RNS Number:2340I
Sinclair (William) Holdings PLC
04 March 2003


For Immediate Release                                               4 March 2003


                         WILLIAM SINCLAIR HOLDINGS plc

                 INTERIM RESULTS FOR THE SIX MONTH PERIOD ENDED

                                31 DECEMBER 2002


                                                                6 months ended

                                                  31 December 2002         31 December 2001

Sales                                                     #19.648m                 #23.804m

Profit before exceptional items and taxation               #0.428m                  #0.237m

Earnings per share before exceptional items                   1.3p                     0.7p

Earnings per share                                          (51.7)p                   (0.9)p

Dividend per share                                            1.5p                     2.4p

Performance of the Group for the first six months was in line with the Board's
expectations. On 15 November 2002 the disposal of the business and assets of
Sinclair Animal and Household Care Limited ("SAHC") and certain freehold
properties ("the Disposal") was completed. The Group is now focused on it's
horticultural business and today also announces the acquisition of 50 per cent
of Freeland Horticulture Limited ("Freeland"), a company specialising in the
sourcing and supply of green waste for use in the horticultural and landscape
markets.

As previously reported, the Boothby factory in Cumbria was extensively damaged
by fire in August of last year. The facility has been rebuilt and went into full
production on 6 January 2003. The fire is the subject of an on-going insurance
claim. Discussions with our insurers and their loss adjustors have progressed
satisfactorily and the results for the period include an estimate of the
exceptional profit arising from the insurance proceeds being in excess of the
book value of the assets damaged by the fire.

On turnover of #19.6m (2001: #23.8m), profits after interest but before
exceptional items and taxation were ahead of the same period in the previous
year at #0.4m (2001: #0.2m). The current period includes the results of SAHC
prior to the Disposal. The continuing Group, excluding the pet division,
reported a loss after interest but before exceptional items of #0.5m (2001: loss
#0.8m).

The exceptional charges for the period total #12.1m. This figure includes #11.4m
which relates to the goodwill write-back arising from the Disposal which was
previously written off to reserves and which does not reduce shareholders'
funds. A loss of #1.9m arose from the Disposal. This was partially offset by a
profit of #0.3m from the sale of properties previously occupied by the pet
businesses. A profit of #0.9m arises on the assets replaced as part of the
insurance claim referred to above.

The continued emphasis on working capital management has resulted, prior to
taking account of the cash impact of the Disposal and the cessation of the pet
division's operations at Oldbury, which was announced in April of last year, in
an underlying reduction in borrowings of #2.5m.

Earnings per share, before exceptional items, were 1.3p compared to 0.7p in the
same period of the previous year. After exceptional items the loss per share was
51.7p (2001: 0.9p loss).

Full implementation of Financial Reporting Standard No. 17 ("FRS17") was
intended to be mandatory for companies with accounting periods ending on or
after 23 June 2002. However, full implementation has been deferred until after
the issue of an International Financial Reporting Standard on the same subject,
which is expected by 2005. Although not currently recognised in the balance
sheet of the Group, the FRS17 deficit of the fair value of assets against the
present value of the liabilities for the defined benefit element of the Group's
pension scheme has risen from the #5.0m as stated in the Group's last Annual
Report and Accounts, to approximately #7.1m at the end of December 2002. During
the period the market value of the assets has fallen by #1.3m and the
liabilities have increased as members approach retirement.

The defined benefit element of the scheme has been closed to new entrants since
1996. At the last actuarial valuation dated 6 April 2001, the actuarial value of
the assets represented 106% of the benefits which had accrued to members. Whilst
the triennial actuarial valuation is not due until April 2004, the Board has
decided to undertake an interim funding review.

In the last Annual Report and Accounts the Group emphasised the highly seasonal
nature of its business and that future interim dividends would more closely
reflect the lower trading performance in the first half of the year. As a result
the Board is recommending an interim dividend of 1.5p per share (2001: 2.4p).

Pet Division

At the time of announcing the consolidation of the pet division in April of last
year the costs were expected to be no more than #2m. The accounts to 30 June
2002 included a provision of #1.5m relating to the expenditure committed at that
stage to the closure of the Oldbury and Bradford sites. I am pleased to report
that the actual costs have been contained within the provision made in those
accounts.

The Disposal was completed on 15 November 2002. The consideration received for
the Disposal was #6.4m, of which #0.3m is deferred until 15 May 2003. In
accordance with the requirements of the sale and purchase agreement, #0.9m of
excess cash that was held by SAHC at completion, the majority of which arose due
to lower than anticipated capital employed and hence net assets, was returned to
the purchaser. The costs associated with the transaction, including those
relating to management changes, amounted to #1.0m. The net assets of the
Disposal at completion were #6.4m. The loss on the Disposal was #1.9m.

In addition three properties that were retained within the Group and had
previously been occupied by the pet businesses, including those at Oldbury and
Bradford, were sold for a total consideration of #2.2m, realising a profit on
disposal of #0.3m.

The overall costs associated with our withdrawal from the pet market were in
line with our expectations.

Following the Disposal and as stated in the Circular announcing the Disposal,
sent to shareholders on 25 September 2002, Roger Feaviour resigned as Chief
Executive with effect from 31 December 2002. I am pleased that he will continue
to contribute to the future of the Group in his role of non-executive Director.

Trading Review - Horticulture Division

At a customer level the division continued during the first half year to
strengthen its market position. During the period we launched the range of J
Arthur Bowers peat reduced compost, replacing the previous all peat range. These
have been well received in the market place and we are the first major UK
business to take such steps to conserve its peat resources.

Operationally the division had a difficult period following the fire at Boothby
and the reduced availability of UK harvested peat arising from the wet weather
experienced last Summer. Customer service levels were maintained following the
fire by running additional shifts at the main Lincoln site and by way of
external sub-contracting. The lower levels of UK harvested peat will be
supplemented by product imported from our own operations in Estonia and other
overseas suppliers.

As we have previously stated, English Nature has indicated that certain parts of
the Bolton Fell peat site may be submitted to the Department of Environment,
Food and Rural Affairs as a candidate Special Area of Conservation. We still
await formal clarification of their position.

Following a complete review of the landscape market, and our position within the
supply chain, we have withdrawn from direct supply of bark to that market. Our
bark resources will now be concentrated on satisfying our internal requirements
for the environmentally friendly and other product ranges.

Overall sales for the division were in line with the same period of the previous
year with strong performances from the retail and export markets offsetting
continued weaknesses in overall demand from professional customers and the
reduction in sales following the withdrawal from direct supply to the landscape
bark market. Increased margins were achieved in both the retail and professional
sectors and were sufficient to offset the lower margins from the export and bark
products markets. The wet weather experienced in the UK during the summer months
of last year resulted in a lower than expected peat harvest which adversely
affected the results for the period. Overall the division reported break-even
for the period compared to an operating loss, before exceptional items, of #0.1m
in the same period the previous year.

During the period and in preparation for the gardening season, the division has
strengthened its product listings in major retail and garden centre outlets.

Acquisition of 50 per cent of Freeland

The Group has today acquired 50 per cent of the share capital of Freeland for a
total cash consideration of #1.2m. Freeland specialises in the sourcing and
supply of composted green waste to both the horticultural and landscape markets.

#0.6m of the total consideration of #1.2m was paid at completion with the
balance being payable on 31 August 2003. The Group has an option to acquire the
remaining 50 per cent of Freeland's share capital between 1 January 2008 and 31
December 2010 at a price based on a multiple of five times 50 per cent of the
average of the post tax profits, subject to certain adjustments, of Freeland as
shown by the audited statutory accounts for the two financial years ending
immediately prior to the date the option is exercised.

A trading relationship currently exists between Freeland and the Group relating
to green waste, a product supplied to the horticultural market. This is
purchased from Freeland and is used in a range of peat reduced products
(alongside peat) thereby conserving our finite peat resource for products where
no alternative to peat currently exists. This trading relationship will be
strengthened following the acquisition.

Freeland commenced trading in October 2000 and in the year to 30 June 2002
reported a profit before taxation of #0.1m on turnover of #1.1m. The Managing
Director, and founder, of Freeland is being retained under the terms of a
long-term service agreement.

The cash being used to fund the acquisition is being generated from current year
cash flow and working capital improvements.

The acquisition is expected to be earnings neutral during the current financial
year, after goodwill amortisation, and earnings enhancing thereafter.

The Future

Following our withdrawal from the pet market the Group is now focussed on
further developing its horticulture business. In addition, the Group has
simplified its central structure which will reduce costs.

Particular focus is being given to address two issues fundamental to the future
performance of the Group. As stated in the last Annual Report and Accounts, we
have recognised brands with a strong presence in the market place. In order to
maximise the return from our market position we have embarked on a strategy of
product development aimed at widening the offering to our customers without
further impacting on our already high distribution costs. Addressing the impact
of transport and distribution costs, which are aggravated by the bulky nature of
many of our products, continues to be a major challenge which faces the
business, and we continue to seek ways of minimising these ever increasing
costs.

The Board's current dividend policy reflects existing levels of profitability
and any increase will be linked to an improved trading performance

Peter Barton
Chairman
4 March 2003


Consolidated Profit and Loss Account
for the six months ended 31 December 2002 (unaudited)
                                                                                           Six months ended 
                                                                                           31 December 2002 
                                                                              Before
                                                                         Exceptional          Exceptional           
                                                                               items                Items       Total
                                                                                #000                 #000        #000 
                                                                                                                 
  Turnover - continuing operations                                            13,572                    -      13,572 

  - discontinued operations                                                    6,076                    -       6,076 

                                                                              19,648                    -      19,648 
  Operating profit / (loss)- continuing operations 
                                                                   
  Horticultural division                                                          14                    -          14 

  Central costs                                                                (405)                    -       (405) 

                                                                               (391)                    -       (391) 

  - discontinued operations                                                      915                    -         915 

                                                                                 524                    -         524 

  Loss on disposal of discontinued businesses                                      -              (1,883)     (1,883) 

  Profit on sale of properties relating to discontinued                            -                  305         305 
  businesses      
                                                                                                    
                                                                                   -              (1,578)     (1,578) 
  Goodwill writeback on disposal of discontinued                                   -             (11,450)    (11,450) 
  businesses                                      
                                                                    
  Profit arising on assets replaced as part of the                                 -                  900         900 
  insurance claim                                                                                        
             
  Profit / (loss) on ordinary activities before interest                         524             (12,128)    (11,604) 

  Net Interest payable                                                          (96)                    -        (96) 

  Profit / (loss) on ordinary activities before taxation                         428             (12,128)    (11,700) 

  Taxation on profit / (loss) on ordinary activities                           (128)                  128           - 

  Profit / (loss) for the period                                                 300             (12,000)    (11,700) 

  Dividends                                                                    (340)                    -       (340) 

  Retained (loss) for the period                                                (40)             (12,000)    (12,040) 

  Basic earnings / (loss) per share                                             1.3p              (53.0)p     (51.7)p 

  Dividends per share                                                                                            1.5p 

 
Consolidated Profit and Loss Account  
for the six months ended 31 December 2001 (unaudited) 

                                                                                           Six months ended 
                                                                                           31 December 2001 
                                                                               Before
                                                                          Exceptional          Exceptional           
                                                                                items                Items      Total
                                                                                 #000                 #000       #000 

  Turnover- continuing operations                                              13,677                    -     13,677 

  - discontinued operations                                                    10,127                    -     10,127 

                                                                               23,804                    -     23,804 

  Operating profit / (loss)- continuing operations      
                                                              
  Horticultural division                                                         (91)                (514)      (605) 

  Central costs                                                                 (457)                    -      (457) 

                                                                                (548)                (514)    (1,062) 

  - discontinued operations                                                     1,065                    -      1,065 

  Profit / (loss) on ordinary activities before interest                          517                (514)          3 

  Net Interest payable                                                          (280)                    -      (280) 

  Profit / (loss) on ordinary activities before taxation                          237                (514)      (277) 

  Taxation on profit / (loss) on ordinary activities                             (71)                  154         83 

  Profit / (loss) for the period                                                  166                (360)      (194) 

  Dividends                                                                     (544)                    -      (544) 

  Retained (loss) for the period                                                (378)                (360)      (738) 

  Basic earnings / (loss) per share                                              0.7p               (1.6)p     (0.9)p 

  Dividends per share                                                                                            2.4p 

 
Consolidated Profit and Loss Account  
for the year ended 30 June 2002 (unaudited) 

                                                                                                                      
                                                                                                Year ended  
                                                                                                30 June 2002 
                                                                               Before
                                                                          Exceptional          Exceptional           
                                                                                items                Items      Total
                                                                                 #000                 #000       #000 

  Turnover - continuing operations                                             43,648                    -     43,648 

  - discontinued operations                                                    19,837                    -     19,837 

                                                                               63,485                    -     63,485 

  Operating profit / (loss)- continuing operations   
                                                                 
  Horticultural division                                                        3,046                (566)      2,480 

  Central costs                                                               (1,063)                 (21)    (1,084) 

                                                                                1,983                (587)      1,396 

  - discontinued operations                                                     1,880                (978)        902 

                                                                                3,863              (1,565)      2,298 

  Loss on closure of discontinued operations                                        -              (1,549)    (1,549) 

  Goodwill writeback on closure of discontinued                                     -              (6,300)    (6,300) 
  operations                                                                                                   
       
  Profit / (loss) on ordinary activities before interest                        3,863              (9,414)    (5,551) 

  Net Interest payable                                                          (579)                    -      (579) 

  Profit / (loss) on ordinary activities before taxation                        3,284              (9,414)    (6,130) 

  Taxation on profit / (loss) on ordinary activities                            (967)                  911       (56) 

  Profit / (loss) for the period                                                2,317              (8,503)    (6,186) 

  Dividends                                                                   (1,359)                    -    (1,359) 

  Retained profit / (loss) for the period                                         958              (8,503)    (7,545) 

  Basic earnings / (loss) per share                                             10.2p              (37.5)p    (27.3)p 

  Dividends per share                                                                                            6.0p 


Statement of total recognised gains and losses  
for the six months ended 31 December 2002 (unaudited) 

                                                                                                                      
                                                   Six months                   Six months                 Year ended  
                                                     ended 31                     ended 31                    30 June
                                                     December                     December                       2002
                                                         2002                         2001                       
                                                        #'000                        #'000                      #'000 

  (Loss) for the period                              (11,700)                        (194)                    (6,186) 

  Unrealised deficit on                                     -                            -                    (1,060) 
  revaluation of properties    
                                                                                       
                                                     (11,700)                        (194)                    (7,246) 

Reconciliation of movements in shareholders funds  
for the six months ended 31 December 2002 (unaudited) 

                                                                                                                      
                                                   Six months                   Six months                 Year ended  
                                                     ended 31                     ended 31                    30 June
                                                     December                     December                       2002
                                                         2002                         2001                       
                                                        #'000                        #'000                      #'000 

  Retained (loss) for the period                      (12,040)                       (738)                    (7,545)
 
  Unrealised deficit on                                      -                           -                    (1,060) 
  revaluation of properties    
                                                                                       
  Goodwill write-back                                   11,450                           -                      6,300 

  Opening shareholders funds                            20,222                      22,527                     22,527 

  Closing shareholders funds                            19,632                      21,789                     20,222 
 
 
Consolidated Balance Sheet  
as at 31 December 2002 (unaudited) 

                                                                                                               
                                                                        31 December    31 December     30 June  
                                                                               2002           2001        2002 
                                                                              #'000          #'000       #'000 
          Fixed assets  
                                                                                       
          Tangible assets                                                    10,197         17,648      13,067 

          Investments                                                           221            203         221 

                                                                             10,418         17,851      13,288 

          Current assets            
                                                                           
          Properties held for resale                                            776            996       2,621 

          Stocks                                                              8,273         12,307       7,514 

          Debtors                                                             9,711         13,432      12,778 

          Cash at bank and in hand                                               47            389       4,153 

                                                                             18,807         27,124      27,066 

          Creditors : amounts falling due within one year   
                                                   
          Borrowings                                                          (564)        (9,473)     (3,603) 

          Other creditors                                                   (7,965)       (11,369)    (14,634) 

                                                                            (8,529)       (20,842)    (18,237) 

          Net current assets                                                 10,278          6,282       8,829 

          Total assets less current liabilities                              20,696         24,133      22,117 

          Creditors : amounts falling due after more than one year             (20)          (712)       (126) 

          Provisions for liabilities and charges                            (1,044)        (1,632)     (1,769) 

          Net assets                                                         19,632         21,789      20,222 

          Capital and reserves    
                                                                             
          Called up share capital                                             5,662          5,662       5,662 

          Reserves                                                            1,950          7,993       6,818 

          Profit and loss account                                            12,020          8,134       7,742 

          Equity shareholders' funds                                         19,632         21,789      20,222 
 
 
Consolidated cash flow statement  
for the six months ended 31 December 2002 (unaudited)  

                                                   Six months                   Six months                 Year ended  
                                                     ended 31                     ended 31                    30 June
                                                     December                     December                       2002
                                                         2002                         2001                       
                                                        #'000                        #'000                      #'000 

  Net cash flow from operating                        (5,447)                      (2,104)                      9,789 
  activities    
                                                                                                      
  Returns on investments and                            (177)                        (374)                      (674) 
  servicing of finance  
                                                                                              
  Taxation                                              (187)                          168                      (202) 

  Capital expenditure and                               1,052                        (926)                    (1,385) 
  financial investment    
                                                                                            
  Sale of discontinued                                  4,613                            -                          - 
  operations            
                                                                                              
  Equity dividends paid                                 (815)                        (815)                    (1,359) 

  Cash (outflow) / inflow before                        (961)                      (4,051)                      6,169 
  financing                
                                                                                           
  Net cash flow from financing                        (3,204)                        (391)                      (620) 

  (Decrease) / increase in cash                       (4,165)                      (4,442)                      5,549 
  in the period                                                                                                       
 
Reconciliation of net cash flow to movement in net debt 
 

                                                                                                 
  Decrease) / increase in cash                        (4,165)                      (4,442)                     5,549 

  Cash outflow from change in debt                      3,204                          391                       620 

  Movement in net debt in the period                    (961)                      (4,051)                     6,169 

  Net funds/(debt) at 1 July 2002                         424                      (5,745)                   (5,745) 

  Net (debt) / funds at 31 December 2002                (537)                      (9,796)                       424 

 
Cash flow from operating activities 

                                                                                                                      
                                                   Six months                   Six months                 Year ended  
                                                     ended 31                     ended 31                    30 June
                                                     December                     December                       2002
                                                         2002                         2001                       
                                                        #'000                        #'000                      #'000 

  Operating profit                                         524                            3                     2,298 

  Depreciation                                             784                        1,000                     2,050 

  (Profit) on disposal of fixed                              -                          (5)                       (6) 
  assets                                                         
                                                     
  (Increase)/ decrease in stocks                       (2,849)                      (3,284)                     1,231 

  Decrease in debtors                                      864                        4,344                     4,947 

  (Decrease) in creditors                              (4,079)                      (3,936)                   (1,352) 

  Movement in provisions                                 (577)                           10                     (300) 

  Adjustment to value of                                     -                            8                         - 
  properties held for resale                                               
                                           
  (Decrease) in amounts due to                            (95)                        (198)                      (14) 
  associated company                                                 
                                                 
  Share of profit of associated                           (19)                         (46)                      (23) 
  company                                                  
                                                           
  Revaluation adjustment                                     -                            -                       958 

                                                       (5,447)                      (2,104)                     9,789 
 
 
Capital expenditure and financial investment 

                                                                                                                      
                                                   Six months                   Six months                 Year ended  
                                                     ended 31                     ended 31                    30 June
                                                     December                     December                       2002
                                                         2002                         2001                       
                                                        #'000                        #'000                      #'000 

  Purchase of tangible fixed                          (2,979)                        (931)                    (1,813) 
  assets                    
                                                                                          
  Sale of tangible fixed assets                         1,878                            5                        428 

  Sale of properties held for                           2,153                            -                          - 
  resale                                                                    
                                          
                                                        1,052                        (926)                    (1,385) 
 
Financing 
                                                                                                                      
                                                   Six months                   Six months                 Year ended  
                                                     ended 31                     ended 31                    30 June
                                                     December                     December                       2002
                                                         2002                         2001                       
                                                        #'000                        #'000                      #'000 

  Repayment of bank loan                              (3,000)                            -                          - 

  Capital element of finance                            (204)                        (273)                      (540) 
  leases and hire purchase                                                                                            
  agreements     
                                                                                                     
  Repayment of commercial loans                             -                        (118)                      (120)
 
  New hire purchase funds                                   -                            -                         40 

                                                      (3,204)                        (391)                      (620) 
 
  
Notes to the Accounts 
Operating exceptional items 

                                                                                                                      
                                                   Six months                   Six months                 Year ended  
                                                     ended 31                     ended 31                    30 June
                                                     December                     December                       2002
                                                         2002                         2001                       
                                                        #'000                        #'000                      #'000 

  Provision in respect of worked                            -                        (246)                      (246) 
  out peat moss                     
                                                                                  
  Provision against old export                              -                        (268)                      (268) 
  debts                        
                                                                                       
  Property revaluation                                      -                            -                      (958) 

  Trading loss arising from                                 -                            -                       (93) 
  decision to close discontinued                                                                                      
  business     
                                                                                                       
                                                            -                        (514)                    (1,565) 

 2. Taxation

    The taxation charge on profit on ordinary activities before exceptional
    items is calculated by applying the Directors' best estimate of the annual
    taxation rate to the profit for the period. The taxation credit on
    exceptional items is the best estimate of the credit applicable to those
    items.

 3. Dividend

    The interim dividend of 1.5 pence per share will be paid on 6 May 2003 to
    those shareholders on the register on 22 April 2003.

 4. Earnings per share

    Earnings per share have been calculated by reference to 22,649,046 (2001:
    22,649,046) shares in issue.

 5. Basis of preparation of accounts

Other than the results for the full year to 30 June 2002, the financial
information included in the interim report is unaudited and has not been
reviewed in the context of Bulletin 1999/4 "Review of Interim Financial
Statements". The interim financial statements have been prepared on the basis of
the accounting policies set out in the financial statements for the year ended
30 June 2002. The financial statements for the year ended 30 June 2002 are
abridged. Full accounts for that year, on which the auditors of the Company
issued an unqualified audit report, have been delivered to the Registrar of
Companies.



Enquiries

Peter Barton                                          Tel: 01522 537561

Chairman

Steve Rowland                                         Tel: 01522 537561

Finance Director

Richard Welton                                        Tel: 0121 710 4503

Arbuthnot Securities Limited


                      This information is provided by RNS
            The company news service from the London Stock Exchange
END
IR SSWESDSDSEDD