08 October 2003
October 8th 2003
YEAR-END TRADING STATEMENT
Ultraframe Plc, the leading specialist designer and manufacturer of conservatory
systems in Europe and North America, today issues a year end trading update,
preceding its full year results announcement on Tuesday 2 December 2003. As
announced at the interim results, it is the Company's intention to make this
update a regular addition to its existing financial calendar.
Overall, Group results for the full year have shown modest progress in 2003.
Turnover on continuing operations for the full year was down by 1.3% on a
constant currency basis, and in sterling terms by 4.3%, impacted as at the
interim stage by the depreciation in the US dollar exchange rate. However, as
expected, the Group has continued to make progress in terms of gross margin,
remains strongly cash generative and has finished the year with a further
significant reduction in gearing.
In the UK, full year sales on continuing operations were in line with last
year, reflecting a slight drop in second half sales. Gross margin improved both
in the second half and for the year as a whole.
Full year sales of mainstream roof products, representing 80% of UK turnover,
were ahead of last year. However, during the second half there was evidence of
a softening market in big ticket home improvement expenditure and sales were
marginally down on the comparable period.
In the smaller but growing budget segment of the conservatory market,
competitive pricing pressure has intensified. As previously announced,
Ultraframe's revolutionary new roofing system, Uzone, will be launched into this
market segment in October. Uzone is a complementary range extension aimed at
this younger, more price conscious demographic segment of the market.
In North America, core sunroom sales, representing 98% of turnover, were down by
1.2% on last year in dollar terms, against a slight increase in the first half.
As expected, dollar sales for the small commercial division were down on last
year, continuing the planned downscaling of this business. Overall dollar sales
were down 3.7% on last year, whilst reported turnover fell by 11.6% reflecting
an 8% depreciation of the US dollar over the year. Gross margin for the year
was well ahead of the prior year and the second half saw even stronger progress
in gross margin over the comparable period.
While the underlying demand for sunrooms remains positive, progress has been
delayed by the extensively reported adverse weather conditions. The unusually
heavy snowfall at the start of the year was followed by exceptional rainfall
from May to July, exacerbating the installation backlog highlighted at the
interim results. We are now making steady progress on servicing this backlog,
and the current order book is significantly ahead of the comparable period last
In the UK, we expect modest sales growth in 2004 given the slower economic
outlook. The board remains confident that our highly innovative product range,
sales initiatives and operational efficiencies will allow the Group to benefit
from the good long term growth prospects in this market.
In North America, expectations for an improving economic outlook in 2004, the
level of the current order book, together with the progress we have made in
strengthening our franchise network and continuing plans to expand our
Company-owned retail stores, give the board confidence for good growth in 2004.
Ultraframe Plc 01200 443311
David Moore (Chief Executive)
Alan Rothwell (Finance Director)
Brunswick 020 7404 5959
Visit our investor relations website at www.ir.ultraframe.com
This information is provided by RNS
The company news service from the London Stock Exchange