Final Results

Reece PLC 28 June 2000 CHAIRMAN'S STATEMENT RESULTS 1999 was another difficult year for Reece PLC. During the year the loss on ordinary activities before taxation and exceptional costs was £1,197,000 compared with a loss of £1,408,000 in 1998. The exceptional costs represent a high level of one-off costs, covering certain irrecoverable lease costs of a former APP property now not occupied by the Group, an accelerated write-down of stock at Service (Engineers) following the introduction of servo driven machines and the writing off of surplus manufacturing equipment at APP. In addition the sale of the Cycles division at below book value has been reflected in these accounts. In all these exceptional costs amount to £504,000. DISPOSAL On 5 May 2000, Service (Engineers) PLC, our trading subsidiary, sold the business and principal assets of the Cycles division to a company owned by MJ Norris, our former Managing Director, and his wife. These assets were sold for approximately £860,000 plus an additional amount in respect of non-current trade debtors. If the value of the net assets disposed of less £200,000 differs from £860,000 in the completion accounts to be agreed between the parties, then the consideration will be adjusted by an amount equal to the difference. Part of the disposal proceeds have been used to repay the term loan in full. The remaining proceeds received to date have been applied to the working capital requirements of the Group. DIVIDEND The directors do not recommend the payment of a dividend. CHANGE OF DIRECTOR On 5 August 1999, Steve Smith was appointed a non-executive Director of Reece PLC. Steve is an employee of Britannia Group PLC which remains our largest shareholder although it was taken over by YJL plc early in 2000. Subsequently, Steve Smith resigned from the Board on 23 June 2000 and on the same date Peter Gyllenhammar, deputy chairman of YJL plc, was appointed a non-executive Director. MJ Norris resigned on 5 May 2000. REVIEW OF OPERATIONS APP £'000 1999 1998 Sales 2,788 3,104 Operating Profit before 63 220 exceptional costs Sales revenues fell in 1999 despite a strong performance in export markets. Performance in the UK suffered from intense competitive pressure. Export sales continued to grow rapidly which partly compensated for lower UK sales. However, throughout the year the strength of sterling served to reduce the turnover and profit margins on French sales which were invoiced in French Francs. Cycles £'000 1999 1998 Sales 5,274 5,973 Operating (Loss)/Profit before (403) 87 exceptional costs Efforts to develop higher margin accessory business, whilst maintaining sales of Probike cycles at reasonable margins, were overshadowed by the extremely disappointing results from the premier brand Univega cycles. The level of sales of Univega and the subsequent profit margin were less than half those seen in 1998. Competition was fierce. Having produced inadequate and deteriorating results with little prospect of significant recovery as part of the Group, the Board decided to sell the business and assets. After marketing the business, a company owned by the former Managing Director, MJ Norris and his wife, made a competitive offer and bought the business and assets. Service (Engineers) £'000 1999 1998 Sales 1,881 2,676 Operating (Loss) before (527) (185) exceptional costs 1999 saw a further dramatic reduction in the demand for Service (Engineers) range of ceramic tableware manufacturing and decorating equipment both in the UK and overseas. World-wide there is over-capacity in the production of domestic tableware for the retail market which has restricted capital expenditure on new plant and equipment. The slow pace of recovery in Europe and weak European currencies depressed sales in the region During the year the workforce was reduced by one-third to cut costs. In addition, a re-organisation has improved our ability to deliver customer specific plant and equipment required by the European and American tableware and glassware manufacturers who are now serving many specialist markets. Rapid market change has necessitated the development of computer controlled servo driven forming and decorating machines for the ceramic and glassware industries. These machines meet our customers' demands for maximum flexibility and minimum non-productive times by incorporating rapid shape change-over. The new range of forming and decorating equipment will be available during 2000. FUTURE APP has had a profitable start to the current year, during which overseas sales have benefited from much reduced currency losses compared with the same period last year. Prices remain under intense pressure and APP will look for further cost reductions in order to bring the operational cost base to a level no greater than that of our principal competitors. During the first five months of 2000, Service (Engineers) has seen a marked improvement in its order book and has returned to profit after experiencing substantial losses in the same period last year. The new range of servo driven machines is making a positive impact, whilst the prospect of certain large-scale contracts looks brighter than it has for some time. Prior to disposal on the 5 May 2000, the Cycles division continued to trade at a substantial loss. We are searching for a significant acquisition in order to create a brighter future for shareholders. Should the discussions that are taking place at present reach a satisfactory conclusion, the Board hope to put forward proposals that would meet shareholders' approval. Peter Knapton Chairman 27 June 2000 CONSOLIDATED PROFIT AND LOSS ACCOUNT For the year ended 31 December 1999 1999 1998 Notes £'000 £'000 £'000 £'000 Turnover - continuing operations 9,943 11,753 - discontinued operations - 2,565 ------ ------ 9,943 14,318 ------ ------- Cost of sales (7,802) (10,579) Exceptional cost of sales (230) - (1) (8,032) (10,579) ------ ------- Gross profit 1,911 3,739 Selling and distribution (1,389) (2,141) expenses Administrative expenses (1,884) (2,312) Exceptional costs (1) (274) (232) ------ ------ (2,158) (2,544) ------ ------- Total expenses (3,547) (4,685) ------ ------- Operating loss - continuing operations (1,636) (411) - discontinued operations - (535) ------ ------ (1,636) (946) Loss on sale of discontinued - (600) operations ------ ------- (1,636) (1,546) Net interest payable (65) (94) ------ ------- Loss on ordinary activities (1,701) (1,640) before taxation Taxation (2) - - ------ ------- Deficit for the financial year (1,701) (1,640) ------ ------- Basic loss per Ordinary 1p (3) (0.96p) (0.93p) share Diluted loss per Ordinary 1p (3) (0.96p) (0.93p) share Adjusted (loss) earnings per (3) Ordinary 1p share (0.68p) (0.15p) ______ _______ CONSOLIDATED AND PARENT COMPANY BALANCE SHEETS As at 31 December 1999 31 December 31 December 1999 1998 Group Company Group Company £'000 £'000 £'000 £'000 Fixed Assets Tangible assets 996 - 1,295 - Investments - 650 - 3,204 ----- ------ ------ ------ 996 650 1,295 3,204 ----- ------ ------ ------ Current Assets Stocks 2,494 - 3,061 - Debtors 1,910 2,407 2,667 4,141 Cash at bank and in hand 101 - 224 - ----- ------ ------ ------ 4,505 2,407 5,952 4,141 Creditors - Amounts falling (2,844) (600) (2,833) (608) due within one year ----- ------ ------ ------ Net current assets 1,661 1,807 3,119 3,533 ----- ------ ------ ------ Total assets less current 2,657 2,457 4,414 6,737 liabilities Creditors - Amounts falling due after more than one year (119) - (175) - ----- ------ ------ ------ Net assets 2,538 2,457 4,239 6,737 ----- ------ ------ ------ Capital and reserves - Called up share capital 6,921 6,921 6,921 6,921 - Share premium account 2,547 2,547 2,547 2,547 - Profit and loss account (6,930) (7,011) (5,229) (2,731) Equity shareholders' funds (2,613) (2,694) (912) 1,586 Non-equity shareholders' 5,151 5,151 5,151 5,151 funds ------ ------ ------ ------ Total shareholders' funds 2,538 2,457 4,239 6,737 ------ ------ ------ ------ CONSOLIDATED CASH FLOW STATEMENT For the year ended 31 December 1999 1999 1998 £'000 £'000 £'000 £'000 Net cash inflow from operating 101 1,318 activities Returns on investments and servicing of finance Interest paid on bank loan and overdraft (34) (84) Interest element of hire purchase and (31) (23) finance lease payments - Other income 13 ----- ----- (65) (94) Taxation UK Corporation tax paid - - Capital expenditure and financial investment Payments to acquire tangible fixed (82) (202) assets Proceeds from sales of tangible fixed 14 69 assets ----- ----- (68) (133) Acquisitions and disposals Proceeds from disposal of the Fastener - 200 division ------ ------ Cash (outflow) inflow before financing (32) 1,291 Financing Capital element of hire purchase and finance lease rental (152) (230) payments Bank loan repayments (167) (167) ----- ----- (319) (397) ------ ------ (Decrease)/ Increase in cash (351) 894 ------ ------ 1 EXCEPTIONAL COSTS The exceptional costs incurred in the year, related to: 1999 1998 £'000 £'000 Stock write-off 230 - Fixed Assets write down 167 - Trade Debtors write-off 50 - Ceramic equipment division restructuring costs - 67 Onerous lease costs 57 165 ------ ------ 504 232 ------ ------ 2 TAXATION No tax charge arises in the year due to trading losses (1998 - £nil). There are tax losses amounting to approximately £800,000 (1998 - £800,000) which are available for offset against future taxable profits arising in certain businesses. 3 LOSS PER ORDINARY SHARE (a) The basic loss per Ordinary 1p share is calculated on the deficit for the year of £1,701,000 (1998 - £1,640,000) and on 177,054,416 (1998 - 177,054,416) Ordinary 1p shares being the weighted average number of Ordinary 1p shares in issue during the year. The diluted loss per share is the same as the basic loss per share for both years as the share options outstanding at the end of both years are not dilutive. (c) The loss per Ordinary 1p share figure has also been presented to eliminate the effects of discontinued operations and exceptional items. This presentation, calculated on the basis of the weighted average number of Ordinary 1p shares in issue, shows the loss per Ordinary 1p share that is attributable to the normal trading activities of the Group. The reconciliation between the two figures is as follows: 1999 1998 1999 1998 £'000 £'000 P P Deficit for the basic loss per Ordinary 1p share calculation (l,701) (1,640) (0.96) (0.93) Operating loss from discontinued operations - 535 - 0.30 Loss on sale of discontinued operations - 600 - 0.34 Exceptional costs 504 232 0.28 0.14 ------- ------ ------ ------ Adjusted loss per Ordinary 1p share (1,197) (273) (0.68) (0.15) ------- ------ ------ ------ PRELIMINARY STATEMENT This preliminary statement is not the Company's statutory accounts. The statutory accounts for the year ended 31 December 1998 have been delivered to the Registrar of Companies and have received an audit report which was unqualified and did not contain statements under s237 (2) or (3) of the Companies Act 1985. The statutory accounts for the year ended 31 December 1999 have not yet been approved, audited or filed.

Companies

Record (REC)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today