RNS Number:1435U
Heiton Group PLC
13 January 2004
HEITON GROUP PLC
INTERIM ANNOUNCEMENT OF AUDITED RESULTS
FOR HALF YEAR ENDED 31st OCTOBER 2003
* Turnover Euro255.5m, up 4%
* Pre tax profit (pre exceptional items) of Euro15.0m, up 29%
* Adjusted EPS of 27.3c per share, an increase of 23%
* Net cash inflow from operating activities increased to Euro19.6m
* Interim dividend of 7.0 cent per share, an increase of 13%
* Net debt reduced to Euro53.5m, a gearing level of 36%
Commenting on the results, Leo Martin, Chief Executive of Heiton Group said, "
This is a strong set of results for the Group, with EPS growth of 23% and
continued strong cash generation. We are encouraged by the robust performance
achieved across all of our divisions and are pleased to report that the new
organisation structure, announced last July, is performing effectively.
Market conditions in Ireland have been positive with housing and RMI (Repairs,
Maintenance and Improvement) performing particularly well during the period.
Our Heiton Trade and Heiton Retail divisions, which are positioned to tap into
this expanding segment of the construction market, have experienced a period of
strong organic growth. The economic outlook for Ireland for 2004 remains
optimistic fuelling RMI activity although lower growth levels are expected in
the new housing market in 2004.
We have experienced stronger trading and profitability in the UK. Considerable
progress has been made with our restructuring programme and we remain confident
that the work carried out this year will provide a platform for an improved
performance going forward.
Following the achievements of all the divisions in the first half, your Board
remains confident of a satisfactory outturn for the full financial year."
-Ends-
13th January 2004
For reference:
Leo Martin Peter Byers
Group Chief Executive Group Finance Director
Heiton Group plc Heiton Group plc
Tel : 01 403 4000 Tel : 01 403 4000
Mobile : 087 2563296 Mobile : 086 2466755
Issued on behalf of Heiton Group by Drury Communications
Contact:
Orla Benson/Billy Murphy
Drury Communications
Tel: 01 260 5000
Mobile : 087 803 3262/087 231 3085
Interim Results Statement
Half year to 31 October 2003
Results and Dividends
I am very pleased to report that the first half of the financial year 2003/2004
has been a successful one for your Group. Against a back-drop of sales growth
of 4.1% over last year, profit before tax and exceptionals has risen by 29.2%
while earnings per share before goodwill and exceptional items has grown by 23%
to 27.3c. This result has been enhanced by a profit on property transactions
amounting to Euro1.7m during the period.
It has also been a good period for cash generation with net debt reducing to
Euro53.5m from Euro79.5m in October 2002 and Euro63.2m at April 2003. This strong
performance further enhances the Group's balance sheet and positions us well to
be able to capitalise on future development opportunities.
The Board is proposing an interim dividend of 7.0c, an increase of 12.9% above
the 6.2c paid last year. This continues your Board's progressive dividend
policy.
Operating Review
Trading has been very satisfactory in the six months to 31 October 2003 and the
programmes announced in July and at the AGM in September have proceeded as
planned. Market growth in Ireland has been quite strong with housing and RMI
(repairs, maintenance and improvements) performing particularly well during that
period.
I am happy to report that the new organisation structure whereby the Group
operates through three divisions - Heiton Trade, Heiton Retail and Heiton UK -
is working well. The greater cohesion and synergy arising from the new
structures, together with the strength of the management teams and their
programmes, has resulted in an improved performance from each of these
divisions.
In the UK, the new strategy and restructuring of UK operations were announced in
July and are already producing positive results. The UK management team is
progressing well towards implementation of the various elements of this
restructuring and we remain optimistic that the work will be completed during
this financial year giving the UK business a strong platform for development and
expansion in the future. Profitability has been significantly enhanced.
Heiton Trade
Heiton Trade comprises Heiton Buckley, Cork Builders Providers, Heiton Steel,
Sam Hire, Wright Window Systems and Morgans Timber. This division has had a
successful six months. Turnover growth of 8.3% was achieved, with positive
contributions being made by all businesses. Those businesses with a higher
exposure to the housing and RMI segments of the construction market have
performed especially well and, across the division as a whole, operating profit
margins have improved.
During the period, management has focused on extracting greater benefits from
the integration of these businesses. There will be a greater concentration on
the RMI segment of the market with the product range, merchandising, marketing
and support systems all geared towards increasing our share of this growing
sector of the construction market. Development of the existing infrastructure
continues with the completion of the new facility in Ballyshannon, Co Donegal
which is due to be opened early in 2004. Further, plans to consolidate two or
more businesses on a single site (eg Sam Hire with Heiton Buckley) are well
advanced in two locations around the country. Wright Windows has had a very
successful period of trading and it has a full forward order book.
In summary, this has been a good period of trading for Heiton Trade while the
foundations are being laid for further growth in the future including the
examination of suitable acquisition opportunities.
Heiton Retail
Heiton Retail brings together Atlantic Homecare and the Panelling Centre. These
businesses have met the strong growth targets which were set for them with
turnover rising by 10.3% and a significant improvement in operating margins.
During the period, the official opening of "In-House at the Panelling Centre"
took place in Santry, Dublin. This new showroom is one of the largest of its
kind in Ireland and represents an excellent offer to the kitchen trade and
consumer alike. It offers a doubling of showroom and warehouse space, enhances
considerably the display of kitchen units in the new showrooms and is already
attracting a noticeable increase in activity.
In November, the Atlantic store in Galway relocated to a new 50,000sq ft unit
and this has performed extremely well in its early weeks. Also in November,
Atlantic announced the planned opening of three new stores which are to be
located in Tullamore, Wexford and Limerick.
These developments, together with the improved organic performance, offer the
Retail division good prospects for the future.
Heiton UK
Trading during the first half has been successful and a significant improvement
on last year. Profitability has risen significantly over last year's levels
notwithstanding the negative currency translation effect.
The Heiton UK management team is well advanced in tackling their restructuring
programme. The dry lining business has now been closed resulting in increased
profitability for the business and lower investment levels. The level of stocks
in the garage doors division has been steadily reduced during the period with a
view to disposal in the second half of the year. The plan for the Southern
division, based in Surrey, will be to transfer into a new location during the
second half of the year. Given the improved location, this should help to
improve trading from a significantly reduced asset base. The site will then be
put on the market for disposal at an optimum time. In addition, one of the two
sites in the North (Farnworth) is actively being marketed.
UK management remains positive regarding the outlook for their business with an
expectation that the restructuring work being carried out this year will provide
a good platform for a continued improved performance in the future.
Board and Management
As announced at the annual general meeting in September, we are delighted to
have secured the services of Mr. Willie Cotter as a new non-executive director.
Mr Cotter was officially appointed on 18 September 2003. Until recently, Mr
Cotter was Chief Executive of Bank of Ireland Asset Management, the largest fund
management company in Ireland.
Finance
As mentioned earlier, the generation of positive cashflow has been a feature of
the Groups' performance in recent years. Cashflow from operating activities of
Euro19.6m is above the historically record level achieved last year while net cash
flow before financing of Euro9.6m is Euro7.5m above last years levels. These have
been delivered following the successful trading results for the period, a
continuation of the higher levels of working capital turnover, the disposal of
certain under-utilised fixed assets including a site in Santry, Dublin, which
yielded a net surplus amounting to Euro1.7m and the concentration of capital
expenditure into revenue enhancing projects.
The result of this work has been a reduction in net debt from Euro63.2m at 30 April
2003 to Euro53.5m at 31 October 2003.
Outlook
The economic outlook for the second half of the year looks positive in both
Ireland and the UK, although the growth level in the Irish housing market is
unlikely to remain as strong as it has been throughout 2003. Nevertheless,
following the achievements of all divisions in the first half, your Board
remains confident of a satisfactory outturn for the full financial year.
Richard Keatinge
Chairman
13 January 2004
HEITON GROUP PLC
GROUP PROFIT AND LOSS ACCOUNT
for the HALF YEAR TO 31 OCTOBER 2003
Twelve Six Six
Months to Months to Months to
30 April 2003 31 October 2003 31 October 2002
Audited Unaudited Unaudited
Euro'000 Euro'000 Euro'000
479,077 Turnover 255,521 245,450
27,304 Operating profit before operating exceptional item 17,075 14,319
(13,098) Exceptional goodwill write-off and restructuring 0 0
costs
14,206 Operating profit 17,075 14,319
- Exceptional items - property gains 1,694 -
14,206 Profit before interest and taxation 18,769 14,319
(5,083) Interest payable (2,085) (2,713)
9,123 Profit before taxation 16,684 11,606
(3,214) Taxation (2,398) (1,859)
5,909 Profit for financial period 14,286 9,747
Dividends:
(9) Preference (4) (4)
(7,076) Ordinary (3,472) (3,045)
(1,176) Profit/(loss) retained for the period 10,810 6,698
Earnings per ordinary share
43.08c - Pre-goodwill and pre-exceptional items 27.30c 22.19c
38.33c - Basic earnings per share pre-exceptional 25.52c 19.80c
item
11.99c - Basic earnings per share 28.96c 19.80c
11.97c - Diluted earnings per share 28.77c 19.77c
14.40c Dividend per ordinary share 7.00c 6.20c
GROUP BALANCE SHEET
As at 31 OCTOBER 2003
30 April 2003 31 October 2003 31 October 2002
Audited Unaudited Unaudited
Euro'000 Euro'000 Euro'000
Fixed Assets
128,987 Tangible assets 128,224 132,610
30,641 Intangible assets 29,895 42,095
2,831 Financial assets 2,831 2,831
162,459 160,950 177,536
Current assets
62,650 Stocks 61,382 64,662
99,796 Debtors 107,616 105,647
17,965 Cash at bank and in hand 13,347 15,361
180,411 182,345 185,670
Creditors - Amounts falling due within one year
(15,680) Bank overdraft and other debt (25,801) (13,730)
(1,213) Deferred acquisition consideration (6,293) (4,131)
(116,284) Other liabilities (120,597) (114,641)
(133,177) (152,691) (132,502)
47,234 Net current assets 29,654 53,168
209,693 Total assets less current liabilities 190,604 230,704
Creditors - Amounts falling due after more than
one year
(65,500) Bank loans and other debt (41,062) (81,160)
(5,757) Deferred acquisition consideration 0 (2,929)
(71,257) (41,062) (84,089)
Provisions for liabilities and charges
(868) Deferred taxation (868) (865)
137,568 148,674 145,750
137,568 Shareholders' funds 148,674 145,750
GROUP CASH FLOW STATEMENT
For the HALF YEAR ENDED 31 OCTOBER 2003
Twelve Six Six
Months to Months to Months to
30 April 2003 31 October 2003 31 October 2002
Audited Unaudited Unaudited
Euro'000 Euro'000 Euro'000
46,088 Net cash inflow from operating activities 19,624 19,223
Returns on investments and servicing of finance
(4,904) Interest and preference dividends paid (2,027) (2,632)
(5,422) Taxation paid (2,477) (3,628)
(5,375) Capital expenditure less disposal proceeds (713) (2,200)
(5,082) Acquisition: Purchase of new undertakings (806) (4,992)
(6,752) Equity dividends paid (4,047) (3,705)
18,553 Net cash inflow before financing 9,554 2,066
Financing
Issue of new share capital/(Purchase of own
shares )
(685) 568 (747)
(14,268) (Decrease) in debt (14,725) (502)
(14,953) (14,157) (1,249)
3,600 (Decrease)/Increase in cash (4,603) 817
Reconciliation of net cash flow to movement in
net debt
3,600 (Decrease)/Increase in cash above (4,603) 817
14,268 Decrease in debt above 14,725 502
(22) Finance leases acquired with new undertakings 0 (22)
(207) Debt acquired with new undertakings 0 (207)
(849) New finance leases (423) (614)
16,790 Change in net debt 9,699 476
(80,005) Net debt at beginning of period (63,215) (80,005)
(63,215) Net debt at end of period (53,516) (79,529)
Notes to the Interim Report
For the HALF YEAR ENDED 31 OCTOBER 2003
Twelve Six Six
Months to Months to Months to
30 April 2003 31 October 2003 31 October 2002
Audited Unaudited Unaudited
Euro'000 Euro'000 Euro'000
Turnover
314,522 Heiton Trade 173,115 159,779
85,317 Heiton Retail 46,711 42,347
399,839 Total Ireland 219,826 202,126
79,238 Heiton UK 35,695 43,324
479,077 Total 255,521 245,450
Reconciliation of movements in Shareholders' Funds
5,909 Profit for the financial period after taxation 14,286 9,747
(7,085) Dividends (3,476) (3,049)
(1,176) 10,810 6,698
(685) Issue of new share capital/(purchase of own shares) 568 (747)
Currency translation adjustment on foreign currency
(390) net investment (272) (20)
(2,251) Net addition to/(reduction in) shareholders' funds 11,106 5,931
139,819 Shareholders' funds at beginning of period 137,568 139,819
137,568 Shareholders' funds at end of period 148,674 145,750
Reconciliation of operating profit to net cash
inflow from operating activities
14,206 Operating profit 17,075 14,319
0 Exceptional property gain 1,694 0
8,611 Exceptional goodwill write-off 0 0
1,218 Exceptional write-down of tangible fixed assets 0 0
11,330 Depreciation & amortisation 5,215 5,558
(304) Profit on disposal of tangible fixed assets (2,437) (527)
35,061 Cash inflow from trading 21,547 19,350
1,535 Stocks 1,268 (477)
(1,609) Debtors (7,820) (7,357)
11,101 Creditors 4,629 7,707
11,027 Cash (outflow)/inflow from working capital (1,923) (127)
46,088 Net cash inflow from operating activities 19,624 19,223
Ordinary Shares
Interim Dividend: 7.0c gross per share, subject to dividend
withholding tax, if appropriate
Dividend payment date: 11 March 2004
Ex Dividend date: 21 January 2004
Record date: 23 January 2004
6% Cumulative Preference Shares
Interim Dividend: 3.81c gross per share, subject to dividend
withholding tax, if appropriate
Dividend payment date: 1 April 2004
Ex Dividend date: 21 January 2004
Record date: 23 January 2004
This information is provided by RNS
The company news service from the London Stock Exchange
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