Chairman's Statement for 6 Months Ended 30 June 99
BUCKLAND INVESTMENTS PLC
28 October 1999
BUCKLAND INVESTMENTS PLC
INTERIM REPORT
FOR THE SIX MONTHS ENDED 30 JUNE 1999
BUCKLAND INVESTMENTS PLC
Chairman's Statement for the six months ended 30 June 1999
I am pleased to present the interim results for Buckland for the six month
period ended 30th June 1999. These are the first interirn results to include a
full six months' contribution from Connectic Metallo SA ('CM') and Euro Asia
Connectors Co Ltd ('EAC'), which were acquired in March 1998. The results show
a consolidated profit before tax of £ 22,000 on sales of £ 3.201m. After tax
and minority charges of £ 32,000, there was a small attributable loss of
£ 10,000, equivalent to 0.08 pence per share. Cash flow over the first half of
the year was positive and the group's net indebtedness over the period fell in
sterling terms by £ 360,000. No dividend is proposed.
Trading
The price competition which was such a feature of 1999 has lessened during the
year to date. That factor, together with continuing cost reductions and
favourable exchange rate movements between the French franc, the Thai Baht and
the US dollar, have enabled us to improve our operating profits at the interim
stage. Providing that currency markets remain relatively stable, we expect to
make further progress over the rest of the year.
Trading in Europe during the first half as expected, was significantly lower
than for the corresponding period a year ago which was inflated by demand ahead
of the Football World Cup. This year the market was in fact depressed by
overstocking of televisions amongst many of the major manufacturers. However,
since the summer demand has recovered sharply and our European order book
currently stands at a record level, with sales of SCART connectors for set-top
boxes being a particular feature.
In Asia, the opening six months saw further growth in unit sales of CRT sockets
for computer monitors, particularly for the increasingly important large screen
sector, but the television and VCR market were more subdued. For the second
half of the year, sales are running ahead of budget with a strong current order
book.
Restructuring
During the first half of the year, we made further progress in restructuring
Connectic and EAC. By the end of the summer, numbers employed in France had been
reduced to 19 compared with 35 when we acquired the business and 26 last
December. As a result, we have seen a substantial cut in payroll and associated
costs, with the full benefits coming through from May onwards as the related
redundancy payments were completed.
As anticipated in my last statement. we took possession of a second rented
factory on the outskirts of Banokok at the beginning of September and work is
now in progress on fitting out the premises to accommodate the transfer from
France of our metal stamping and bending operations. Two bending machines are
currently in transit to Thailand and the remaining ten bending and stamping
machines will be transferred to EAC progressively over the next six months. In
the new factory, we will also be setting up our own surface treatment line which
we expect to be operational by the end of January.
In recent months, in preparation for the transfer of the remaining manufacturing
operations from France, we have also strengthened our management team in
Thailand and completed the process of identifying and approving new key
suppliers and sub-contractors in Asia to replace those currently used in Europe.
The cost benefits resulting from increased sourcing in Asia will be material.
With the timetable for completing the transfer from France now clearly defined,
we have also started negotiations for the sale of the freehold factory at Vitry,
which will soon be surplus to our requirements. We will be relocating our
remaining operations in France (sales, finance and design and development) to
much smaller, leasehold premises.
Once the transfer to Thailand is completed we will see a significant reduction
in our unit production costs and working capital requirements and will also be
able to respond more rapidly to our customers' demands. In anticipation of the
improved competitiveness and efficiency which locating all our manufacturing
operations in Thailand should bring, we are increasing the resources devoted to
new product development in order to supplement our existing major lines in CRT
sockets and SCART connectors. We plan to introduce two new product lines in the
first half of next year.
Outlook
We are pleased to be able to report a modest pre-tax profit for the first six
months of 1999 and we expect to make further progress in the second half.
However, it is the first half of next year, which should see a real
transformation in the prospects for Connectic and EAC with a lower cost base and
a wider product range.
Patrick Rogers
Chairman
28 October 1999
BUCKLAND INVESTMENTS PLC
Interim Report
Consolidated profit and loss account for the six months period ended
30 June 1999
Unaudited Unaudited
Six month Six month Eleven month
Period ended Period ended Period ended
30 June 1999 31 July 1998 31 December 1998
£'000 £'000 £'000
Turnover 3,201 3,388 6,647
Operating profit 79 16 31
Net interest payable (57) (76) (163)
Profit/(loss) on ordinary
activities before taxation 22 (60) (132)
Taxation (14) - -
Profit/(loss) on ordinary
activities after taxation 8 (60) (132)
Minority interests (18) (7) (3)
Retained loss for the period (10) (67) (129)
Loss per ordinary share Pence Pence Pence
Basic (0.08)p (0.62)p (1.12)p
Diluted (0.08)p (0.62)p (1.09)p
BUCKLAND INVESTMENTS PLC
Interim Report
Notes to the interim results
1 The consolidated profit and loss account incorporates the unaudited results
of Buckland Investments Plc and all of its subsidiary undertakings made up
to 30 June 1999, and have been prepared an a basis consistent with the
accounting policies set out in the audited financial statements for the
eleven month period ended 30 June 1999.
2 This Interim Report was approved by the board of directors on 28 October
1999.
This interim financial information does not comprise statutory accounts as
defined in Section 240 of the Companies Act 1985.
The financial information for the period ended 31 December 1998 is an extract
from the latest company accounts. The accounts received an unqualified
auditors report and have been filed with the Registrar of Companies.
The financial information for the period ended 30 June 1999 has not been
subject to review by the auditors.
3 Copies of this Interim Report are being sent to shareholders and are
available from the Company Secretary at Piercy House, 7/9 Copthall Avenue,
London, EC2R 7NJ
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