Interim Results for the 6 mths ended 31 March 2011

RNS Number : 0367I

Dewhurst PLC

08 June 2011

 



Dewhurst plc

Interim Results for the 6 months ended 31 March 2011

Directors' Interim Report

FIRST HALF

Group turnover was up 9% at £19.4 million compared to £17.8 million last year but profit before tax fell 8% to £2.0 million (2010: £2.2 million).  Earnings per share also decreased 8% to 16.4p (2010: 17.9p). 

Sales performance benefited from the first time contributions of our recent acquisitions of ERM and Winter & Bain in the US and JAS Engineering in Australia, referred to below.  Excluding these new businesses, sales performance was essentially flat. UK sales fell in a difficult market in all three product divisions.  Overseas sales were steady in local currency, but gained a little from foreign exchange movements.

The weak market has dented profitability in the UK and disappointingly the US acquisitions are not yet contributing to Group profits.  We are facing ever increasing cost pressures which we have not been able to pass on to our customers.  Although reported sales have benefited from currency translation, exchange rates have had an adverse impact this year on profits particularly in Hungary, where the currency has been quite volatile.

ACQUISITIONS

On 1 December 2010, JAS Engineering (Australia) Pty Limited, a newly formed and wholly owned Australian subsidiary of Dewhurst plc, acquired the business and assets of J.A.S. Engineering (NSW) Pty Limited for a maximum cash consideration of A$1.5 million (£0.9 million).

On 20 December 2010, Dewhurst plc acquired further shares in Elevator Research & Manufacturing Corp. ("ERM") and Winter & Bain Manufacturing, Inc. ("W&B"), both US corporations under common control which specialise in the lift market. The Group acquired an additional stake in ERM (50%) and W&B (41.67%) for a total cash consideration of US$1.8 million (£1.2 million). The Group now has a 75% stake in ERM and an 83.34% stake in W&B. 

OUTLOOK

Public sector spending in the UK has been significantly reduced and the Board anticipate that this is likely to persist over the next few years.  There is currently no sign of growth in private sector demand taking up the slack from the public sector.  These factors are negatively affecting our UK Lift and Transport Divisions.  Overseas the market is not buoyant, but it is generally stable, apart from the US, which is appropriately described by economic commentators as "soft".  We still expect our US business to contribute positively to the Group as market conditions return to more normal levels.

Work on our new UK factory and headquarters continues according to plan.  We currently expect to be moving in to the new premises in the first half of the next financial year. This investment has absorbed a significant portion of the Group's cash in the short term, leaving us with cash of £3.1 million (2010: £8.8 million) at the half year end. It is still currently the directors' intention to place the existing premises up for sale following our move and we anticipate this will significantly improve the cash position of the Group.

DIVIDENDS

The Directors have declared an interim dividend of 2.23p which amounts to £190,000, compared with 2.12p last year (£180,000).  The interim dividend is payable on 30 August 2011 and will be posted on 25 August 2011 to shareholders appearing in the Register at 3:00 p.m. on 15 July 2011 (ex-dividend date being 13 July 2011).

A final 2010 dividend of 4.24p which amounted to £361,000, compared with 4.04p previous year (£344,000) was approved at the AGM held on 27 January 2011 and was paid on 15 February 2011 to members on the register at 14 January 2011.

By Order of the Board

J C SINCLAIR

Finance Director & Secretary

7 June 2011

The unaudited consolidated income statement, statement of recognised income and expense, balance sheet and cash flow statement of Dewhurst plc and its subsidiaries for the half-year ended 31 March 2011, as compared with the corresponding half-year ended 31 March 2010 and the year ended 30 September 2010, shows the following results:

Consolidated income statement

	Half year ended	Half year ended	Year  ended
	31 March 2011	31 March 2010	30 September 2010
Continuing operations	£(000)'s	£(000)'s	£(000)'s
Revenue	19,409	17,843	36,975
Operating costs	(17,359)	(15,637)	(32,104)
Operating profit	2,050	2,206	4,871
Share of (loss)/profit from associates	(21)	-	6
Finance income	37	46	103
Finance costs	(63)	(70)	(153)
Profit before taxation	2,003	2,182	4,827
Tax on profits	Est. (605)	Est. (655)	(1,339)
Profit for the period	1,398	1,527	3,488
Attributable to:
Equity shareholders of the Company	1,411	1,527	3,488
Non-controlling interests	(13)	-	-
	1,398	1,527	3,488
Basic and diluted earnings per share	16.43p	17.94p	40.97p
Dividends per share	2.23p	2.12p	6.36p

Consolidated statement of recognised income and expense

	Half year ended	Half year ended	Year  ended
Net income/(expense) recognised	31 March 2011	31 March 2010	30 September 2010
directly in equity:	£(000)'s	£(000)'s	£(000)'s
Actuarial gains/(losses) on the defined benefit pension scheme	Est. 583	Est. (645)	(2,497)
Exchange differences on translation of foreign operations	558	636	613
Tax on items taken directly to equity	(319)	2	528
Net income / (expense) recognised directly in equity in the period	822	(7)	(1,356)
Profit for the financial period	1,398	1,527	3,488
Total recognised income and expense for the period	2,220	1,520	2,132
Attributable to:
Equity shareholders of the Company	2,242	1,520	2,132
Non-controlling interests	(22)	-	-
	2,220	1,520	2,132

Consolidated balance sheet

	Half year  ended	Half year  ended	Year  ended
	31 March 2011	31 March 2010	30 September 2010
	£(000)'s	£(000)'s	£(000)'s
Non-current assets
Goodwill	7,814	6,109	6,122
Other intangibles	184	264	184
Property, plant and equipment	8,812	4,852	4,609
Deferred tax asset	1,097	1,104	1,563
Investment in associates	-	-	639
	17,907	12,329	13,117
Current assets
Inventories	4,046	3,720	4,009
Trade and other receivables	8,704	7,239	6,908
Current tax assets	-	-	111
Cash and cash equivalents	3,098	8,766	9,593
	15,848	19,725	20,621
Total assets	33,755	32,054	33,738
Current liabilities
Trade and other payables	3,420	4,380	4,234
Current tax liabilities	41	246	-
Short term provisions	421	275	349
	3,882	4,901	4,583
Non-current liabilities
Retirement benefit obligation	6,927	6,497	8,068
Total liabilities	10,809	11,398	12,651
Net assets	22,946	20,656	21,087
Equity
Share capital	851	851	851
Share premium account	157	157	157
Capital redemption reserve	286	286	286
Translation reserve	2,468	2,252	2,089
Retained earnings	18,994	17,110	17,704
Total attributable to equity shareholders of the Company	22,756	20,656	21,087
Non-controlling interests	190	-	-
Total equity	22,946	20,656	21,087

These half-year condensed financial statements are unaudited and do not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006. The results for the 2010 year set out above are abridged.  Full accounts for that year reported under IFRS, on which the auditors of the Company made an unqualified report have been delivered to the Registrar of Companies.

The presentation of these Interim Financial Statements is consistent with the 2010 Financial Statements and its accounting policies, but where necessary comparative information has been reclassified or expanded from the 2010 Interim Financial Statements to take into account any presentational changes made in the 2010 Financial Statements or in these Interim Financial Statements.

Consolidated cash flow statement

	Half year ended	Half year ended	Year  ended
	31 March 2011	31 March 2010	30 September 2010
	£(000)'s	£(000)'s	£(000)'s
Cash flows from operating activities
Operating profit	2,029	2,206	4,871
Depreciation and amortisation	303	285	680
Additional income to pension scheme	(579)	(290)	(654)
Exchange adjustments	187	20	23
(Profit)/loss on disposal of property, plant and equipment	-	-	(2)
	1,940	2,221	4,918
(Increase)/decrease in inventories	424	263	(26)
(Increase)/decrease in trade and other receivables	(1,005)	(162)	169
Increase/(decrease) in trade and other payables	(1,190)	(280)	(306)
Increase/(decrease) in provisions	72	(83)	(9)
Cash generated from operations	241	1,959	4,746
Interest paid	-	-	-
Income tax paid	(470)	(359)	(1,262)
Net cash from operating activities	(229)	1,600	3,484
Cash flows from investing activities
Acquisition of associate undertaking	-	-	(667)
Proceeds from sale of associate undertaking	667	-	-
Acquisition of subsidiary undertakings	(1,955)	-	-
Acquisition of business and assets	(919)	-	-
Proceeds from sale of property, plant and equipment	8	1	75
Purchase of property, plant and equipment	(3,870)	(270)	(484)
Development costs capitalised	-	-	(38)
Interest received	37	46	103
Net cash used in investing activities	(6,032)	(223)	(1,011)
Cash flows from financing activities
Dividends paid	(361)	(344)	(524)
Net cash used in financing activities	(361)	(344)	(524)
Net increase/(decrease) in cash and cash equivalents	(6,622)	1,033	1,949
Cash and cash equivalents at beginning of period	9,593	7,476	7,476
Exchange adjustments on cash and cash equivalents	127	257	168
Cash and cash equivalents at end of period	3,098	8,766	9,593

For further information, please contact:

Dewhurst Plc	Tel: [phone]
Jared Sinclair
Seymour Pierce Limited	Tel: [phone]
Freddy Crossley / David Foreman (Corporate Finance)
Paul Jewell (Corporate Broking)

 

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