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Ultraframe PLC (UTF)

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Tuesday 02 December, 2003

Ultraframe PLC

Preliminary Results

Ultraframe PLC
02 December 2003



Tuesday December 2 2003

                         ULTRAFRAME PLC ('Ultraframe')
          PRELIMINARY RESULTS FOR THE 52 WEEKS ENDED 26 SEPTEMBER 2003


Ultraframe Plc, the leading specialist designer of conservatory systems in
Europe and North America, today announces preliminary results for the 52 weeks
ended 26 September 2003.


Group highlights


  •  Modest decline in turnover on continuing operations to £139.1m (2002:
     £145.2m) in challenging conditions
  •  Good improvement in gross and net margins reflecting tighter overhead
     control and operational improvements
  •  2.4% increase in PBT (pre-goodwill amortisation & exceptionals) to
     £32.0m (2002: £31.3m)
  •  Increased focus on product innovation and market development
  •  Highly cash generative, further significant reduction in net debt to
     £8.3m (2002: £16.3m)
  •  Proposed 7.8% increase in full year dividend to 11.1p


                   2003     2002   % change                  % change at 
                                                          constant FX rates **
Results (before                                           
goodwill
amortisation and
exceptionals)*

Turnover on
continuing
operations       £139.1m  £145.2m      (4.3)                     (1.3)

Operating profit
on continuing
operations        £33.4m   £33.5m      (0.4)                      1.3

Profit before     
tax               £32.0m   £31.3m       2.4

Earnings per      
share              22.9p    22.4p       2.1

Statutory
results

Operating profit  £29.8m   £28.8m       3.6                       4.6

Profit before     
tax               £28.1m   £27.1m       3.6

Earnings per       
share              20.0p    19.4p       3.0

* Management use results that exclude goodwill amortisation and exceptional
items as the primary measure to provide a better comparison of underlying
business performance.

** Given the 8% depreciation in the dollar exchange rate during the year, the
use of constant rates of exchange more clearly portrays the underlying trend of
the business.

Chief executive David Moore commented:

'We have remained focused this year on investing in product innovation, the
extension of distribution channels and improving operational efficiency. These
initiatives have resulted in good growth in margins and will enable us to
further exploit the long term growth prospects in the business. In the short
term, the UK will remain challenging. Our strategic plans for the development of
our North American business are on track and we expect growth in 2004 in this
important market.'


Chairman Rod Sellers added:

'I am pleased to report continued progress in our businesses, despite the
challenges we have encountered during the year. While the board does not
anticipate the growth in the US business to fully compensate for an expected
decline in sales in the UK market this year, it continues to be confident in the
attractive long-term fundamentals of the business, which is reflected in our
decision to increase the dividend.'


Enquiries

Ultraframe: David Moore / Alan Rothwell     Today 020 7404 5959
                                            Thereafter 01200 443311
Brunswick: Gill Ackers / Sarah Tovey        020 7404 5959

For further information please access our investor website at
www.ir.ultraframe.com.


CHAIRMAN'S STATEMENT


I am pleased to report continued progress in our businesses, despite the
challenges we have encountered during the year. We continued the planned revenue
and capital investment programme and maintained our market leadership position.
The operating results were and continue to be impacted by a softening demand in
the UK in the second half. This reflects a slowdown on spending for big ticket
home improvement items generally and more specifically in the conservatory
market. In North America, although sales were affected by the exceptionally bad
weather, underlying demand for core sunrooms remained strong.

Group results

Overall Group results have shown modest progress in 2003. On a constant currency
basis, turnover on continuing operations for the full year was down by 1.3%,
with reported turnover on continuing operations down by 4.3% to £139.1m (2002:
£145.2m). This reflects an 8% decline in the average exchange rate of the US
dollar against sterling in the year under review. Gross margin from continuing
operations increased from 48.6% to 50.7% and operating margin before goodwill
amortisation and exceptional items rose from 23.1% to 24.0% on the same basis.
Operating profit on continuing operations before goodwill amortisation and
exceptional items was also impacted by the adverse exchange rate movement,
delivering 1.3% growth in constant currency terms, and 0.4% decline overall at
£33.4m (2002: £33.5m). Having benefited from a reduction in net interest payable
during the period, profit before tax, goodwill amortisation and exceptional
items rose by 2.4% to £32.0m and reported pre-tax profit was up by 3.6% to
£28.1m (2002: £27.1m). Earnings per share before goodwill amortisation and
exceptional items increased by 2.1% to 22.9p, with reported EPS ahead 3.0% to
20.0p.

The Group continues to be strongly cash generative and gearing has reduced
significantly to 10.2% (2002: 21.5%). Net debt has fallen to £8.3m (2002:
£16.3m).

Dividend

The board proposes a final dividend of 7.86p per share (2002: 7.30p) to be paid
on 29 January 2004 to shareholders on the register at 5 January 2004. This,
together with the interim dividend of 3.24p paid on 23 June 2003, makes a total
dividend for the year of 11.10p per share (2002: 10.30p), an increase of 7.8%.
This is in line with our stated policy to pay a progressive dividend, that is
around twice covered by earnings before goodwill amortisation and exceptional
items.

Board and employees

Since the financial year end, the board has appointed Richard Scott, who brings
30 years of experience of working within the retail sector, most recently as a
non-executive director at Madisons Coffee plc. We welcome him to the board and
look forward to his contribution to the Group.

I would like to personally thank our employees for their dedication and
commitment to the Group. Their continued focus on quality, innovation and
customer service enables us to maintain our market leadership in each of our
businesses.

AGM

We are holding our Annual General Meeting at our Clitheroe Headquarters on 23
January 2004. As always, I would encourage shareholders to join us, as the
meeting offers the opportunity to meet with directors and senior management, and
to tour the factory and offices.


Current trading and outlook

In the UK, turnover on continuing operations in the first two months of the new
financial year is 7% below the same period last year.  In North America, dollar
sales in our core sunroom business are 2% down on the comparable period.

While the long term business dynamics and drivers of the business in both our
key markets remain strong, the UK market remains challenging. However, our
highly innovative product range, sales initiatives and operational efficiencies
will help mitigate the impact of weaker market conditions on UK sales this year
and position 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 our plans to expand our
Company-owned retail stores, give the board confidence for growth in 2004. While
the board does not anticipate growth in the US business to compensate fully for
an expected decline in sales in the UK market this year, it continues to be
confident in the attractive long-term fundamentals of the business, which is
reflected in its decision to increase the dividend.


OPERATING & FINANCIAL REVIEW

The year under review was impacted by an uncertain macro economic background.
However, both the UK and North America have good long term growth potential and
we have continued to invest in growth and operational efficiencies. Our North
American business now represents 35% of Group turnover and 19% of Group
operating profit before goodwill amortisation and exceptional items, and looking
ahead, we expect relatively stronger growth rates in this important market.

UK division

Financial highlights (continuing operations)

£m                                  2003           2002               % change

Turnover                            90.7           90.5                    0.2
Operating profit                    28.8           27.9                    3.5

Operating margin                    31.8%          30.8%

A first half sales advance of 3.6% was offset by a decline of 2.5% in the
seasonally important second half. Within this overall trading result, full year
sales of our mainstream roof products, representing 80% of UK turnover, were
ahead of last year. However, during the second half the widely reported slowdown
in big ticket home improvement expenditure impacted sales as prospective
customers deferred their purchase decision. These mainstream products are
focused on the 'baby boomer' consumer demographic, who are looking to make an
aspirational lifestyle conservatory purchase.

In the smaller but growing budget segment of the conservatory market, sales were
below those in the comparable period last year as the competitive environment
intensified with new market entrants and increased customer churn. This market
serves the younger, more price conscious, family customers who are driven by
space needs. We continue to believe this market segment offers us real
opportunities and we are developing innovative products and new channels to
market. In October 2003 we launched UzoneTM, our revolutionary new roofing
system aimed at this younger demographic. Feedback from initial summer trials
has been positive and we anticipate a modest but progressive sales contribution
in the current financial year. We have also entered into new relationships with
builders merchants, providing the Group with greater access to general builders
and smaller installers. We are confident that these initiatives will allow us to
build a significant presence in this growing market segment in the medium term.

Our excellent track record of growing margins continued in 2003, with gross
margin on continuing operations up from 53.3% to 54.1%, having benefited from
the prior year's investment and more favourable purchasing arrangements.
Operating margin increased from 30.8% to 31.8% on the same basis. We will
continue to exploit opportunities for further margin growth in the future, but
we expect the rate of margin growth going forward to moderate, reflecting
planned product range extensions, product mix changes and marketing initiatives.

Ultraframe in the UK operates in a market where just over 200,000 conservatories
are installed annually. There are 12m addressable properties in the UK, and
around 20% of these currently have a conservatory. Our strategy remains to
invest in product innovation, product range extensions and broadening
distribution channels to exploit the long term growth prospects in the UK
conservatory market. We have an exciting product pipeline, and plan to
accelerate the speed of innovation further to ensure we maintain our market
leadership position.

North American division

Financial highlights (continuing operations)

£m                                2003    2002          %   % change at
                                                   change   constant FX rates*
Turnover (core sunrooms)          47.5    52.4       (9.3)    (1.2)
Turnover (total)                  48.4    54.7      (11.6)    (3.7)
Operating profit before goodwill
amortisation                       6.5     7.7      (15.6)    (8.2)

Operating margin                  13.4%   14.0%

* % change at constant FX rates removes the distorting impact of currency
movements and more clearly shows the underlying performance of the business. The
FX rate used on this basis is the annual average rate for the prior year.

In North America, core sunroom sales of $76.1m, representing 98% of turnover,
were down by 1.2% on the prior year, with a first half advance of 2.1% offset by
a decrease of 3.6% in the second half. As planned, sales for the small
commercial division of $1.3m were below last year (2002: $3.3m), continuing the
downscaling of this business to focus on smaller light commercial projects.
Overall dollar sales of $77.4m decreased by 3.7% on the comparable period. The
8% depreciation in the dollar exchange rate has materially impacted the sterling
reported results of our North American business.

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 making steady progress on servicing this backlog as the
weather has returned to its more normal seasonal pattern, and the current order
book is ahead of the comparable period last year.

Gross margin grew strongly from 40.9% to 44.1%, reflecting improved operational
efficiency. We expect gross margin to rise further as we invest in capital plant
to increase automation and further improve efficiency. Operating profit before
goodwill amortisation amounted to $10.3m (2002: $11.3m). The resulting operating
margin for the year of 13.4% (2002: 14.0%) reflects the increase in planned
revenue investment to support future business scalability. As a result,
overheads increased to $23.8m for the year under review (2002: $21.6m including
non-recurring integration and restructuring costs of $1.1m). This continuing
investment in infrastructure will moderate growth in operating margin in 2004,
but, as with gross margin, we expect operating margin to rise over the medium
term.

Sunrooms are currently installed in less than 5% of the addressable 56m homes in
the US. Installations are running at some 100,000 per annum, offering an
opportunity for Four Seasons to grow the business significantly. We continue to
increase the levels of support we provide to our franchisees, and to improve the
quality of the franchisee base and the products that they market. Since
acquiring Four Seasons in July 2001, we have added 62 quality franchisees with
strong growth potential, and eliminated 124 that did not match our stringent
criteria, in line with our strategic plan. We now have 314 in our network across
North America. The new Californian distribution centre is supporting our
geographic expansion. The Company's new retail hub in Arizona has proved highly
successful delivering both new, quality partners and sales uplift. We intend to
open another 3 such outlets in other locations in 2004 to pursue further the
opportunities for growth via geographic expansion. During the year, we
introduced an Ultraframe design roof system from our Canadian operation to a
high volume Four Seasons sunroom model in the US, resulting in a significant
decrease in installation time. Our product enhancement initiatives also included
a reduction in the number of sunroom components, fasteners and overall system
complexity.

Exceptional items

As reported last year, Ultraspan Limited, the commercial glazed enclosure
business, was sold for a cash consideration of £0.2m in November 2002. The loss
on disposal of £0.6m has been charged as a non-operating exceptional item in the
profit and loss account for 2003.

Goodwill

The goodwill charge decreased from £4.4m to £3.4m, reflecting a non-recurring
goodwill impairment of £0.7m in 2002 relating to the discontinued Ultraspan
business. The goodwill charge for the period under review, relating to our Four
Seasons business in the US, was positively impacted by £0.3m as a result of
dollar depreciation.

Interest

Net interest payable amounted to £1.2m during the period under review, compared
with £2.0m in the prior year. Within this, interest receivable rose from £0.5m
to £0.8m, as a result of higher average cash balances. Interest payable fell by
£0.5m to £2.0m reflecting lower debt levels in line with the planned repayment
profile. Net interest payable for the year under review was covered 27.5 times
(2002: 16.9 times) by operating profit on continuing operations before goodwill
amortisation and exceptional items.

Taxation

The tax charge of £8.7m represents an effective tax rate of 30.3% on pre-tax
profit excluding exceptional items, compared with 30.2% in the prior year. The
Group expects the effective tax rate in the foreseeable future to be in the
range of 31.0% to 32.5% on the same basis.

Cash flow

Net debt at the financial year end was £8.3m representing gearing of 10.2% down
from 21.5% at September 2002. Net debt was reduced by £8.0m during the year.
This reflects a positive cash flow of £6.4m, together with a foreign exchange
reduction of £1.6m in dollar denominated North American net debt.

Cash flow from operating activities amounted to £30.6m compared with £39.6m in
2002. The prior year cash inflow on working capital was enhanced by the timing
of payments to trade creditors, which in 2002 fell just outside the year end,
and the provision for profit related bonuses accrued for that year. In 2003
working capital outflows include £3.4m attributable to a temporary increase in
trade debtor levels in North America against the background of offering more
favourable credit terms in light of the abnormal weather, and to higher US stock
levels including first time stock holdings in the new Californian warehouse and
retail store in Arizona.

Cash outflow on capital expenditure rose by £1.5m to £5.1m, comprising £3.2m in
the UK and £1.9m in North America. The overall level of capital expenditure
compares with a depreciation charge for the year of £3.3m (2002: £4.1m including
non-recurring accelerated depreciation of £0.7m). We plan a capital investment
spend of some £9m in 2003/4 to support the development and expansion of our UK
and North American businesses. Budgeted capital expenditure in the UK is £5m and
£4m in North America.

Cash flow in the prior year benefited from a non-recurring cash receipt of
£3.0m, following agreement of the completion accounts relating to the
acquisition of Four Seasons, as previously reported.

Cash inflow before financing and management of liquid resources amounted to
£6.4m for the year under review, after the payment of interest, taxation and
dividends. Cash flow generation is a characteristic of the business and we
expect the Group to be strongly cash generative for the foreseeable future.

Accounting standards

The Group contributes to employee personal pension plans and other similar US
retirement plans. The accounting standard FRS 17 'Retirement benefits' has no
impact on the financial statements as the Group does not operate a defined
benefit pension scheme.

The financial statements will be prepared under International Financial
Reporting Standards ('IFRS') for the financial year ending 29 September 2006.
The Company has commissioned an independent review to ascertain the key areas of
differences in accounting policies between IFRS and UK GAAP. Following this
review, a project plan will be developed in 2004 to manage the process of
conversion.

Financial calendar

Operating results for the financial year ended 1 October 2004 will represent 53
trading weeks (2003: 52 weeks). As part of its ongoing financial calendar, the
Company intends to update the market with a trading statement at the time of its
AGM in January 2004.


CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the 52 weeks ended 26 September 2003

                   Note            2003            2003       2003        2002
                          Before goodwill        Goodwill    Total       Total
                             amortisation    amortisation
                          and exceptional and exceptional
                                  items           items
                                  £'000           £'000      £'000       £'000
Turnover            2,3
                              -----------     -----------   --------   ---------
Continuing
operations                      139,051               -    139,051     145,232
Discontinued
operations                          374               -        374       4,169
                              -----------     -----------   --------   ---------
                                139,425               -    139,425     149,401
Cost of sales                   (68,891)              -    (68,891)    (77,819)
                               --------        --------   --------    --------

Gross profit                     70,534               -     70,534      71,582
Distribution costs               (2,956)              -     (2,956)     (2,928)
                              -----------     -----------   --------   ---------
Administrative
expenses                        
before goodwill
amortisation                    (34,351)              -    (34,351)    (35,410)
Goodwill
amortisation        2,5               -          (3,379)    (3,379)     (4,440)
                              -----------     -----------   --------   ---------
                                (34,351)         (3,379)   (37,730)    (39,850)
                               --------        --------   --------    --------
Operating
profit/(loss)       2,3
                              -----------     -----------   --------   ---------
Continuing
operations                       33,352          (3,379)    29,973      29,831
Discontinued
operations                         (125)              -       (125)     (1,027)
                              -----------     -----------   --------   ---------
                                 33,227          (3,379)    29,848      28,804
Loss on
disposal of
business              
(discontinued
operations)           5               -            (553)      (553)          -
Interest
receivable                          
and similar
income                              807               -        807         529
Movement on
investments
(exceptional
item)                 5               -               -          -         298
Interest
payable               
and similar
charges               4          (2,019)              -     (2,019)     (2,512)
                               --------        --------   --------    --------
Profit/(loss)
on ordinary
activities
before
taxation              2          32,015          (3,932)    28,083      27,119
Taxation on
profit/(loss)
on ordinary
activities            6          (9,805)          1,128     (8,677)     (8,302)
                               --------        --------   --------   ---------

Profit/(loss)
on ordinary
activities
after taxation                   22,210          (2,804)    19,406      18,817

Dividends             8         (10,788)              -    (10,788)    (10,011)
                               --------        --------   --------    --------
Retained
profit/(loss)
for the period                   11,422          (2,804)     8,618       8,806
                                 ======          ======     ======      ======

Earnings per
ordinary share
Basic                 7                                       20.0p       19.4p
Diluted               7                                       19.9p       19.4p
Earnings per
ordinary share
before goodwill
amortisation and
exceptional
items
Basic                 7                                       22.9p       22.4p
Diluted               7                                       22.8p       22.4p


CONSOLIDATED BALANCE SHEET
as at 26 September 2003

                                                Note        2003          2002
                                                           £'000         £'000

Fixed assets
Intangible assets                                  9      57,735        65,162
Tangible assets                                           26,670        25,794
Investment in own shares                           5         482           482
                                                       ---------     ---------
                                                          84,887        91,438
                                                       ---------      --------
Current assets
Stocks                                                     9,457         8,912
Debtors                                                   25,439        23,805
Cash at bank                                      13      23,295        24,064
                                                       ---------    ----------
                                                          58,191        56,781

Creditors: amounts falling due within one year           (34,848)      (37,063)
                                                       ---------   -----------
Net current assets                                        23,343        19,718
                                                       ---------    ----------

Total assets less current liabilities                    108,230       111,156
Creditors : amounts falling due in more than
one year                                                 (25,342)      (33,355)
Provisions for liabilities and charges                    (1,454)       (1,681)
                                                       ---------    ----------
Net assets                                         2      81,434        76,120
                                                           =====         =====

Capital and reserves
Called up share capital                                   24,347        24,347
Share premium account                                     15,824        15,824
Merger reserve                                                14            14
Profit and loss account                                   41,249        35,935
                                                       ---------     ---------
Equity shareholders' funds                         2      81,434        76,120
                                                          ======        ======


CONSOLIDATED CASH FLOW STATEMENT
for the 52 weeks ended 26 September 2003

                                                 Note        2003         2002
                                                            £'000        £'000

Cash inflow from operating activities              11      30,618       39,574

Returns on investments and servicing of
finance
Interest received                                             660          492
Interest paid                                              (2,027)      (2,452)
                                                        ---------    ---------
Net cash outflow from returns on investments
and servicing of finance                                   (1,367)      (1,960)

Taxation                                                   (7,828)      (7,741)

Capital expenditure and financial investment
Purchase of tangible fixed assets                          (5,098)      (3,598)
Sale of tangible fixed assets                                 170          100
Sale of own shares                                              -          552
                                                        ---------    ---------
Net cash outflow from capital expenditure and
financial investment                                       (4,928)      (2,946)

Acquisitions and disposals
Purchase of subsidiaries                                        -        2,996
Disposal of subsidiaries                                      120            -
                                                        ---------     --------
Net cash inflow from acquisitions and disposals               120        2,996

Equity dividends paid                                     (10,244)      (9,366)
                                                        ---------   ----------

Cash inflow before management of liquid
resources and financing                         12,13       6,371       20,557

                                                        ---------   ----------
Management of liquid resources                  

Transfer of cash to deposits                    12,13      (5,353)     (12,397)
                                                        ---------    ---------
Financing
Repayment of loan                               12,13      (6,714)      (7,700)
                                                        ---------    ---------
Net cash outflow from financing                            (6,714)      (7,700)
                                                        ---------    ---------

(Decrease)/increase in cash in the period       12,13      (5,696)         460
                                                           ======       ======


CONSOLIDATED STATEMENT
OF TOTAL RECOGNISED GAINS AND LOSSES
for the 52 weeks ended 26 September 2003

                                                            2003         2002
                                                           £'000        £'000

Profit for the period                                     19,406       18,817

Exchange differences on foreign currency net
investment                                                (3,304)      (2,724)
Taxation credit in respect of exchange differences on
loans used to hedge overseas net investment                    -          246
                                                       ---------    ---------
Total gains and losses relating to the period             16,102       16,339
                                                           =====        =====


RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
for the 52 weeks ended 26 September 2003

                                                           2003          2002
                                                          £'000         £'000

Profit for the period                                    19,406        18,817
Dividends                                               (10,788)      (10,011)
                                                     ----------    ----------
Retained profit for the period                            8,618         8,806

Exchange differences on foreign currency net
investment                                               (3,304)       (2,724)
Taxation credit in respect of exchange differences
on loans used to hedge overseas net investment                -           246
                                                     ----------      --------
Net addition to shareholders' funds                       5,314         6,328

Opening shareholders' funds                              76,120        69,792
                                                     ----------    ----------
Closing shareholders' funds                              81,434        76,120
                                                         ======        ======


                       NOTES TO THE FINANCIAL STATEMENTS

(1) Basis of preparation

The financial information set out above does not comprise full accounts within
the meaning of Section 240 of the Companies Act 1985. The financial information
contained in this announcement in respect of the 52 weeks ended 26 September
2003 and 52 weeks ended 27 September 2002 has been extracted from the financial
statements which have been audited and reported upon without qualification by
KPMG Audit Plc and did not contain a statement under Section 237 (2) or (3) of
the Companies Act 1985. The 2002 accounts have been filed with the Registrar of
Companies, and the 2003 accounts will be filed in due course.

In order to indicate the underlying profitability of the Group and the effect of
goodwill amortisation and exceptional items on reported profit; operating
profit, profit before tax and earnings per share has been calculated and
separately disclosed using consolidated profit before these items.

In order to indicate the underlying trading performance of the Group in local
currency terms, growth in turnover and operating profit has been calculated and
separately disclosed using constant foreign exchange ('FX') rates (at the actual
average exchange rate that applied to the comparative period).

(2) Segmental information

In the directors' opinion, all profit and turnover arises from one class of
business, that being the specialist design and manufacture of conservatory
systems for domestic and light commercial applications and may be analysed by
geographical market as follows:

                                           Note          2003             2002
                                                        £'000            £'000

Turnover
By origin
United Kingdom                                         90,694           90,534
North America                                          48,357           54,698
                                                   ----------       ----------
Total continuing operations                   3       139,051          145,232
Discontinued operations (United Kingdom)      3           374            4,169
                                                   ----------       ----------
                                                      139,425          149,401
                                                       ======           ======

By destination
United Kingdom                                         89,891           89,493
Rest of Europe                                          1,630            2,291
North America                                          47,349           53,187
Rest of World                                             181              261
                                                   ----------       ----------
Total continuing operations                           139,051          145,232
Discontinued operations (United Kingdom)                  374            4,169
                                                   ----------       ----------
                                                      139,425          149,401
                                                       ======           ======

(2) Segmental information (continued)

                  Note            2003            2003        2003        2002
                         Before goodwill        Goodwill     Total       Total
                            amortisation    amortisation
                         and exceptional and exceptional
                                 items           items
                                  £000            £000        £000        £000
Profit on
ordinary
activities before
taxation
By origin
United Kingdom                  28,848               -      28,848      27,880
North America                    6,457          (3,379)      3,078       3,995
Group head
office costs                    (1,953)              -      (1,953)     (2,044)
                             ---------       ---------   ---------   ---------
Total
continuing
operations           3          33,352          (3,379)     29,973      29,831
Discontinued
operations           
(United Kingdom)     3            (125)              -        (125)     (1,027)
                             ---------       ---------   ---------   ---------
                     3          33,227          (3,379)     29,848      28,804

Loss on
disposal of
business
(discontinued
operations)                                                   (553)          -
Movement on
investments
(exceptional
items)                                                           -         298
Net interest
payable                                                     (1,212)     (1,983)
                                                         ---------   ---------
Profit on
ordinary
activities
before
taxation                                                    28,083      27,119
                                                             =====       =====



                                                        2003             2002
                                                        £000             £000
Operating net assets

By origin

United Kingdom                                        26,769           24,105
North America                                         67,940           72,587
                                                   ---------        ---------
                                                      94,709           96,692

Net borrowings                                        (8,328)         (16,341)
Corporation and deferred taxation                     (5,429)          (4,713)
Investments                                              482              482
                                                   ---------        ---------
Shareholders' funds                                   81,434           76,120
                                                      ======           ======


(3) Analysis of continuing and discontinued operations

               Note                    2003                                2002
                           Cont     Discont       Total        Cont     Discont       Total
                           £000        £000        £000        £000        £000        £000

Turnover          2     139,051         374     139,425     145,232       4,169     149,401
Cost of                 (68,619)       (272)    (68,891)    (74,608)     (3,211)    (77,819)
sales
                      ---------   ---------   ---------   ---------   ---------   ---------
Gross profit             70,432         102      70,534      70,624         958      71,582
Distribution
costs                    (2,954)         (2)     (2,956)     (2,840)        (88)     (2,928)
Administrative
expenses
before
goodwill
amortisation            (34,126)       (225)    (34,351)    (34,283)     (1,127)    (35,410)
                      ---------   ---------   ---------   ---------   ---------   ---------
Operating
profit/(loss)
before
goodwill
amortisation      2      33,352        (125)     33,227      33,501        (257)     33,244
Goodwill
amortisation
(included
within
administrative
expenses)         2      (3,379)          -      (3,379)     (3,670)       (770)     (4,440)
                      ---------   ---------   ---------   ---------   ---------   ---------
Operating
profit/(loss)     2      29,973        (125)     29,848      29,831      (1,027)     28,804
                      ---------   ---------   ---------   ---------   ---------   ---------

Following the previous financial year end, the Group announced the disposal of
Ultraspan Limited on 18 November 2002. Further to this divestment, the relevant
operating results of Ultraspan Limited have been included in discontinued
operations for the year under review and the comparative period.

(4) Interest

The US dollar borrowings are fixed, by way of interest rate swaps, at an
interest rate of 4.59% plus a margin (in the range of 1.5% to 0.9%) up to June
2006.

The sterling borrowings are also fixed by way of interest rate swaps for the
period up to June 2004 at a rate of 3.60% plus a margin (in the range of 1.50%
to 0.90%). The borrowings are subject to floating rates thereafter based on
LIBOR plus a similar margin.



(5) Exceptional items

                                                          2003            2002
                                                          £000            £000
Operating exceptional item
Impairment of Ultraspan Limited goodwill                     -            (705)
Non-operating exceptional item
Loss on disposal of Ultraspan Limited                     (553)              -
Movement on investments                                      -             298
                                                     ---------       ---------
Total exceptional items before taxation                   (553)           (407)
                                                        ======          ======


On 18 November 2002, the Group announced the disposal of Ultraspan Limited to
Ultraspan's management team for a cash consideration of £200,000; of which
£100,000 was deferred until 14 May 2003. The Group incurred £80,000 of
professional costs relating to the disposal. The relevant net assets of
Ultraspan Limited on disposal were £673,000, resulting in a loss on disposal of
£553,000.

At 27 September 2002, in light of operating losses for Ultraspan Limited, the
directors reviewed the carrying value of fixed assets for impairment in line
with the requirements of FRS 11 'Impairment of fixed assets and goodwill'.
Following this review, goodwill acquired on the acquisition of Robinson Design
and Build Limited and Collis Structural Design Limited in September 2000 was
written down to the higher of net realisable value and value in use. Value in
use was calculated with reference to management approved forecasts for the
period ended September 2003 with nil growth rate assumed beyond this date. A
discount rate of 14% was used, being the estimated pre-tax weighted average cost
of the capital of the Group. Accordingly, an exceptional charge of £705,000 was
recorded in arriving at operating profit for 2002 in order to write down the
carrying value of goodwill to £nil. The Group subsequently announced the
disposal of Ultraspan Limited on 18 November 2002 and, as a result, this
exceptional charge relates to discontinued operations.

At 28 September 2001, the Ultraframe Qualifying Employee Share Ownership Trust
('QUEST') held 420,286 shares and the closing mid-market price was 175.0 pence
which was below the previous carrying value of 246.0 pence per share, being the
amount expected to be recoverable from option holders on exercise. Accordingly,
the carrying value was written down by £298,000 to £736,000, i.e. 175.0 pence
per share. The shares held by the QUEST were included in current asset
investments at 28 September 2001 as they were likely to be available to option
holders during the next 12 months. During the 26 week period to 29 March 2002,
220,660 shares held by the QUEST were issued to employees to satisfy options at
246.0 pence per share. At 29 March 2002, the QUEST held 199,626 shares and the
mid-market price was 319.0 pence compared with 246.0 pence per share, being the
estimated net realisable value by a comparison of market and option prices.
Therefore, the carrying value was written up by £142,000 to £492,000 being the
estimated net realisable value. Together with the gain realised on the shares
issued to employees, the total non-operating exceptional credit for the prior
period was £298,000. The investment was reclassified as a fixed asset at 29
March 2002, in recognition of the maturity profile of related outstanding SAYE
options. Accordingly, no gain or loss was recorded in the subsequent period to
27 September 2002. A further 3,963 shares were issued by the QUEST to employees
during the second half of the 2002 financial year. Therefore, at 27 September
2002 the QUEST held 195,663 shares at 246.0 pence per share resulting in a
carrying value in the balance sheet of £482,000.

(6) Taxation

                                                           2003           2002
                                                          £'000          £'000
UK Corporation tax
Current tax on income for period                          8,695          8,294
Adjustment in respect of prior periods                     (744)          (511)
                                                        -------        -------
                                                          7,951          7,783

Foreign tax                                                 203            329
Deferred tax
Origination/reversal of timing differences                  396            201
Adjustment to previous periods                              127            (11)
                                                        -------       --------
                                                            523            190
                                                        -------       --------
                                                          8,677          8,302
                                                           ====           ====

The tax charge of £8,677,000 represents an effective tax rate of 30.3% on
pre-tax profit before exceptional items for the year, compared with 30.2% in the
prior year.

(7) Earnings per share

Earnings per share has been calculated by dividing the consolidated profit after
tax attributable to ordinary shareholders by the weighted average number of
ordinary shares in issue during the period. In order to indicate the underlying
profitability of the Group and the effect of goodwill amortisation and
exceptional items on the reported earnings, earnings per share has also been
calculated using the consolidated profit after taxation before these items.

Diluted earnings per share has been calculated, on the same basis as the above,
except that the weighted average number of ordinary shares that would be issued
on the conversion of all the dilutive potential ordinary shares (arising from
the Group's share option schemes) into ordinary shares has been added to the
denominator. There are no changes to the profit (numerator) as a result of the
dilutive calculation.

The earnings per share information has been calculated as follows:

                                            2003                    2002
                                    Earnings    Earnings    Earnings    Earnings
                                   after tax   per share   after tax   per share
                                       £'000       pence       £'000       pence
Profit on ordinary activities
after taxation before goodwill
amortisation and exceptional
items                                 22,210        22.9      21,732        22.4
Goodwill amortisation (net of
tax)                                  (2,251)       (2.3)     (3,213)       (3.3)
Non-operating exceptional item          (553)       (0.6)        298         0.3
                                   ---------   ---------   ---------   ---------
Profit on ordinary activities
after taxation and
attributable to ordinary
shareholders                          19,406        20.0      18,817        19.4
                                   ---------   ---------   ---------   ---------
                                          No                      No
                                        '000                    '000
Weighted average number of
ordinary shares in issue              97,191                  97,107
Effect of dilutive potential
ordinary shares                          135                     113
                                   ---------               ---------
Weighted average number of
ordinary shares in issue plus
assumed conversion                    97,326                  97,220
                                   ---------               ---------

The above calculation excludes shares held by the QUEST in accordance with FRS
14.

(8) Dividends

The board has proposed a final dividend of 7.86 pence per share (2002: 7.30
pence) to be paid on 29 January 2004 to shareholders on the register at 5
January 2004. This, together with an interim dividend of 3.24 pence per share
(2002: 3.00 pence) paid on 23 June 2003, makes a total dividend for the year of
11.10 pence per share (2002: 10.30 pence).

(9) Goodwill

                                                                          £000
Cost
At beginning of period                                                  70,304
Exchange difference                                                     (4,344)
Disposals                                                                 (892)
                                                                     ---------
At 26 September 2003                                                    65,068
                                                                     ---------
Amortisation
At beginning of period                                                   5,142
Charge for period                                                        3,379
Exchange difference                                                       (296)
On disposals                                                              (892)
                                                                     ---------
At 26 September 2003                                                     7,333
                                                                     ---------
Net book value

At 26 September 2003                                                    57,735
                                                                     ---------
At 27 September 2002                                                    65,162
                                                                     ---------

Goodwill arising on acquisitions prior to April 1998 was written off to
reserves. Goodwill arising on subsequent acquisitions is capitalised and
amortised over its estimated useful life, which is 20 years.

(10) Exchange rates

The principal exchange rates used were as follows:

                                        Average                   Closing
                                     2003      2002           2003       2002

US dollar                            1.60      1.47           1.66       1.55
Canadian dollar                      2.34      2.31           2.25       2.45

2003 results compared with 2002 at constant 2002 exchange rates

Group                                             2003         2002          %
                                                  £000         £000     Change

Turnover on continuing operations              143,391      145,232       (1.3)
Operating profit on continuing operations       33,934       33,501        1.3
Operating profit                                30,124       28,804        4.6

North America                                     2003         2002          %
                                                  £000         £000     Change

Turnover (core sunrooms)                        51,798       52,419       (1.2)
Turnover (total)                                52,697       54,698       (3.7)
Operating profit before goodwill amortisation    7,037        7,665       (8.2)

(11) Reconciliation of operating profit to net cash inflow from operating
activities

                                                         2003            2002
                                                        £'000           £'000

Operating profit                                       29,848          28,804
Depreciation charge                                     3,344           4,115
Goodwill amortisation                                   3,379           4,440
Profit on sale of tangible fixed assets                    (3)            (35)
Increase in stocks                                     (1,156)            (67)
Increase in debtors                                    (3,103)         (2,273)
(Decrease)/increase in creditors                       (1,057)          4,644
Decrease in provisions                                   (634)            (54)
                                                   ----------      ----------
Net cash inflow from operating activities              30,618          39,574
                                                       ======          ======

(12) Reconciliation of net cash flow to movement in net debt
                                                            2003          2002
                                                           £'000         £'000

(Decrease)/increase in cash in the period                 (5,696)          460
Cash outflow from liquid resources                         5,353        12,397
Cash outflow from the movement in debt and lease
financing                                                  6,714         7,700
                                                       ---------     ---------
Changes in net debt resulting from cash flows              6,371        20,557

Exchange difference                                        1,642         1,333
                                                       ---------     ---------
Movement in net debt                                       8,013        21,890
Net debt at the start of the period                      (16,341)      (38,231)
                                                       ---------     ---------
Net debt at the end of the period                         (8,328)      (16,341)
                                                           =====         =====

(13) Analysis of changes in cash and net debt

               At 27 September    Cash flow         Exchange    At 26 September
                                                  difference
                        2002           £000            £000               2003
                        £000                                             £000

Cash in hand
and at bank           11,667         (5,911)          (211)             5,545
Liquid
resources
(deposits)            12,397          5,353              -             17,750
                  ----------     ----------     ----------         ----------
Cash at bank
as per balance
sheet                 24,064           (558)          (211)            23,295

Overdrafts              (215)           215              -                  -

Debt due in
less than one
year                  (6,835)           283            271             (6,281)
Debt due in
more than one
year                 (33,355)         6,431          1,582            (25,342)
                  ----------     ----------     ----------        -----------
Debt and lease
financing            (40,190)         6,714          1,853            (31,623)
                  ----------     ----------     ----------         ----------
Net funds            (16,341)         6,371          1,642             (8,328)
                      ======         ======         ======             ======

Liquid resources consist of short-term deposits of no more than three months
duration.

(14) Annual Report

The Annual Report and Accounts for the 52 weeks ended 26 September 2003 will be
posted to shareholders on or about 15 December 2003.

(15) The Annual General Meeting

The Annual General meeting will be held at Enterprise Works, Clitheroe at 2.00
pm on 23 January 2004.




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