Final Results

NWF Group PLC 14 August 2000 NWF Group plc (Diversified Industrials) PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MAY 2000 * Record results, organic growth, investments and acquisitions * Turnover of £117m (£99m) * Record pre-tax profits of £3.1m (£3.0m pre-excep., £1.6m post-excep.) * Earnings per share of 27p (26.5p pre-exceptional, 9.8p post-exceptional) * Dividends per share of 10.2p (9.5p) * Interest cover 7.6 times * Further progress expected in each of the four businesses For further information contact: Graham Scott (Chief Executive) 01829 260 260 Alan Fulker (Finance Director) Binns & Co Public Relations 020 7786 9600 Brian Coleman-Smith / Amanda Sheehy NWF GROUP PLC (Diversified Industrials) PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MAY 2000 CHAIRMAN'S STATEMENT This year demonstrated the value of our spread of activities whereby the underperformance of one sector due to exceptional market circumstances was compensated for by improved results in the other three businesses. I am pleased to be able to report profits for 1999/2000 which surpassed our previous year's record pre-exceptional results. Sales grew 18% from £99m to £117m and pre-tax profits were £3.1m. Last year, exceptional charges arising from the closure of a business resulted in reported pre- tax profits of £1.6m. Trading results Three of our businesses, Agriculture, Distribution and Retail, had excellent years, ahead of last year, while Fuels had to face an extraordinary rate of rise in the prices of its products at a critical time of year and was unable to replicate the previous year's margins. Cash flows and funding The businesses generated £4.2m cash (£4.0m) from their operating activities and net cash outflow for the Group after all sources and uses of funds was £1.5m (£1.1m). Investment in the Group's future growth through capital expenditure of £1.7m and acquisition payments of £1.4m were the main applications of funds. The cost of funding these developments lowered our interest cover from 8.1 times last year to a still-comfortable 7.6 times this year. Gearing was 61% (60%) at the year end. No new shares were issued in the year. Acquisitions and investments I have already reported in my Interim Statement that we have increased the profit base of the Group by acquiring the businesses of Malpas Oils, a small fuel distributor, and of Wheatcroft Garden Centre, a major garden centre. In addition, I have reported the decision to build a new 93,000 sq ft warehouse at Wardle for our Distribution activity and we have invested further in capacity and refurbishment projects in each one of the four businesses. Dividend At the Annual General Meeting, we shall continue our progressive dividend policy by proposing a final dividend of 7.1p (6.6p) per share, bringing the total for the year to 10.2p (9.5p) per share. This level of dividend would be covered 2.7 times (2.8 times) by post-tax profit. Subject to shareholder approval, the final dividend will be paid on 1 November 2000 to shareholders on the register at 25 August 2000. Outlook for the current year We expect further progress again in each of our businesses. Agriculture will continue to seek market share gains in a dairy farming industry which itself will be hoping for a recovery from the current depression. Distribution has the opportunity of filling the new warehouse although this project is expected to be broadly profit-neutral in the year. Fuels will aim for increased volumes and profitability compared to this year's unusually low margins. Retail will benefit from a full year's trading at two large garden centres alongside the six Country Stores. The financing of the new warehouse construction, coupled with the seasonal lows of garden centres now having a larger influence on the Group, could lead to Interim results being below last year without this having any adverse implications for the full year. Our stakeholders Our peak employee numbers occur in the busy spring months for garden centres, this year reaching a maximum of 578 with the arrival of Wheatcroft Garden Centre in the Group. The average for the year was just under 500. My thanks go to all of them for another year's excellent progress together with my good wishes for the new year. I would like to thank all customers who did business with any part of the Group during the year and to hope that we may continue to serve them well. Finally, welcome to investors who became shareholders or who increased their holdings in 1999/2000. Your Board is committed to continue driving up the earnings of the Group over the years to provide the basis for an attractive and reliable income stream. J Roy Willis Chairman NWF GROUP PLC (Diversified Industrials) PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MAY 2000 CONSOLIDATED PROFIT AND LOSS ACCOUNT 2000 1999 re-stated £'000 £'000 £'000 £'000 TURNOVER 117,128 98,547 Cost of sales (106,639) (88,796) --------- ------ GROSS PROFIT 10,489 9,751 Trading costs (6,933) (6,298) --------- ------ OPERATING PROFIT 3,556 3,453 Exceptional item Provision for loss on business to be closed - (414) Write off of attributable goodwill - (987) ----- ----- - (1,401) --------- ------- 3,556 2,052 Net interest payable (468) (426) --------- ------ PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 3,088 1,626 Taxation (952) (853) --------- ------ PROFIT AFTER TAXATION 2,136 773 Equity dividends (806) (750) --------- ------ RETAINED PROFIT TRANSFERRED TO RESERVES 1,330 23 ====== ====== Earnings per share Basic (including exceptional item) 27.0p 9.8p Diluted (including exceptional item) 27.0p 9.8p Adjusted (excluding exceptional item) 27.0p 26.5p There were no recognised gains and losses other than the profit for both years. The figures shown above for 1999 have been re-stated by re- allocating £814,000 of expenses from Cost of sales to Trading costs with no effect on Operating profit. NWF GROUP PLC (Diversified Industrials) PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MAY 2000 CONSOLIDATED BALANCE SHEET 2000 1999 --------------- ----------------- £'000 £'000 £'000 £'000 FIXED ASSETS Intangible assets 152 - Tangible assets 14,522 14,562 ------- ------- 14,674 14,562 CURRENT ASSETS Stocks 4,736 3,757 Debtors 15,207 13,184 Cash and bank balances 18 23 ------- ------- 19,961 16,964 CREDITORS - Amounts falling due within one year (19,387) (16,500) ------- ------- NET CURRENT ASSETS 574 464 ------- ------- TOTAL ASSETS LESS CURRENT LIABILITIES 15,248 15,026 CREDITORS - Amounts falling due after more than one year (2,684) (3,800) PROVISIONS FOR LIABILITIES AND CHARGES Pension provision (151) (168) Deferred taxation (564) (539) ------- ------- (715) (707) ------- ------- NET ASSETS 11,849 10,519 ====== ====== CAPITAL AND RESERVES EQUITY SHARE CAPITAL 1,975 1,975 RESERVES Share premium 520 520 Revaluation reserve 1,677 1,703 Capital reserve 213 213 Profit and loss account 7,464 6,108 ------- ------- 9,874 8,544 ------- ------- TOTAL EQUITY SHAREHOLDERS' FUNDS 11,849 10,519 ===== ===== NWF GROUP PLC (Diversified Industrials) PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MAY 2000 CONSOLIDATED CASH FLOW STATEMENT 2000 1999 ---------------- ----------------- £'000 £'000 £'000 £'000 NET CASH INFLOW FROM OPERATING ACTIVITIES 4,170 4,002 RETURNS ON INVESTMENTS AND SERVICING OF FINANCE Interest paid (457) (411) TAXATION Corporation tax paid (1,153) (800) CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT Purchase of tangible fixed assets (1,651) (2,288) Sale of tangible fixed assets 307 208 Disposal of trade investment - 2 -------- -------- NET CASH OUTFLOW FROM CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT (1,344) (2,078) ACQUISITIONS AND DISPOSALS Acquisition of businesses (498) - Deferred payment for businesses acquired in prior year (950) (188) -------- ------- NET CASH OUTFLOW FOR ACQUISITIONS AND DISPOSALS (1,448) (188) EQUITY DIVIDENDS PAID (766) (664) ------- -------- NET CASH OUTFLOW BEFORE FINANCING (998) (139) FINANCING Medium term loan repayment (500) (1,000) ------- -------- DECREASE IN CASH IN THE YEAR (1,498) (1,139) ===== ===== NWF GROUP PLC (Diversified Industrials) PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MAY 2000 NOTES TAXATION 2000 1999 ------- ------- £'000 £'000 UK Corporation tax at 30% (1999 - 31%) 949 900 Deferred tax 23 (11) ------- ------ 972 889 Prior year - current tax (22) (38) - deferred tax 2 2 ------ ------- 952 853 ==== ==== SEGMENTAL INFORMATION Business Turnover Operating Net operating profit assets 2000 1999 2000 1999 2000 1999 --------------------------------------------------------- £'000 £'000 £'000 £'000 £'000 £'000 Agriculture 29,767 26,735 1,100 851 7,044 5,769 Distribution 8,968 10,841 1,342 1,228 6,765 7,593 Fuels 66,843 52,085 421 874 3,055 3,106 Retail 11,550 8,886 693 500 5,291 4,647 --------------------------------------------------------- 117,128 98,547 3,556 3,453 22,155 21,115 --------------------------------------------------------- EARNINGS PER SHARE The calculation of basic earnings per share is based on profit after tax for the financial year divided by 7,900,941 ordinary shares being the number of ordinary shares in issue (1999 - 7,900,941). RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING ACTIVITIES 2000 1999 ---------------- --------------- £'000 £'000 £'000 £'000 Operating profit 3,556 3,453 Goodwill amortisation 5 - Depreciation charge 1,661 1,621 Profit on sale of tangible fixed assets (141) (157) Increase in stocks (760) (1,122) Increase in debtors (2,023) (789) Increase in creditors 1,889 1,011 Decrease in pension provision (17) (15) -------- -------- (911) (915) ------- ------- Net cash inflow from operating activities 4,170 4,002 ==== ==== ANALYSIS OF NET DEBT At 31 Other At 31 May Cash non-cash May 1999 flow changes 2000 ------ -------- ------ ------ £'000 £'000 £'000 £'000 Cash and bank balances 23 (5) - 18 Bank overdraft (3,298) (1,493) - (4,791) -------- -------- -------- -------- (3,275) (1,498) - (4,773) Debt due within one year (500) 500 (466) (466) Debt due after one year (2,500) - 466 (2,034) -------- -------- -------- -------- Total (6,275) (998) - (7,273) ===== ===== ===== ===== Annual Report to be published 4 September 2000 Annual General Meeting 28 September 2000 Dividend: - to be paid 1 November 2000 - record date for shareholders 25 August 2000 Annual Report: This preliminary announcement does not form the Group's statutory accounts. The figures shown in this release have been extracted from the Group's full financial statements which, for the year ended 31 May 1999, have been delivered, and for the year ended 31 May 2000 will be delivered to the Registrar of Companies. Both carry an unqualified audit report. The financial statements for the year ended 31 May 2000 have been prepared in accordance with applicable accounting standards, using the same accounting policies as set out in the Annual Report for the year ended 31 May 1999, other than the adoption of FRS 15 'Tangible Fixed Assets'. After 4 September, copies of the Annual Report can be obtained from the Company's registered office at Wardle, Nantwich, Cheshire, CW5 6BP or viewed on the Company's Web site: http://www.nwf.co.uk

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