write back - (3,260) - - Interest (160) (160) (123) (123) ________________________________________________________________________________________________________________________ Profit/(loss) before tax 3,531 (1,064) 3,440 3,318 ________________________________________________________________________________________________________________________ Goodwill amortisation in the period relates wholly to Building Products. The amounts disclosed as pension deficit cost have been shown separately because they relate to closed schemes, 90% of whose members are not now employed by the Group. 3. Activities discontinued Discontinued activities in the period comprise the sale of the business and certain assets of G E Bissell and Co, a manufacturer and supplier of spring pins and disc springs, on 14 January 2005. The loss on disposal comprises a write-down of retained freehold property, costs and an estimated loss on stock which will be paid for by the purchaser at a rate and value dependent on usage. Goodwill which was written off to reserves on acquisition in 1995 has been transferred back through the Profit and Loss Account in accordance with FRS 2. Notes on the Unaudited Accounts for the half year to 31 December 2004 4. Taxation The taxation provided is based on an estimated effective rate for the year. Half year Half year Year 31 December 31 December 30 June 2004 2003 2004 £000 £000 £000 ____________________________________________________________________________________ Current tax - UK Corporation tax 610 893 2,114 - Foreign tax - - 27 Share of associate's current tax - overseas - - 28 Deferred tax 190 92 290 ____________________________________________________________________________________ 800 985 2,459 ____________________________________________________________________________________ 5. Earnings per share Earnings per share is based on the weighted average number of ordinary shares in issue for the period of 34,924,462 (31 December 2003: 34,817,305, year ended 30 June 2004: 34,817,592). Diluted earnings per share is based on the weighted average number of ordinary shares in issue during the period, after allowing for the exercise of outstanding share options, of 35,093,754 (31 December 2003: 34,988,648, year ended 30 June 2004: 34,980,410). 6. Dividends The directors have declared an interim dividend per share of 3.0p (2003: 3.0p) which will be paid on 6 April 2005 to shareholders on the register at the close of business on 11 March 2005. 7. Acquisitions The Group acquired two building product businesses during the six months to 31 December 2004. £000 _________________________________________________________________________ Total cost including deferred consideration and cash acquired 7,501 Provisional fair value to the Group of the net assets acquired 2,175 _________________________________________________________________________ Goodwill 5,326 _________________________________________________________________________ 8. Reconciliation of net cash flow to movement in net (debt)/cash Half year Half year Year 31 December 31 December 30 June 2004 2003 2004 £000 £000 £000 ___________________________________________________________________________________________________ (Decrease)/increase in cash in the period (7,112) (3,792) 1,017 Repayment of debt 386 361 735 ___________________________________________________________________________________________________ Change in net (debt)/cash from cash flows in the period (6,726) (3,431) 1,752 ___________________________________________________________________________________________________ Net cash at start of period 3,288 1,536 1,536 ___________________________________________________________________________________________________ Net (debt)/cash at end of period (3,438) (1,895) 3,288 ___________________________________________________________________________________________________ This information is provided by RNS The company news service from the London Stock Exchange

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