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WT Foods PLC (WES)

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Tuesday 19 June, 2001

WT Foods PLC

Final Results

WT Foods PLC
19 June 2001


                                 19 June 2001

                                 WT FOODS PLC

             Preliminary Results for the year ended 31 March 2001

WT Foods, the manufacturer and distributor of branded and own label speciality
and ethnic foods announces preliminary results for the year ended 31 March
2001.

On 11 June 2001 the Company announced that it had received an approach that
may or may not lead to an offer for the Company.

The approach is from the Executive Management team, comprising Keith Stott,
Rod Garland, John Brennan, Edward Shaw and G K Noon MBE backed by Bridgepoint
Capital Limited, advised by Rabobank International.

The Independent Directors have confirmed in principle that, if the offer
pursuant to this approach is made, they will recommend the price of 52p, which
includes any dividend that may be declared in respect of the year ended 31
March 2001. A further update will be provided to shareholders as soon as
possible.  At this stage therefore the independent Directors have decided not
to recommend a final dividend.

FINANCIAL HIGHLIGHTS



                                                       Year to 31    Year to 31
                                           Increase     March '01     March '00


-         Turnover  (£'000)                  + 31 %       £120.1m        £91.4m


-         Pre-tax profit (£'000) *             + 9%         £9.8m         £9.0m


-         Earnings per share *                 + 8%         4.51p         4.19p


*   Before goodwill amortisation



These results include contribution from recently acquired Rio/Funnybones and
MAP/Marlin House made during the year.



OPERATIONAL HIGHLIGHTS



o        Grocery Division - 13% sales increase. MAP and Marlin House Trading
         integrated into Group and new supermarket listings gained.

o        Bakery Division - Increased turnover of 10% underlying.

o        Chilled and Frozen division -  sales increased by 26%.




Commenting on prospects, the Company said:



'Against a background of continued pressure within the food-manufacturing
industry our performance in the last year has been strong.  During the year we
launched over 150  new products and strengthened our offerings.  In addition
we have won new exclusive agency business.  These gains helped to consolidate
our position as one of the UK's leading speciality food manufacturers. Current
trading is in line with our expectations, our recent acquisitions are making
steady progress and we are optimistic for the coming year.'

For further information, please contact :


Keith Stott, Chief Executive/Rod Garland, Finance Director
WT Foods                                                         01707 322322
Richard Oldworth
Buchanan Communications                                          0207 466 5000





Chairman's Statement



On the 11th June 2001 the Company announced that it had received an approach
that may or may not lead to an offer for the Company.



The approach is from the Management team, comprising Keith Stott, Rod Garland,
John Brennan, Edward Shaw and G K Noon MBE backed by Bridgepoint Capital
Limited, advised by Rabobank International.



The Independent Directors have confirmed in principle that, if the offer
pursuant to this approach is made, they will recommend the price of 52p, which
includes any dividend that may be declared in respect of the year ended 31st
March, 2001. A further update will be provided to shareholders as soon as
possible. At this stage therefore the Independent Directors have decided not
to recommend a final dividend.



I am pleased to report our results for the year ended 31 March 2001.  Pre-tax
profit of the Group before goodwill amortisation amounted to £9.8 million
(2000: £9.0 million) an increase of 9%, which included contributions from our
acquisitions, Rio/Funnybones and MAP/Marlin House, made during the year.



Pre-tax profit after charging goodwill amortisation is £7.1 million (2000: £
6.6 million) an increase over last year of 8%.  Adjusted earnings per share
before goodwill amortisation rose 8% to 4.51p (2000: 4.19p) while basic earnings
per share, calculated after goodwill amortisation rose 3% to 2.73p (2000:
2.64p).



Gearing at the year end rose to 70% (2000: 56%) with net indebtedness of £32.8
million (2000: £24.5 million) as a result of the debt funding of our two
acquisitions, Rio Funnybones and MAP/Marlin House during the year. The Group's
financial position remains strong, and interest cover remains comfortable at 5
times.



Current trading is in line with our expectations.  Our recent acquisitions are
making steady progress and we are optimistic for the coming year.



It is with great sadness that I report the death of Stanley Bard on 18th
March, 2001.  Stanley served as a non-executive Director since 1993 and his
influence and counsel will be greatly missed.





Philip Lovegrove                                            19 June 2001
Chairman






Chief Executive's Review



Against a background of continued pressure within the food-manufacturing
industry our performance in the last year has been strong. Our strategy to
build our business in high growth categories such as ethnic foods and chilled
recipe dishes has seen continued growth.  Turnover this year has increased by
31% to £120.1 million.  Excluding acquisitions underlying turnover increased
by 15% helped by particularly good performance from our Chilled and Frozen
division.



As a result of strategic decisions taken at Noon, Bart and Enco during the
first half of the year we had anticipated a short term impact on margins, with
recovery coming through in the second half of the year. Operating margins for
the full year have shown an increase over those at the interim stage, although
for the year as a whole operating margins were behind those of last year.



Product innovation continues to be an important factor in developing new
business and driving growth.  During the year we launched over one hundred and
fifty new products and strengthened our organic and low fat offerings,
principally through Bart and Noon.  In addition we have won new exclusive
agency business at Enco and Chadha. These gains helped to consolidate our
position as one of the UK's leading speciality food distributors.



All of our brands achieved good growth and it is particularly pleasing to note
that after its introduction only two years ago Silk Road now accounts for the
largest section of turnover within Chadha.  Our branded growth has been
achieved by consumer focused marketing activity and increasing market share.



Sales to the UK supermarket multiples increased by 19% over last year.  Whilst
our trade with the wholesale and cash and carry sector grew by 12%.  Exports,
although somewhat constrained by the strength of sterling, grew by 15%.  As
predicted at the interim stage, during the second half of the year we have
gained new customers.



We have continued with our programme of investing in our manufacturing
capacity with expenditure totalling £1.4 million during the year.  This
investment included further automation at Noon, additional refurbishment in
the Bakery division and the installation of a new high-speed sauce bottling
line at the Group packing facility at Corwen.  We expect there to be benefits
from increased capacity and improved efficiency.



Shortly after the year end we opened WT House, our new 140,000 sq ft purpose
built distribution centre at Welwyn Garden City.  Both our Grocery division
and our Food Service division now operate from this site.  The facility is '
multi temperature' allowing us to handle ambient chilled and frozen
distribution and will enable us to accommodate future growth and in the longer
term it is expected to improve efficiency.  Since the year end we have also
finalised a site for a third production facility for Noon and building is
expected to commence during the second half of this year. We anticipate that
we will require an initial investment of approximately £7 million which will
be funded by bank borrowings.



Our staff have worked extremely hard this year in the planning and
commissioning of WT House.  A large part of the success of our business is due
to their enthusiasm, commitment and hard work and their contributions are
appreciated. We extend our thanks to them.



We believe the environment for food manufacturers will remain competitive and
industry consolidation will continue.  WT has a good position in growing niche
markets.  We will continue to invest where necessary to offset margin pressure
where possible and to improve our facilities in order to increase capacity and
efficiency. The consumer's need for convenience, and interest in the exotic
are strong motivators which, together with the quality of our products and our
marketing activities should see our growth continue.



Grocery Division



The Grocery division made good progress with sales achieving an increase of
13% to £34.6 million.



Our principal brands Nurishment, Encona and Silk Road all showed good growth
driven by gains in distribution and effective marketing.  It was pleasing to
note that in our first year of sponsorship of the British Basketball League
the Nurishment sponsored Leicester Riders became British Champions.



Further exclusive agency business has been won with Brunswick Sardines of
Canada and Bahncke Fried Onions of Holland, emphasizing our position as a
leading UK speciality food supplier.



In October we were pleased to welcome MAP and Marlin House Trading into the
Grocery division following their acquisition. The companies import and have
manufactured under licence, Caribbean soft drinks and beers, principally under
the D&G and Dragon brand names for which they have European Rights. The
companies have integrated well and good growth has been achieved for their
product ranges with new listings gained with supermarkets.



Herbs & Spices Division



The market for herbs and spices continues to be aggressive which has resulted
in margin being put under pressure.  Overall Bart grew 4% to £8.0 million with
Bart branded products showing good overall volume growth.



The Bart brand continues to extend into other categories and additional
launches were made into the organic and low fat sectors.  Bart is now a
certified importer of organic spices, herbs, vegetables and coconut products.
We are also working with organic growing projects in Orissa (Eastern India) to
help increase availability of raw material.



Investment in a new high-speed packing line for sauces was made at the Group
packing facility in Corwen.  The Encona range of sauces are now packed on this
site.  During the year Bart was awarded British Retail Consortium high level
accreditation. This quality standard gives recognition to their competence as
a private label supplier.



Chilled and Frozen Division



Noon products had an excellent year increasing turnover by 25% to £57.1
million reinforcing its position as the UK's largest supplier of chilled
Indian recipe dishes. Margin during the first half suffered due to operational
constraints and the costs involved with gaining new business, but it rose
steadily through the second half as the benefits of investment in automation
came into effect.




Many new products were launched during the year including organic and low fat
alternatives.



Excellent growth from existing customers together with new business wins means
that the existing facilities are nearing capacity and planning for an
additional production facility is well underway.  A site has been secured and
construction of a new100,000 sq ft facility is expected to commence during
2001.



Food Service Division



Rio/Funnybones have been with the Group for eleven months and achieved a
turnover of £13.0million during the year under review.  The integration of Rio
/Funnybones has been very successful and they are now actively selling many
group products as well as being the main sales outlet for tortillas from La
Mexicana into the food service sector.



The year started slowly for Rio/Funnybones having experienced the effect of US
Dollar strength on its imports, a relatively poor summer generally in food
service and the problems caused by the fuel crisis last September.  These were
further exacerbated by the loss of one of its major customers.  Since our
interim results we have seen a gradual strengthening of the business with new
customer gains and the launch of over sixty new products.



Shortly after the year end Rio/Funnybones moved to our new distribution
facility. This will remove many of the constraints that the business suffered
at its Watford location caused by insufficient space and inefficient systems.
In addition a new, larger site has been secured in Mansfield in order to
replace the existing Northern depot.



Bakery Division



The Bakery division increased turnover by an underlying 10% over last year to
£7.4 million.



Following the completion of Eghoyan's re-organisation, sales of Naan bread are
continuing to rise and La Mexicana has continued to expand sales to its core
customers as well as winning new supermarket own label business for Tortillas
and Chapattis.



Sales of bakery products to food service customers are now being undertaken by
Rio/Funnybones, and during this current year a new Tortilla production line
will be introduced to cope with increased demand.







Keith Stott                                                     19 June 2001
Chief Executive




GROUP PROFIT AND LOSS ACCOUNT
Year ended 31 March 2001
                                                                  2001    2000
                                                        Notes    £'000   £'000
Turnover

    Continuing operations                                 1    105,559  91,399

    Acquisitions                                                14,572       -
                                                               120,131  91,399
Trading profit

    Continuing operations                                       11,529  10,558

    Acquisitions                                                   829       -
                                                                12,358  10,558


Goodwill amortisation

    Continuing operations                                      (2,345) (2,364)

    Acquisitions                                                 (365)       -


                                                               (2,710) (2,364)
Operating profit

    Continuing operations                                 2      9,184   8,194

    Acquisitions                                                   464       -
                                                                 9,648   8,194



Interest receivable and similar income                              19      54

Interest payable and similar charges                           (2,550) (1,629)


Profit on ordinary activities before taxation                    7,117   6,619

Taxation on profit on ordinary activities                      (2,949) (2,583)


Profit on ordinary activities after taxation                     4,168   4,036

Equity minority interests                                         (12)    (23)
Profit for the financial year attributable to
shareholders                                                     4,156   4,013
                                                                 
Dividends                                                      (1,141) (2,814)
                                                               


Retained surplus for the year                                    3,015   1,199

Earnings per share

basic                                                            2.73p   2.64p

adjusted                                                         4.51p   4.19p

diluted                                                          2.70p   2.56p
Dividend per share                                               0.75p   1.85p




STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Year ended 31 March 2001
                                                                  2001    2000
                                                                 £'000   £'000


Profit for the financial year                                    4,156   4,013

Prior year adjustments                                    3      (232)       -


Total recognised gains and losses recognised since               3,924   4,013

last annual report



GROUP BALANCE SHEET
Year ended 31 March 2001
                                                                  2001    2000
                                                      Notes      £'000   £'000
Fixed assets

Intangible assets                                               51,520  44,417

Tangible assets                                                 18,086  19,735


                                                                69,606  64,152


Current assets

Stocks                                                           9,243   6,623

Debtors                                                         20,812  12,846

Cash at bank and in hand                                         1,323     217
                                                                31,378  19,686


Creditors (amounts failing due within one year)



Bank and other borrowings                                     (16,627) (4,426)

Other borrowings - convertible                                 (2,563)       -

Other creditors                                               (19,864)(15,216)


Net current (liabilities)/assets                               (7,676)      44

Total assets less current liabilities                           61,930  64,196


Creditors (amounts falling due after more than one
year)



Bank and other borrowings
                                                              (12,531)(15,301)
Other borrowings - convertible
                                                               (2,437) (5,000)
Other creditors
                                                                 (250)       -


                                                              (15,218)(20,301)


Net assets                                                      46,712  43,885



Capital and reserves

Called up share capital                                         38,056  38,043

Share premium account                                           15,372  15,369

Reserves                                                         6,876   6,876

Profit & loss account                                   3     (13,593)(16,608)


Shareholders' funds (including non equity)                      46,711  43,680

Equity minority interests                                            1     205


Total capital employed                                          46,712  43,885






GROUP CASH FLOW STATEMENT
Year ended 31 March 2001


                                                                  2001    2000
                                                                 £'000   £'000


Net cash inflow from operating activities                       10,279  10,595


Returns on investments and servicing of finance



Interest received                                                   23      65

Interest paid                                                  (2,221) (1,241)

Hire purchase and finance lease interest                         (324)   (369)


                                                               (2,522) (1,545)


Tax paid                                                       (2,686) (2,499)


Capital expenditure and financial investment



Purchase of tangible fixed assets                              (2,931) (1,619)

Proceeds on disposal of tangible fixed assets                    3,442     201


                                                                   511 (1,418)
Acquisitions and disposals



Acquisitions of subsidiary undertakings                        (6,057)      68

Net bank balances acquired with subsidiary undertakings            243       -


                                                               (5,814)      68


Equity dividends paid                                          (2,814) (2,662)


Net cash (outflow)/inflow before financing                     (3,046)   2,539



Financing



Issue of share capital (net of expenses)                            16       4

Net bank loan advanced                                          17,592       -

Bank loan repaid                                              (12,774) (1,834)

Loan notes redeemed                                            (1,569)       -

Capital element of finance lease payments                      (1,766) (2,101)


Net cash inflow/(outflow) from financing                         1,499 (3,931)


Decrease in cash                                               (1,547) (1,392)







Notes





 1. Turnover derives from food manufacturing and distribution.


 2. Operating profit derives from food manufacturing and distribution.


 3. During the year ended 31 March 2001, the directors have adopted a new
    accounting policy whereby provision is made for holidays earned, but not
    taken, during the year, in order to better reflect changing Group
    employment terms.  This change in accounting policy has reduced this
    year's operating profit by £23,000 (2000 - £33,000) and Group reserves
    (net of tax) by £255,000 (2000 - £232,000).



 4. These accounts do not constitute statutory accounts.  Comparative figures
    for the year ended 31 March 2000 have been extracted from the statutory
    group accounts on which the auditors gave an unqualified report and which
    have been filed with the Registrar of Companies.



 5. The 2001 Report and Accounts will be posted to shareholders on 29
    June 2001.  Copies may be obtained after that date from the Secretary, WT
    Foods plc, WT House, Bessemer Road, Welwyn Garden City, Hertfordshire AL7   
    1HT.

 6. The Annual General Meeting of WT Foods plc will be held at the offices of
    the Chamber of Shipping, Carthusian Court, 12 Carthusian Street, London
    EC1M 6EB on 20 July 2001 at 11.00 a.m.