Interim Results - Half-year to 30 June 1999
COHEN (A) & CO PLC
15 October 1999
Interim Report :Half-year to 30 June 1999
The un-audited Group results of A. Cohen & Co plc for the half year ended 30
June 1999 with the corresponding period to 30 June 1998, are set out below,
together with the year ended 31 December 1998.
Half Year to Half Year to Year to
30 June 30 June 31 December
1999 1998 1998
£000 £000 £000
Group turnover from 34243 33,345 67582
continuing operations
Operating loss from (924) (906) (1,920)
continuing operations
Operating loss from - (35) (94)
discontinued operations
Profit from interests in 57 69 89
associated undertakings
Loss on ordinary activities (867) (872) (1,925)
before taxation
Less:Taxation
Group undertakings - - -
UK
Overseas - (7) 4
Associated (5) (7) 3
undertakings: Overseas
(5) (14) 7
Loss on ordinary
activities after taxation (872) (886) (1,918)
attributable to shareholders
Losses per share (52.8p) (53.6p) (116.1p)
The Group's performance for the first half continued to be unfavourably affected
by the poor trading conditions prevailing in the metals markets in which the
company operated and difficulties associated with a number of the group
activities.
Notwithstanding the above, positive contributions to profits for the 6 month
period to June were made by Jacob Metals, the Group's metal trading activities,
the Glasgow aluminium activities and the interests the group holds in South
Africa and Zimbabwe. These activities have continued to be profitable in the
second half of the financial year to date.
The major subsidiary of the group, Nonferral Pty Ltd (Nonferral) has returned to
profitability after a loss in the first half year to June from its activities in
Australia. The silver trading and recovery activities of Silec Pty Ltd (Silec)
have not recovered from the 1998 losses and the company has continued to perform
poorly.
The Woolwich copper based activities in the UK are operating at a much improved
level compared to last year, however the result is still unsatisfactory.
Together with head office overhead and finance costs, these represented the
greatest part of the loss in the first half and have continued to make losses
into the current half year, although at lower levels than last year.
The period since my involvement and following my appointment after the Annual
General Meeting 10 August 1999 has been challenging, and the board has accepted
recommendations involving a restructuring of operations. These include the
integration of the Glasgow aluminium recycling activities with the Nonferral non
-ferrous activities to create a more significant multi-location aluminium group,
with both ferrous and other non-ferrous activities throughout Australia, New
Zealand and the United Kingdom able to service customers around the world.
The name of Nonferral will change to Nonferral Recyclers Limited. There has been
a placement of shares in Nonferral, and it is intended to produce a prospectus
and to seek a quotation on the Australian Stock Exchange by the end of the year,
in order to raise additional capital finance. The new shares intended to be
issued to the Australian public would not exceed 49% of the expanded capital of
Nonferral.
The group investments in Silec Pty Ltd Silver recovery business will be written
down in the current half year after the continuing poor results. The range of
activities of Silec will be broadened, to include other commodity trading and
investment activities to be undertaken by joint venture of this company, and it
is hoped that this will minimise future losses and contribute to some return on
the residual investment in, and loans to, this company the next year.
The structure of the Woolwich copper based production activities is being
changed, and the results of this are expected to be known by the end of the year
and will be reported upon with the full year results..
Most of the operational staff have been relocated from Clareville House to the
Woolwich and Jacob Metals offices as part of the drive to reduce the burden of
overheads. Negotiations to sub-let part of Clareville House not required for
future operations are underway.
Group financing arrangements have been re-negotiated, which together with the
restructuring of activities outlined above, should assist the working capital
and general financing arrangements after a challenging period, and thus the
development and expansion of the future activities of the Group into the new
calendar year. Unfortunately, a restructuring of the nature and size, which the
Group is presently undertaking, has resulted in a number of management changes
and redundancies. The full restructuring costs, which will be written off in the
second half of this year are expected to be up to two million pounds.
The directors cannot recommend the payment of a dividend in the above
circumstances but it is expected that most of the activities will return to
profit during next year and those that do not will be sold or closed.
Positive steps have already been taken both by Jacobs Metals Ltd which has
recently established operations in South America, and Nonferral which is
expected to become much more active in Asia after completion of the proposed
public float.
Any further enquiries should be directed to myself at Tel 00 613 9827 9804 or
the Company Secretary Mr. Simon Redman on Tel 0181 310 7890.
Royce Pitchie
Executive Chairman
A. Cohen &Co. plc
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