Interim Results
ASCOT PLC
8 September 1999
Contacts: Howard Dyer, Executive Chairman
Martin Rogers, Group Finance Director
Ascot Plc 0171 815 0805
David Bick/Becky Jewers
Holborn Public Relations 0171 929 5599
david_bick@holbornpr.co.uk
becky_jewers@holbornpr.co.uk
Ascot Plc
Interim Results for the six months
ending 30 June 1999
Sales rose by 63% to £159.4m
Operating profit up 43% to £20.7m, before goodwill amortisation
26% increase in adjusted, diluted earnings per share to 17.9p
Interim dividend of 4.0p, up 14%
Major progress in integrating Haltermann, acquired December 1998
Net debt reduced by £16.7m to £125.2m
Appointment of Finance Director
Commenting on the interim results, Ascot's Executive Chairman,
Howard Dyer, said:
'For the first half of 1999, the Group achieved record sales
and profits, a significant increase in earnings per share
and major progress in integrating its recent acquisition of
Haltermann. The 30% investment in ChiroTech produced a
very satisfactory operating profit contribution as well as
access to an expanding product pipeline. Overall, we
expect further progress in the second half.'
CHAIRMAN'S STATEMENT
I am pleased to report an encouraging performance for the
first half of 1999. The Group achieved record sales and
profits, a significant increase in earnings per share and
major progress in integrating its recent acquisition of
Haltermann.
Results
For the half year to 30 June 1999, the operating profit of
£20.7m was 43% higher than in the first half of last year,
and profit before tax at £18.2m represented an improvement
of 29% compared with last year, both of these stated before
goodwill amortisation of £2.5m in 1999 (1998: £Nil).
Sales rose by 63% to £159.4m. Adjusted, diluted earnings
per share of 17.9p rose by 26%, reflecting the strong
operational performance as well as the benefit of the
return of capital in May last year. Your board is
declaring an interim dividend of 4.0p per share, an
increase of 14% over last year.
Net debt fell from £141.9m to £125.2m during the period
after capital investment of £8.5m and the repurchase of
warrants for £1.7m, which will enhance future diluted
earnings per share. In the first quarter, £70m of bank
debt was refinanced, resulting in bank security being
released. Interest cover is comfortable at 6.5 times.
Operations
Profits in the Chemical Engineering Division increased
through a strong performance by our recent acquisitions.
Fine Chemicals enjoyed a good first half, particularly in
the supply of active pharmaceutical ingredients. The 30%
investment in ChiroTech, the drug development company,
produced a very satisfactory operating profit contribution
of £2.3m as well as access to an expanding product
pipeline.
Speciality Chemicals posted strong results, with Haltermann
generating operating profit of £7.7m on sales of £71.4m.
Its Belgian and German businesses, in particular, have
outperformed expectations. In the UK, weak markets have
been experienced but signs of an improvement in demand are
appearing.
The acquisition of Haltermann at the end of last year
established Ascot as the world's largest independent
chemicals custom processing company. The integration of
Haltermann with Ascot's existing speciality chemicals
operations is progressing well. In order to drive long
term growth, the own products and custom processing
activities have been separated and dedicated management
teams created to provide improved focus on their respective
businesses.
Profits in the Specialist Engineering Division declined as
a result of weakness in refrigeration markets caused mainly
by deferral of capital investment plans and low demand for
service components and air conditioning units. In response
to this lower level of activity, costs have been reduced
and business development programmes implemented.The smaller
engineering businesses achieved a marginal increase in
profits against the background of a generally soft UK
engineering market.
Divestments
We have continued to divest of non core assets and during
the half year 23 properties were sold. Including amounts
received from an associate company, gross sales proceeds
were £10.3m, being at a premium to book value.
Management
I am delighted that Martin Rogers has joined the board as
Group Finance Director. His appointment strengthens our
central management team and I am sure that his experience
will prove to be invaluable to the Group.
Millennium
The Group's programme to address the potential impact of
the Millennium date change on its businesses is well
advanced. The Board is confident that the programme will
be completed in good time.
Outlook
For the remainder of the year, we are expecting
refrigeration to show some improvement and general
engineering to remain stable. In Fine Chemicals, orders
for our product used in the recently launched anti-AIDs
drug will be lower in the second half owing to high levels
of stocks built both for launch and in advance of Year
2000. In Speciality Chemicals, Haltermann's order books
remain strong and some improvement is beginning to be seen
in the UK. Overall, we expect further progress in the
second half.
Consolidated profit and loss account
(Unaudited)
Notes Period ended Period ended Year ended
30 June 4 July 31 December
1999 1998 1998
£m £m £m
Turnover
all continuing operations 2 159.4 97.9 185.6
===== ==== ====
Operating profit from continuing operations
before goodwill amortisation 16.8 14.5 27.9
Amortisation of goodwill arising on
acquisition of subsidiary (1.7) - -
_____ _____ _____
Operating profit 15.1 14.5 27.9
----- ----- -----
Share of operating profit of associates 3.9 - 2.3
Amortisation of goodwill on investment
in associates (0.8) - (0.5)
3.1 - 1.8
Total operating profit: including Associates 18.2 14.5 29.7
Continuing operations
Profit/(loss) on disposal of fixed assets
and investments - 0.2 (0.4)
Amounts written back on investments 0.7 - 1.0
_____ _____ _____
Profit on ordinary activities
before interest 18.9 14.7 30.3
Interest payable less
interest receivable (3.2) (0.6) (3.3)
_____ _____ _____
Profit on ordinary activities
before taxation 15.7 14.1 27.0
Taxation 3 (3.8) (2.9) (5.6)
_____ _____ _____
Profit on ordinary activities
after taxation 11.9 11.2 21.4
Dividends (3.0) (2.2) (7.9)
_____ _____ _____
Retained profit for the period 8.9 9.0 13.5
===== ===== =====
Earnings per share 4
- basic 15.7p 14.8p 30.9p
- diluted 15.5p 14.4p 30.1p
Adjusted earnings per share
- basic 18.1p 14.6p 30.8p
-diluted 17.9p 14.2p 30.0p
Dividend per share 5 4.0p 3.5p 11.0p
Consolidated balance sheet
(Unaudited)
Note 30 June 4 July 31 December
1999 1998 1998
£m £m £m
Fixed Assets
Intangibles 65.3 - 67.0
Tangible assets 138.9 73.8 142.1
Investments 31.3 7.1 36.1
_____ _____ _____
235.5 80.9 245.2
Current Assets
Stocks 42.0 29.3 47.3
Assets for resale 0.8 3.0 1.8
Debtors 48.2 44.8 57.1
Investments - 0.3 -
Cash at bank and in hand 21.5 5.2 16.2
_____ _____ _____
112.5 82.6 122.4
Creditors: Amounts falling due
within one year
Bank and other loans (2.1) (1.4) (30.1)
Other creditors (75.3) (72.8) (90.8)
_____ _____ _____
Net current assets 35.1 8.4 1.5
_____ _____ _____
Total assets less current
liabilities 270.6 89.3 246.7
Creditors:
Amounts falling due
after more than one year
Bank and other loans (144.6) (52.4) (128.0)
Other creditors (3.5) (4.2) (6.5)
Deferred taxation (11.7) (5.3) (11.7)
Other provisions (41.6) (0.4) (40.1)
_____ _____ _____
Net assets 69.2 27.0 60.4
===== ===== =====
Capital and reserves 7
Called up share capital 9.8 10.0 9.8
Share premium account 41.4 13.6 42.3
Revaluation reserve 5.1 4.8 5.1
Other reserves 55.4 54.2 56.0
Profit and loss account (42.5) (55.6) (52.8)
_____ _____ _____
Shareholders' funds 69.2 27.0 60.4
===== ===== =====
Shareholders' funds include non equity shareholders' funds of
£Nil (4 July 1998 £1.8m,
31 December 1998 £Nil).
Consolidated cash flow statement
(Unaudited)
Period Period Year
ended ended ended
30 June 4 July 31 December
1999 1998 1998
£m £m £m
Operating Activities
Operating profit 15.1 14.5 27.9
Depreciation 9.4 2.9 6.1
Increase in working capital (4.3) (9.8) (12.1)
Acquisition reorganisation
spend against provisions - (0.3) (0.7)
Increase in provisions 1.7 - -
Other non cash items (0.8) (0.1) (0.6)
Net cash inflow from operating
activities 21.1 7.2 20.6
Dividends from associates 1.5 - -
Returns on investment and
servicing of finance
Interest received - 0.1 0.5
Interest paid (4.1) (0.7) (3.6)
Net cash outflow from returns
on investments and servicing
of finance (4.1) (0.6) (3.1)
Taxation
Tax paid (1.9) (0.6) (2.5)
Capital expenditure and
financial investment
Additions to investment
properties and other fixed
assets (8.5) (7.3) (14.1)
Disposals of investment properties
and other fixed assets 4.0 4.4 6.1
Disposal of current investments - 0.9 1.0
____ _____ _____
Net cash outflow from capital
expenditure and financial
investment (4.5) (2.0) (7.0)
Acquisitions and disposals
Acquisition of business
including costs (4.1) - (57.5)
Acquisition of associate - - (30.9)
Net cash outflow from
acquisitions and disposals (4.1) - (88.4)
Equity dividends paid - (4.7) (7.1)
Management of liquid
resources (12.3) - 3.6
Financing activities
Decrease in loans to associates 6.3 - 4.9
Issue of ordinary shares less
costs (0.9) 0.6 0.6
Repayment of B shares - (48.9) (50.7)
Additional bank loans 35.0 47.0 133.7
Repayment of loan notes, bonds
and bank loans (38.4) - (0.5)
Cancellation of warrants (1.7) - -
Net cash inflow/(outflow) from
financing activities 0.3 (1.3) 88.0
(Decrease)/increase in cash (4.0) (2.0) 4.1
Note: Reconciliation of movement in net borrowings
Period Period Year
ended ended ended
30 June 4 July 31 December
1999 1998 1998
£m £m £m
(Decrease)/increase in cash in the
period (4.0) (2.0) 4.1
Increase/(decrease) in liquid resources 12.3 - (3.6)
Repayment of bonds, bank
borrowings and bank loans 38.4 - 0.5
Bank loan drawdown (35.0) (47.0) (133.7)
_____ _____ _____
Change in net debt resulting
from cash flows 11.7 (49.0) (132.7)
Exchange rate movement 5.0 - -
Loans acquired with Haltermann - - (9.6)
_____ _____ _____
16.7 (49.0) (142.3)
Net (debt)/cash at start of period (141.9) 0.4 0.4
Net debt at end of period (125.2) (48.6) (141.9)
Statement of total recognised gains and losses
Period Period Year
ended ended ended
30 June 4 July 31 December
1999 1998 1998
£m £m £m
Profit on ordinary activities after
taxation 11.9 11.2 21.4
Exchange movement on overseas net assets 2.5 (0.1) 0.3
Cancellation of warrants (1.1) - -
_____ _____ ____
13.3 11.1 21.7
===== ===== ====
Notes
1. Basis of preparation
The financial information contained in this interim
statement is unaudited and does not constitute
statutory accounts as defined in section 240 of the
Companies Act 1985. The financial information for the
full preceding period represents an abridged extract
based on the statutory accounts for the financial
period ended 31 December 1998. The financial
information has been prepared on the same basis and
applying the same accounting policies as in prior
years, except for the adoption this year of Financial
Reporting Standard 12. There has been no material
impact on the interim statement by complying with
Financial Reporting Standard 12 Those accounts for
the financial period ended 31 December 1998, upon which
the auditors issued an unqualified opinion, have been
delivered to the Registrar of Companies.
2. Business segment analysis
Period ended Period ended Year ended
30 June 1999 4 July 1998 31 December 1998
Operating Operating Operating
Turnover profit Turnover profit Turnover profit
£m £m £m £m £m £m
Specialist Engineering 55.4 6.0 62.1 8.2 120.4 16.1
Chemical Engineering 100.7 15.2 31.9 6.6 58.6 14.6
Properties 3.3 1.8 3.9 1.8 6.6 3.7
Central costs - (2.3) - (2.1) - (4.2)
Amortisation of
goodwill arising on:
- acquisition
of subsidiary - (1.7) - - - -
- investment in
associate - (0.8) - - - (0.5)
_____ _____ ____ _____ _____ _____
Turnover/total
operating profit 159.4 18.2 97.9 14.5 185.6 29.7
Share of associates
operating profit
included in:
- Chemical
Engineering - (1.5) - - - (1.6)
- Properties - (1.6) - - - (0.2)
_____ _____ ____ _____ _____ _____
Turnover/operating
profit 159.4 15.1 97.9 14.5 185.6 27.9
3. Taxation
The charge for taxation comprises
Period Period Year
ended ended ended
30 June 4 July 31 December
1999 1998 1998
£m £m £m
UK taxation at 30.5% (1998:31%) 1.9 2.4 2.9
UK deferred tax - - 1.8
Advance Corporation Tax - (0.4) -
Overseas taxation 1.2 0.9 0.2
Tax on Associated income 0.7 - 0.7
____ ____ ____
3.8 2.9 5.6
____ ____ ____
The tax charge is an estimate based upon the anticipated charge for the full
year.
4. Earnings per share
Period Period Year
ended ended ended
30 June 4 July 31 December
1999 1998 1998
Earnings - basic £11.9m £11.2m £21.4m
Average number of
ordinary shares 75.7m 75.6m 69.2m
Earnings per share
- basic 15.7p 14.8p 30.9p
Earnings - diluted £11.9m £11.2m £21.4m
Average number of
ordinary shares
- diluted 76.6m 77.6m 71.0m
Earnings per share
- diluted 15.5p 14.4p 30.1p
Earnings per share 15.7p 14.8p 30.9p
Exclusion of
(profits)/loss
on disposal of fixed
assets and investments - (0.2)p 0.6p
Exclusion of amounts
written back on
investments (0.9)p - (1.4)p
Exclusion of goodwill
amortisation 3.3p - 0.7p
____ ____ _____
Adjusted earnings per share
- basic 18.1p 14.6p 30.8p
- diluted 17.9p 14.2p 30.0p
The number of shares used in the calculation of basic
earnings per share and diluted earnings per share has
been calculated in accordance with Financial Reporting
Standard 14. The diluted earnings per share
calculations are based on the average number of
ordinary shares used in the basic earnings per share
calculation, with an adjustment to reflect the bonus
element of the average number of warrants and options
outstanding during the year. The bonus element of
warrants and options arises when the exercise price is
lower than the average market price during the year.
The earnings per share comparatives have not been
adjusted to reflect the return of capital to
shareholders, in accordance with Financial Reporting
Standard 14.
5. Dividends
Period Year
ended ended
30 June 31 December
1999 1998
Pence Pence
per share £m per share £m
Dividends on ordinary
shares
Interim 4.0p 3.0 3.5p 2.2
Final 7.5p 5.7
11.0p 7.9
___ ___
6. Reconciliation of movement in shareholders' funds
Period ended
30 June 1999
£m
Opening shareholders' funds 60.4
Profit for the period 11.9
Dividends (3.0)
Exchange movements on overseas net assets 2.5
Share issue costs (0.9)
Cancellation of warrants (1.7)
Closing shareholders' funds 69.2
7. Reserves
Share Revaluation Warrant Capital Profit
premium reserve reserve redemption loss
£m £m £m £m £m
At 31 December 1998 42.3 5.1 0.6 55.4 (52.8)
Retained profit - - - - 8.9
Share issue costs (0.9) - - - -
Exchange movement - - - - 2.5
Cancellation
of warrants - - (0.6) - (1.1)
At 30 June 1999 41.4 5.1 - 55.4 (42.5)
Independent review report to Ascot Plc
Introduction
We have been instructed by the company to review the
financial information set out on pages 1 to 10 and we
have read the other information contained in the interim
report for any apparent misstatements or material
inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information
contained therein, is the responsibility of, and has been
approved by, the directors. The Listing Rules of the
London Stock Exchange require that the accounting
policies and presentation applied to the interim figures
should be consistent with those applied in preparing the
preceding annual accounts except where any changes, and
the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance
contained in Bulletin 1999/4 issued by the Auditing
Practices Board. A review consists principally of making
enquiries of group management and applying analytical
procedures to the financial information and underlying
financial data, and based thereon, assessing whether the
accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review
excludes audit procedures such as tests of controls and
verification of assets, liabilities and transactions. It
is substantially less in scope than an audit performed in
accordance with Auditing Standards and therefore provides
a lower level of assurance than an audit. Accordingly we
do not express an audit opinion on the financial
information.
Review conclusion
On the basis of our review we are not aware of any
material modifications that should be made to the
financial information as presented for the six months
ended 30 June 1999.
PricewaterhouseCoopers
Chartered Accountants
Derby
7 September 1999
Tuesday, 14th May 2024
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