Interim Results
23 October 2003 - 5:01PM
UK Regulatory
RNS Number:2140R
Shiloh PLC
23 October 2003
SHILOH PLC
Interim Results for the Six Months ended 30th September 2003
Shiloh PLC, the Oldham based healthcare company, announces interim results
for the six months ended 30 September 2003.
Interim Interim
2003 2002
Turnover #22.57 m #19.0m
Operating Profit #0.1m #0.4m
Profit (Loss) before tax (#0.2m) #0.2m
Earnings per share (2.31p) 1.54p
Interim dividend 1.5p 1.5p
The benefits from continued sales growth of 3% have been offset by increased
costs and the unfavourable movement in exchange rates.
The Sterilisation Services division has performed well and there are good
prospects of this business expanding as a result of the National Health
Service's five year programme for upgrading sterilisation services.
The Medical division has been most affected by the unfavourable impact of
currency. The division has improved its gross margin and the new products
introduced last year are selling well.
The Active Care division has made a loss and the re-organisation of the division
into one entity is taking longer than expected. The division will benefit from
the common branding of products and the launch of a new mail order catalogue.
Shiloh is currently reviewing its cost base and has identified significant cost
savings that can be taken out of the business in the second half year.
Commenting on the future, Edmund Gartside, Chairman, said:
'Although the full year performance will not meet current market expectations,
the scene is set for a recovery in profit during the second half year as new
products move in greater volume and we consolidate on our excellent reputation
with the National Health Service.'
Ends
For further information please contact
Shiloh PLC
Edmund Gartside, Chairman, (direct line 0161 785 3492) 0161 624 8161
Graham Collyer, Chief Executive (direct line 0161 785 3400)
Weber Shandwick Square Mile
Louise Robson 0207 067 0700
City Press PR
David Tattersall 01704 226370
Chairman's Statement
The first half of the year has proved to be more difficult than expected with
the benefits from our continuing growth in sales being offset by increased costs
and an unfavourable exchange rate.
Whilst sales were #22.58 million (2002: #21.89 million), an increase of 3%,
operating profit before tax, interest and amortisation of goodwill was #110,000
(2002:#392,000). The loss before tax was #175,000 (2002: #200,000 profit).
A major factor has been the weakening of sterling against the euro, which has
adversely affected profit by #254,000. In addition we have had to absorb some
significant cost increases, most notably a 36% rise in insurance costs, the
increase in national insurance contributions, and additional overhead costs
incurred as part of our strategy to expand the Group into new markets. These
cost increases have had a severe impact on our Medical and Active Care
divisions, both of which have under-performed during the half year.
The Sterilisation Services division, which provides sterilisation services to
local hospitals, located at Bellshill, near Glasgow, has made good progress and
is now operating profitably. The National Health Service has revealed its long
awaited proposals for the upgrading of sterilisation units in England and we are
hopeful of securing further contracts which will enable us to commission
additional units as this five year programme unfolds.
The Medical division has been the most affected by the unfavourable impact of
currency. However, there have been some positive developments. Most notably,
gross margin in this division has increased from 29.8% to 31% as a result of
switching to higher margin business.
We have had an encouraging response to the new products launched last year, but
they are not yet selling in sufficient volume to cover the increase in overhead
costs incurred to establish and support their development. The Comfi range of
tubular bandages has performed well and we have already gained a 10% share of
the market in the NHS acute sector. The Clinisan brand of emollient cleansing
foam, which we acquired in February 2003, is now fully integrated into our
product portfolio and is also performing well.
Sales in our traditional wipes and continence pads remain strong and I am
pleased to report that the NHS has renewed our wipes contract for a further four
years. We continue to operate a Home Delivery Service to over twenty Health
Authorities. However, the cost of servicing these Home Delivery contracts is
high, and we are currently reviewing our strategy with regard to this activity.
The Active Care division has made a loss and the integration of the four
original businesses acquired into one division has taken longer than expected.
Two outlets have been closed during the half year and further rationalisation is
planned. Common branding is being introduced and a new mail order catalogue,
launched in September, should boost sales to the private sector, the part of the
division that has under-performed.
The first of two mill property sales was completed in August 2003. The net
proceeds were #656,000 and there was a book loss of #44,000, which is the
exceptional loss shown in the profit and loss account. Contracts have now been
exchanged for the sale of the second mill following receipt of planning approval
for residential development. We expect to complete this within the next few
weeks and realise a book profit of #200,000.
We are currently reviewing all our costs in an effort to reduce the cost base to
bring it more into line with sales volume. We have already identified
significant cost savings and these will start to take effect in the second half
year. We believe that our excellent record of sales growth should ultimately be
reflected in profits. Our priority is to make the business profitable enough to
create a sound base for future expansion both through organic growth and through
the acquisition of complementary businesses.
Although the turn round will take time and the full year performance will not
meet current market expectations, the scene is set for a recovery in profit
during the second half year as new products move in greater volume and we
consolidate on our excellent reputation with the National Health Service.
Accordingly the Directors have declared an unchanged interim dividend of 1.5p
per share in anticipation of a better trading performance in the second half
year. This will be paid on 28th November 2003 to those shareholders on the
register on 14th November 2003.
Edmund T. Gartside
22nd October 2003
Consolidated Profit and Loss Account
Half-year to Half-year to Year ended
30 Sept 03 30 Sept 02 31 March
03
#000's unaudited unaudited audited
TURNOVER 22,575 21,886 45,441
OPERATING (LOSS)/PROFIT
Continuing operations 110 392 835
Amortisation of goodwill (142) (127) (223)
(32) 265 612
NON OPERATING EXCEPTIONAL ITEMS
Loss on sale of property (44) - -
(76) 265 612
Net interest payable (99) (65) (122)
(LOSS)/PROFIT BEFORE TAXATION (175) 200 490
Taxation 20 (98) (182)
(LOSS)/PROFIT AFTER TAXATION (155) 102 308
Dividends (100) (100) (358)
RETAINED (LOSS)/PROFIT (255) 2 (50)
EARNINGS PER SHARE BEFORE AMORTISATION OF GOODWILL
AND EXCEPTIONAL ITEMS
Basic 0.27p 3.44p 12.13p
(LOSS)/EARNINGS PER SHARE
Basic (2.31p) 1.54p 4.62p
Diluted (2.28p) 1.51p 4.55p
ORDINARY DIVIDEND PER SHARE 1.5p 1.5p 5.35p
Notes:
(1) The financial information set out above does not constitute full accounts
within the meaning of
section 254 of the Companies Act 1985. The unqualified audited accounts for
the year ended
31st March 2003 have been filed with the Registrar of
Companies.
(2) Taxation has been provided at an estimated rate of 30% (30%
last year).
Consolidated Balance Sheet
30 Sept 03 30 Sept 02 31 March
03
#000's unaudited unaudited audited
FIXED ASSETS
Intangible assets 5,251 4,782 5,393
Tangible assets 4,580 6,143 5,509
9,831 10,925 10,902
CURRENT ASSETS
Stocks 5,797 5,043 5,754
Assets held for resale 776 - 776
Debtors 8,506 8,617 7,842
Short term deposits - 450 450
Cash at bank and in hand - - 297
15,079 14,110 15,119
CREDITORS-falling due within one year 11,589 11,423 11,847
NET CURRENT ASSETS 3,490 2,687 3,272
TOTAL ASSETS LESS CURRENT LIABILITIES 13,321 13,612 14,174
CREDITORS-falling due after more than one year 998 913 1,592
PROVISION FOR LIABILITIES AND CHARGES 294 210 294
DEFERRED CREDITOR 107 114 111
11,922 12,375 12,177
CAPITAL AND RESERVES
Called up share capital 1,672 1,671 1,672
Share premium account 1,273 1,270 1,273
Capital redemption reserve 62 62 62
Revaluation reserve 761 959 802
Profit and loss account 8,154 8,413 8,368
EQUITY SHAREHOLDERS' FUNDS 11,922 12,375 12,177
Consolidated Cash Flow Statement
Half-year to Half-year to Year ended
30 Sept 03 30 Sept 02 31 March
03
#000's unaudited unaudited audited
NET CASH FLOW FROM OPERATING ACTIVITIES
Operating (loss)/profit (32) 265 612
Depreciation 449 389 878
Movement in working capital and other adjustments (1,887) (1,292) (58)
(1,470) (638) 1,432
RETURNS ON INVESTMENTS AND SERVICING
OF FINANCE (164) (17) (118)
TAXATION - (18) (299)
CAPITAL EXPENDITURE
Net cost of plant and machinery (181) (913) (1,901)
Disposal of property 656 - -
ACQUISITION ACTIVITY (100) (506) (460)
EQUITY DIVIDENDS PAID (257) (244) (345)
MANAGEMENT OF LIQUID RESOURCES 450 - -
FINANCING (133) (80) (162)
DECREASE IN CASH (1,199) (2,416) (1,853)
Analysis of debt
Cash at bank and in hand - - 297
Bank overdraft (3,153) (2,517) (2,251)
Debt due within one year - (450) -
Finance leases (747) (512) (838)
Short term deposits - 450 450
(3,900) (3,029) (2,342)
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