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Universal Salvage (UVS)

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Thursday 08 December, 2005

Universal Salvage

Interim Results

Universal Salvage PLC
08 December 2005



                             UNIVERSAL SALVAGE PLC

                                Interim Results
                      for the 26 weeks to 29 October 2005

Key Points

       •  Business turnaround progressing well
            - Two new contracts adding approx 30,000 units per annum
            - Realignment of cost base substantially complete
       •  Revenue up by 6% to £25.4m (2004: £23.9m)
       •  Pre-exceptional operating loss reduced by 57% to £0.3m (2004: loss of £0.8m)
       •  Post-exceptional operating loss reduced by 63% to £0.5m (2004: loss of £1.3m)
       •  Pre-exceptional loss before tax reduced by 54% to £0.5m (2004: loss of £1.1m)
       •  Post-exceptional loss before tax reduced by 62% to £0.7m (2004: loss of £1.9m)
       •  Exceptional charges of £0.2m (2004: £0.7m)
       •  Loss per share 2.6p (2004: loss per share 6.7p)
       •  Net borrowings reduced to £5.5m (2004: £11.3m)
       •  Gearing reduced to 39% (2004: 84%)
       •  Net assets of £14.1m (2004: £13.5m)

Commenting on the results, Chairman, Alexander Foster, said,

I am pleased to report continuing progress and that the results for the period
to 29 October 2005 are a significant improvement over the same period last year.
We have continued to work hard, re-establishing the Universal brand within the
insurance marketplace and strengthening the business both at an operational and
managerial level.

Following changes to the management structure during the summer, along with the
letting of our mothballed Corby site, the realignment of the cost base of the
business is now substantially complete. The main focus of our activities is now
centred on reinvigorating the Groups sales effort and developing new business
opportunities.

Enquiries:

Universal Salvage    Avril Palmer-Baunack, Chief          T: 020 7448 1000
plc                  Executive                            (today)

                     Andrew Somerville, Group Finance     Thereafter: 01234
                     Director                             762283

Biddicks             Katie Tzouliadis                     T: 020 7448 1000


CHAIRMANS STATEMENT

Introduction

I am pleased to report continuing progress and that the results for the period
to 29 October 2005 are a significant improvement over the same period last year.
We have continued to work hard, re-establishing the Universal brand within the
insurance marketplace and strengthening the business both at an operational and
managerial level.

Results

This is the first interim report we have issued under the new International
Financial Reporting Standards (IFRS) and as a consequence, our comparative
figures have been restated from those previously reported under UK GAAP.

The Groups pre-exceptional operating loss for the 26 weeks to 29 October 2005
reduced by 57% to £0.3 million against last years pre-exceptional operating loss
of £0.8 million, on revenue up by 6% at £25.4 million (2004: £23.9 million).
Excluding exceptional items, the loss before tax improved to £0.5 million (2004:
loss before tax of £1.1 million) and the basic loss per share was 2.6 pence
(2004: loss per share 6.7 pence).  The Board is not proposing an interim
dividend.

Net borrowings have decreased to £5.5 million from £11.3 million at the same
point last year. This represents gearing of 39% (2004: 84%).  Net assets stood
at £14.1 million at 29 October 2005 against £13.5 million last year.

Business Turnaround

Following changes to the management structure during the summer, along with the
letting of our mothballed Corby site, the realignment of the cost base of the
business is now substantially complete. The main focus of our activities is now
centred on reinvigorating the Groups sales effort and developing new business
opportunities.

Over the course of the first half, we have significantly strengthened the sales
function at all levels. The team is working hard on repositioning the Universal
brand within the core insurance marketplace and we are seeking to build
relationships with all the major insurers in preparation for any future
tendering opportunities.  We are also pushing forwards with plans to widen our
customer base beyond just insurance contracts.  We believe that the self-insured
automotive market offers particularly interesting opportunities and are applying
significant effort in targeting third party insured corporate fleets, rental
companies and accident management companies.

We reported two significant insurance contract wins in the period; firstly in
June with Admiral Group plc and secondly in September when we signed an
exclusive agreement with the Co-operative Insurance Society Limited.  These
contracts add around 30,000 units per annum to our existing business. The new
contracts have had a limited impact on these trading results but will have a
much greater effect on the figures in the second half of the year.

The action we have taken over the last eighteen months has removed significant
excess cost from the business and we are now working on optimising operational
efficiency.  The operations team is making good progress in driving through
further changes in the way the business is managed.  We anticipate being able to
reduce the per unit operating costs further as volumes grow and improvements in
efficiency are implemented.

Prospects

As we move into the winter period, we expect the level of trading activity to
increase. However, it is hard to predict with certainty the pattern of future
auction results. Further initiatives to improve associated revenue streams and
gross margins continue to be reviewed to help reduce dependency on the
variability of auction pricing.

Whilst much has been achieved to return the business to profit, we are not quite
there yet.  There is still more to do and business to be won. The Board has
every confidence in the new team under Avril Palmer-Baunack's leadership and the
progress made to date should be further evidenced when I report the full year
results to shareholders next summer.


Alexander N Foster
Chairman
7 December 2005


UNIVERSAL SALVAGE PLC INTERIM RESULTS

GROUP INCOME STATEMENT (UNAUDITED)
26 weeks to 29 October 2005

                    26 weeks      26 weeks       Total    26 weeks      26 weeks        Total
                   to 29 Oct     to 29 Oct        2005   to 30 Oct     to 30 Oct         2004
                        2005          2005                    2004          2004
            Note      Before   Exceptional                  Before   Exceptional
                 exceptional         items             exceptional         items
                       items      (Note 2)                   items      (Note 2)
                        £000          £000        £000        £000          £000         £000

Revenue               25,387             -      25,387      23,885             -       23,885
Cost of sales        (20,535)            -     (20,535)     19,293)            -      (19,293)
                     --------     --------     -------     --------      --------     -------
Gross profit           4,852             -       4,852       4,592             -        4,592
Administrative
expenses              (5,198)         (141)     (5,339)     (5,404)         (516)      (5,920)
                     --------     --------     -------     --------      --------     -------
Operating loss          (346)         (141)       (487)       (812)         (516)      (1,328)
Interest
receivable                15             -          15          28             -           28
Interest
payable                 (191)          (57)       (248)       (356)         (222)        (578)
                     --------     --------     -------     --------      --------     -------
Loss before
taxation       2        (522)         (198)       (720)     (1,140)         (738)      (1,878)
Taxation                                             -                                      -
                     --------     --------     -------     --------      --------     -------
Loss after
taxation                                          (720)                               (1,878)
                     --------     --------     -------     --------      --------     -------
Loss per 
Ordinary share
-  basic and
diluted        3                                  (2.6)p                                (6.7)p


The 2004 comparatives have been restated under International Financial Reporting
Standards.

All operations of the Group are continuing throughout both periods and no
material operations were acquired.


GROUP INCOME STATEMENT (UNAUDITED)
26 weeks to 29 October 2005

                                      26 weeks to      26 weeks to    52 weeks to
                                       29 October       30 October       30 April
                                             2005             2004           2005
                                Note        £'000            £'000          £'000

Revenue                                    25,387           23,885         49,695
Cost of sales                             (20,535)         (19,293)       (39,583)
                                         ---------       ----------     ----------
Gross profit                                4,852            4,592         10,112
Administrative expenses                    (5,339)          (5,920)       (10,253)
                                         ---------       ----------     ----------
Operating loss                               (487)          (1,328)          (141)
------------------             ------    ---------       ----------     ----------
Operating loss before
exceptional items                   2        (346)            (812)          (974)
Exceptional items within
operating loss                               (141)            (516)           833
------------------             ------    ---------       ----------     ----------
Net interest payable                         (233)            (550)          (943)
------------------             ------    ---------       ----------     ----------
Net interest payable before
exceptional items                            (176)            (328)          (546)
Exceptional items facility          2         (57)            (222)          (397)
fees                           ------    ---------       ----------     ----------
------------------
Loss before taxation                2        (720)          (1,878)        (1,084)
------------------             ------    ---------       ----------     ----------
Loss before taxation and
exceptional items                   2        (522)          (1,140)        (1,520)
Total exceptional items                      (198)            (738)           436
------------------             ------    ---------       ----------     ----------
Taxation                                        -                -           (540)
                                         ---------       ----------     ----------
Loss after taxation                          (720)          (1,878)        (1,624)
                                         ---------       ----------     ----------
Loss per Ordinary share
(pence)
- basic and diluted                 3        (2.6)p           (6.7)p         (5.8)p


There are no recognised gains and losses for the current period and preceding
period other than the loss shown above.


GROUP BALANCE SHEET (UNAUDITED)

                                                At            At                 At
                                        29 October    30 October           30 April
                                              2005          2004               2005
                                 Note        £'000         £'000              £'000

Non current assets
Property, plant and equipment               22,084        26,829             22,738
Intangible assets                              140           366                153
                                          ----------    ----------         ----------
                                            22,224        27,195             22,891

Current assets
Assets held for resale                         220         1,413                 77
Inventories                                  2,013         1,619              2,708
Trade and other receivables                  3,453         2,947              3,597
Cash and cash equivalents                      223           733                 13
                                          ----------    ----------         ----------
                                             5,909         6,712              6,395

Current liabilities                         (6,424)       (9,401)            (6,924)
                                          ----------    ----------         ----------
Net current liabilities                       (515)       (2,689)              (529)
                                          ----------    ----------         ----------
Total assets less current                   
liabilities                                 21,709        24,506             22,362
Non current liabilities                     (5,904)       (8,110)            (5,892)
Provisions for liabilities and              
charges                                     (1,698)       (2,905)            (1,719)
                                           ---------    ----------         ----------                     
Net assets                                  14,107        13,491             14,751
                                           ---------    ----------         ----------
Shareholders equity
Ordinary shares                              2,826         2,826              2,826
Share premium                                1,216         1,216              1,216
Capital redemption reserve                      30            30                 30
Revaluation reserve                          3,179         5,365              3,158
Hedging reserve                                (49)          (62)               (49)
Retained earnings                            6,905         4,116              7,570
                                           ---------    ----------         ----------
Total equity                       4        14,107        13,491             14,751
                                           ---------    ----------         ----------


GROUP CASH FLOW STATEMENT (UNAUDITED)

                                       26 weeks to    26 weeks to      52 weeks to
                                        29 October     30 October         30 April
                                              2005           2004             2005
                               Note          £'000          £'000            £'000
Cash flow from operating
  activities
Cash generated from operations    5            810           (803)          (1,306)
Interest received                               15             28               56
Interest paid                                 (219)          (303)            (604)
Bank facility fees paid                        (64)             -             (194)
Taxation received                                -            350              350
                                          ----------     ----------       ----------
Net cash from operating
activities                                     542           (728)          (1,698)
                                          ----------     ----------       ----------
Cash flows from investing
  activities
Proceeds from sale of
property, plant and equipment                   52              -            6,816
Receipt for potential sale of
site                                           160              -                -
Purchase of property, plant
and equipment                                 (396)          (224)            (585)
                                          ----------     ----------       ----------
Net cash used in investing
activities                                    (184)          (224)           6,231
                                          ----------     ----------       ----------
Cash flows from financing
  activities
Bank and other loans drawn-down                  -          1,673                -
Repayment of borrowings                       (148)             -           (4,532)
                                          ----------     ----------       ----------
Net cash used in financing
activities                                    (148)         1,673           (4,532)
                                          ----------     ----------       ----------
Net increase in cash and cash
equivalents                                    210            721                1
Opening cash and cash
equivalents                                     13             12               12
                                          ----------     ----------       ----------
Closing cash and cash
equivalents                                    223            733               13
                                          ----------     ----------       ----------


NOTES TO THE INTERIM FINANCIAL STATEMENTS
at 29 October 2005

1. Basis of preparation

The interim financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS). The accounting policies and
basis of preparation followed in the Interim Report are as published by the
Group in its transition document on 25 October 2005, which is available on the
Groups website www.universal-services.co.uk.

The interim financial statements do not constitute full statutory accounts and
are unaudited. They have, however, been reviewed by the auditors and their
report is set out on pages 11 and 12. Figures for the 52 weeks to 30 April 2005
have been extracted from the Annual Report and Accounts for that period, which
received an unqualified audit opinion, and have been filed with the Registrar of
Companies.

The reconciliations of equity at 2 May 2004 (date of transition to IFRS), 30
October 2004 and 30 April 2005 (date of last UK GAAP financial statements) and
the reconciliation of profit for the period to 30 October 2004 and to 30 April
2005, as required by IFRS1, were shown in the transition document published on
25 October 2005.

The financial information presented in this document has been prepared in
accordance with all current IFRS (including International Financial Reporting
Interpretations Committee (IFRIC) pronouncements) in place for reporting to the
period to 29 April 2006. The IFRS applied are those that have been, or are
expected to be, endorsed by the European Commission by the time the Group
prepares its first set of consolidated financial statements for the period to 29
April 2006. It is possible that those IFRS still awaiting endorsement may be
changed prior to this date and this, together with other pronouncements or
guidance issued, may result in the financial information presented in this
document being modified prior to the publication of those financial statements.

2. Group income statement

The loss for the period is after charging exceptional restructuring costs
amounting to £0.1m (2004: £0.5m) and exceptional interest costs representing the
amortised bank facility fees of £0.1m (2004: £0.2m).

All items dealt with in arriving at profit before taxation relate to continuing
activities.

3. Loss per share

Basic loss per share has been calculated on the loss after taxation for the
period of £720,000, compared to a loss after taxation for 2004 of £1,878,000,
divided by the weighted average number of Ordinary shares in issue during the
period, excluding shares held by the Universal Salvage plc 2000 Employees Share
Trust.

The number of shares in issue at 29 October 2005, excluding shares held by the
Universal Salvage plc 2000 Employees Share Trust, was 28,008,098 (2004:
28,008,098).

Diluted loss per share is based on the loss for the period and all dilutive
potential Ordinary shares.

4. Reconciliation of movement in equity shareholders' funds and movements in
    reserves

                               26 weeks to       26 weeks to       52 weeks to
                                29 October        30 October          30 April
                                      2005              2004              2005
                                     £'000             £'000             £'000

Opening shareholders' equity        14,751            15,346            15,346

Share options value of
  employee services                     55                23                64
Deferred tax on revalued land
  and buildings                         21                 -               965
Loss after tax for the period         (720)           (1,878)           (1,624)
                                 -----------       -----------        ----------
Closing shareholders' equity        14,107            13,491            14,751
                                 -----------       -----------        ----------

5. Reconciliation of operating loss to cash generated from operations

                                     26 weeks to   26 weeks to   52 weeks to
                                      29 October    30 October      30 April
                                            2005          2004          2005
                                           £'000         £'000         £'000

Operating loss                              (487)       (1,328)         (141)
Depreciation of property, plant and
equipment                                    878         1,031         2,174
Profit on disposal of property,
plant and equipment                           (9)            -        (1,802)
Decrease/(increase) in inventories           695           488          (622)
Decrease/(increase) in receivables           144           123          (345)
Decrease in trade and other
payables                                    (411)       (1,117)         (570)
                                        ----------   -----------    ----------
Cash generated from operations               810          (803)       (1,306)
                                        ----------   -----------    ----------

6. Reconciliation of movements in cash and cash equivalents to movements in net
    debt

                                     26 weeks to   26 weeks to   52 weeks to
                                      29 October    30 October      30 April
                                            2005          2004          2005
                                           £'000         £'000         £'000
Increase in cash and cash
equivalents in the period                    210           721             1
Cash outflow/(inflow) from
decrease/(increase) in bank
and other loans drawn-down                   148        (1,673)        4,532
                                        ----------    ----------    ----------
Movement in net debt in period               358          (952)        4,533
Opening net debt at start of period       (5,833)      (10,366)      (10,366)
                                        ----------    ----------    ----------
Closing net debt at end of period         (5,475)      (11,318)       (5,833)
                                        ----------    ----------    ----------

7. Analysis of closing net debt

                             26 weeks to        26 weeks to        52 weeks to
                              29 October         30 October           30 April
                                    2005               2004               2005
                                   £'000              £'000              £'000

Cash and cash equivalents            223                733                 13
Bank overdraft                         -                  -               (148)
Finance leases                       (51)               (51)               (51)
Bank loans                        (5,647)           (12,000)            (5,647)
                                ----------         ----------         ----------
                                  (5,475)           (11,318)            (5,833)
                                ----------         ----------         ----------

8. Interim Report

Copies of this Interim Report will also be available from the Company Secretary
at the registered office of Universal Salvage plc, and on-line at
www.universal-services.co.uk:

Acrey Fields, Woburn Road, Wootton, Bedfordshire MK43 9EJ.
Tel: 0870 458 9210   Fax: 01234 762204


INDEPENDENT REVIEW REPORT TO UNIVERSAL SALVAGE PLC

Introduction

We have been instructed by the Company to review the financial information for
the 26 weeks ended 29 October 2005 which comprises Group interim balance sheet
as at 29 October 2005 and the related Group interim statements of income, cash
flows and changes in shareholders' equity for the 26 weeks then ended and
related notes. We have read the other information contained in the Interim
Report and considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.

Directors' responsibilities

The Interim Report, including the financial information contained therein, is
the responsibility of, and has been approved by the Directors. The Directors are
responsible for preparing the Interim Report in accordance with the Listing
Rules of the Financial Services Authority.

As disclosed in note 1, the next annual financial statements of the Company will
be prepared in accordance with accounting standards adopted for use in the
European Union.  This Interim Report has been prepared in accordance with the
basis set out in note 1.

The accounting policies are consistent with those that the Directors intend to
use in the next annual financial statements. This interim financial information
has been prepared in accordance with those IFRS standards and IFRIC
interpretations issued and effective or issued and early adopted as at the time
of preparing this information. The IFRS standards and IFRIC interpretations that
will be applicable and adopted for use in the European Union at 29 April
2006, are not known with certainty at the time of preparing this interim
financial information.

Review work performed

We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of management and applying analytical
procedures to the financial information and underlying financial data and, based
thereon, assessing whether the disclosed accounting policies have been applied.
A review excludes audit procedures such as tests of controls and verification of
assets, liabilities and transactions. It is substantially less in scope than an
audit and therefore provides a lower level of assurance. Accordingly we do not
express an audit opinion on the financial information. This report, including
the conclusion, has been prepared for and only for the Company for the purpose
of the Listing Rules of the Financial Services Authority and for no other
purpose. We do not, in producing this report, accept or assume responsibility
for any other purpose or to any other person to whom this report is shown or
into whose hands it may come save where expressly agreed by our prior consent in
writing.

Review conclusion

On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the 26 weeks ended
29 October 2005.


PricewaterhouseCoopers LLP
Chartered Accountants
London
7 December 2005

Notes:

(a) The maintenance and integrity of the Universal Salvage plc web site is the
responsibility of the Directors; the work carried out by the auditors does not
involve consideration of these matters and, accordingly, the auditors accept no
responsibility for any changes that may have occurred to the Interim Report
since it was initially presented on the web site.

(b)  Legislation in the United Kingdom governing the preparation and
dissemination of financial information may differ from legislation in other 
jurisdictions.




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