RNS Number:9737I
Oystertec PLC
20 March 2003
20 March 2003
Oystertec Plc
Preliminary results for the twelve months ended 31st December 2002
Oystertec plc, the engineering Intellectual Property group, announces
preliminary results for twelve months ended 31 December 2002.
* Group turnover of #112,431,000 (2001: #6,621,000), with pre-tax profits
of #465,000 (2001: #11,265,000 loss) and earnings per share of 0.01p (2001:
8.21p loss)
* Operating profit before goodwill amortisation and exceptional items of the
divisions was #110,000 profit for IBP and #82,000 profit for Europower. The
prior year comparatives were respectively #5.5m loss and #0.8m loss (for
nine months), of which only #0.7m loss was accounted for in the group's
results to 31 December 2001, following the acquisition of IBP on 23 November
2001
* Head office costs before exceptional items and interest were #1,835,000
(2001: #2,364,000)
* Satisfactory progress in licence discussions and launch of new technology
* The Board remains confident of achieving market expectations for 2003.
While sales in January and February were disappointing, they were offset by
higher margins
Commenting on the results, Angus Monro, Executive Chairman said:
"Despite difficult trading conditions in our key markets, Oystertec is now a
profitable and cash generative group. Our restructuring programmes continue as
planned, which are focussed on driving out fixed costs and improving margins."
"Our Oyster Converter was successfully launched last year, with sales in line
with expectations and we have made considerable progress in the technical
development of our industrial and automotive products. This year we will launch
our new hydraulic technology and expect to generate revenues from automotive
fittings."
For further information please contact:
Angus Monro Tel: 020 7466 5000
Executive Chairman, Oystertec
Adrian Binney Tel: 020 7466 5000
Finance Director, Oystertec
Bobby Morse/Suzanne Dunne Tel: 020 7466 5000
Buchanan Communications
OYSTERTEC PLC
Preliminary results for the Year ended 31 December 2002
Divisional Results Summary Plumbing Industrial Total
12 Months 9 Months
#'000 #'000 #'000
Turnover 92,323 20,108 112,431
Operating profit before the following ("trading profit") 110 82 192
Profit on asset sales 119 0 119
Goodwill 3,529 (369) 3,160
Exceptional items (107) (631) (738)
Operating profit/(loss) before head office costs 3,651 (918) 2,733
Head office costs (1,835)
Group operating profit before interest 898
CHAIRMAN'S REVIEW
Good progress in 2002
Good progress has been made during 2002. I am pleased to report that trading
profits were delivered by our two operating Divisions as indicated above;
previously both were loss making.
I would like to emphasise the following:
* Strategically, the acquisition of Europower in March 2002
was very important to the group. It has enabled us to accelerate the development
of our range of industrial products. It is my view that the importance of
Europower to the group will grow significantly over the coming years.
* IBP has delivered a good trading performance, given
difficult market conditions. We continue to focus on taking cost out of the
business and improving the efficiency of our manufacturing facilities.
* The first Oystertec product has been successfully launched
with sales in line with expectations. Good progress has also been made in the
industrial division, in the development of Oyster hydraulic and automotive
fittings.
* After paying all restructuring costs, the group had
positive cash generation of #1.2m before financing the purchase of Europower.
Outlook
* Both businesses are trading in difficult international
markets. Sales for the first two months are below expectations, but we are
pleased to report that margins are continuing to improve. We are not expecting
sales in either division to match last year's levels and our strategy for the
year is focused on continuing to drive-out costs. Given no further deterioration
of market conditions, we remain confident that we will achieve our expectations
for 2003.
* We will continue to drive the Oystertec product
development programme, with the focus on achieving international licence deals.
FINANCIAL REVIEW
Results
* The unaudited results include the first full year of IBP
and the results of Europower for the nine months following its acquisition in
March 2003.
* Operating profit before goodwill amortisation and
exceptional items of the divisions was #110,000 for IBP (2001: #738,000 loss)
and #82,000 profit for Europower (2001: #nil). Head office costs before
exceptional items and interest were #1,835,000 (2001: #2,364,000).
* Exceptional costs charged to profit and loss account
totalling #738,000 were all headcount reduction related, mostly by Europower at
the Market Weighton head office. See the cashflow section below for comments on
the provisions for restructuring as at 31 December 2001.
* Net interest costs were #433,000 during the year (2001:
#121,000 net interest receivable), reflecting the banking facilities taken on
with the purchase of Europower and financing rationalisation programmes.
* The charge to taxation of #427,000 (2001: #9,000 credit)
mainly relates to profits in Spain (IBP) and South Africa (Europower). The group
has tax losses available for relief against future profits, particularly in the
UK, France, Germany and the USA.
Cashflow
* #6.9m positive cashflow was generated by IBP, before
paying rationalisation costs of #5.6m, being those provided for prior to 31
December 2001. This generation came from stock and debtor reductions, plus the
sale of properties.
* Europower also had positive cashflow of #1.1m, before
paying the exceptional charges of #0.6m, being generated mainly from stock
reductions.
* Debt of #6.6m was taken over on the purchase of Europower
and #2.3m of cash resources was used to purchase Europower and cover the costs
of acquisition.
* Net debt at 31 December 2002 was #6.7m (2001: net cash of
#0.3m), including #2.7m due on the original purchase of intellectual property.
This increase was entirely due to the Europower acquisition and the actual cash
generation in the year after financing head office charges was #1.2m.
Oystertec Plc
Unaudited Consolidated Profit and Loss Account for the year ended 31 December
2002
Year ended
Year ended 31 December 2002 31 December
Note Continuing Acquisition Total 2001
#'000 #'000 #'000 #'000
Turnover 1 92,323 20,108 112,431 6,621
Cost of sales - recurring (73,467) (15,693) (89,160) (5,427)
Cost of sales - exceptional - - - (4,150)
Cost of sales - goodwill 3,529 (369) 3,160 275
Gross profit/(loss) 22,385 4,046 26,431 (2,681)
Distribution (9,405) (1,557) (10,962) (966)
Administration - recurring (11,142) (2,776) (13,918) (3,330)
Administration - exceptional (107) (631) (738) (4,409)
Operating profit/(loss) 1 1,731 (918) 813 (11,386)
Profit on disposal of fixed assets 119 - 119 -
Loss on disposal of subsidiary (34) - (34) -
Profit/(loss) on ordinary activities
before interest and taxation 1,816 (918) 898 (11,386)
Interest - receivable 182 1 183 155
- payable (455) (161) (616) (34)
Profit/(loss) on ordinary activities
before taxation 1 1,543 (1,078) 465 (11,265)
Taxation (363) (64) (427) 9
Profit/(loss) on ordinary
activities after taxation 1,180 (1,142) 38 (11,256)
Profit/(loss) attributable to
minority
interests - equity (18) 20
Profit/(loss) attributable to
ordinary shareholders and
retained for the year 20 (11,236)
Earnings per share (p) 0.01 (8.21)
Diluted earnings per share (p) 0.01 -
Oystertec Plc
Unaudited Consolidated Balance Sheet at 31 December 2002
31 December
Notes 31 December 2002 2001
#'000 #'000 #'000
Fixed assets
Intangible assets, positive goodwill 2(a) 6,312 -
Intangible assets, negative goodwill 2(a) (11,350) (15,249)
(5,038) (15,249)
Intangible assets, other 2(b) 3,403 3,000
Tangible assets 3 21,117 24,894
Investments - joint venture gross assets 6,152 -
- joint venture gross (1,025) -
liabilities
5,127 -
- other 44 -
5,171 -
24,653 12,645
Current assets
Stocks 21,420 18,555
Assets held for resale 255 1,859
Pension debtor due within one year 552 824
Pension debtor due after one year 4,336 4,533
Other debtors 21,498 18,820
Cash held at bank and in hand 6,811 5,635
54,872 50,226
Creditors: amounts falling due within one year
Bank loans and overdrafts (6,597) (1,474)
Loan notes (3,274) -
Other creditors (16,976) (13,085)
(26,847) (14,559)
Net current assets 28,025 35,667
Total assets less current liabilities 52,678 48,312
Creditors: due after more than one year
Due on the purchase of intellectual property (2,721) (2,866)
Bank loans (450) (1,023)
Other creditors (1,494) -
(4,665) (3,889)
Provisions
Rationalisation costs (6,010) (11,220)
Vacant properties (401) -
Pension liabilities (6,724) (5,536)
(13,135) (16,756)
Net assets 34,878 27,667
Capital and reserves
Share capital 125 107
Share premium account 46,894 36,184
Profit and loss account (12,141) (13,384)
Equity shareholders' funds 34,878 22,907
Minority interest - equity - 4,760
34,878 27,667
Oystertec Plc
Unaudited Consolidated Cash Flow Statement for the year ended 31 December 2002
Note Year ended Year ended
31 December 31 December
2002 2001
#'000 #'000
Net cash inflow/(outflow) from operating activities 5 3,004 (1,872)
Returns on investments and servicing of finance 5 (433) 121
Taxation paid (424) -
Capital expenditure and financial investment 5 (2,436) (583)
Acquisitions and disposals 5 (11,559) (27,836)
Net cash outflow before management of liquid resources and
financing (11,848) (30,170)
Management of liquid resources - increase in
short-term deposits (3,274) -
Financing 5 11,792 36,494
Increase/(decrease) in cash in the year (3,330) 6,324
Consolidated Reconciliation of Cash Flow to Movement in Net Debt for the year
ended 31 December 2002
Increase/(decrease) in cash in the year (3,330) 6,324
Cash inflow from increase in loans (2,696) (360)
Repayment of loans 1,415 -
Short term deposits 3,274 -
Repayment of finance leases and hire purchase contracts 72 -
Repayment of deferred consideration 145 134
Change in net debt resulting from cash flows (1,120) 6,098
Inception of deferred consideration - (3,000)
Finance leases acquired with acquisition (533) (4)
Inception of loan notes (3,274) -
Debt acquired with acquisition (3,388) (1,688)
Debt transferred on loss of control in joint venture 1,076 -
Foreign exchange differences 290 (30)
Other (16) -
Movement in net debt (6,965) 1,376
Net funds/(debt) at the beginning of the year 268 (1,108)
Net (debt)/funds at the end of the year (6,697) 268
Oystertec Plc
Unaudited Notes to the Preliminary Announcement for the year ended 31 December
2002
1. Analysis of Turnover and Profit/(Loss) After Taxation
Year ended 31 December 2002 Year ended
Continuing 31 December
operations Acquisition Total 2001
#'000 #'000 #'000 #'000
(a) Turnover analysis:
By origin:
UK 27,430 14,373 41,803 2,194
Europe 60,483 2,026 62,509 4,427
Rest of the world 4,410 3,709 8,119 -
92,323 20,108 112,431 6,621
By destination:
UK 20,921 7,366 28,287 1,689
Europe 67,252 6,586 73,838 4,613
Rest of the world 4,150 6,156 10,306 319
92,323 20,108 112,431 6,621
(b) Profit/(loss) analysis
Divisional profit/(loss) before goodwill and
exceptional items:
Plumbing 110 - 110 (738)
Industrial - 82 82 -
110 82 192 (738)
Head office costs (1,801) - (1,801) (2,872)
Goodwill 3,529 (369) 3,160 275
Exceptional operating costs (107) (631) (738) (8,051)
Operating profit/(loss) 1,731 (918) 813 (11,386)
Exceptional non-operating items 85 - 85 -
Net interest (payable)/receivable (273) (160) (433) 121
Profit/(loss) before tax 1,543 (1,078) 465 (11,265)
Analysis of operating profit/(loss):
UK 2,122 (736) 1,386 (9,103)
Europe (556) (73) (629) (2,283)
Rest of the world 165 (109) 56 -
1,731 (918) 813 (11,386)
Analysis of profit/(loss) before tax:
UK 2,119 (807) 1,312 (8,973)
Europe (552) (103) (655) (2,292)
Rest of the world (24) (168) (192) -
1,543 (1,078) 465 (11,265)
1. Analysis of Turnover and Profit/(Loss) After Taxation (continued)
(c) Net assets:
Plumbing - subsidiaries 18,587 - 18,587 26,005
- joint venture 5,127 - 5,127 -
Industrial - 11,993 11,993 -
Head office (829) - (829) 1,662
22,885 11,993 34,878 27,667
Analysed:
UK (2,067) 11,234 9,167 5,576
Europe 21,629 143 21,772 22,091
Rest of the world 3,323 616 3,939 -
22,885 11,993 34,878 27,667
2. Intangible Assets
Positive Negative
(a) Goodwill goodwill goodwill Total
#'000 #'000 #'000
Cost
At 1 January 2002 - (15,524) (15,524)
Additions (note 4) 6,681 - 6,681
Adjustments - 616 616
Loss of control in joint venture - (13) (13)
Exchange differences - (233) (233)
At 31 December 2002 6,681 (15,154) (8,473)
Amortisation
At 1 January 2002 - 275 275
Amortisation for the year (369) 3,529 3,160
At 31 December 2002 (369) 3,804 3,435
Net book value
At 31 December 2002 6,312 (11,350) (5,038)
At 31 December 2001 - (15,249) (15,249)
(b) Others Intellectual Development
property costs Total
#'000 #'000 #'000
Cost
At 1 January 2002 3,000 - 3,000
Additions - 403 403
At 31 December 2002 3,000 403 3,403
Amortisation
At 1 January 2002 - - -
Amortisation for the year - - -
At 31 December 2002 - - -
Net book value
At 31 December 2002 3,000 403 3,403
At 31 December 2001 3,000 - 3,000
3. Fixed Assets
Land and Plant and
buildings machinery Other Total
#'000 #'000 #'000 #'000
Cost
At 1 January 2002 7,839 15,765 1,553 25,157
Acquisitions 3,371 2,494 107 5,972
Loss of control in joint venture (1,794) (8,214) (590) (10,598)
Additions 235 2,526 218 2,979
Disposals (318) (215) (61) (594)
Reclassifications 92 (153) 29 (32)
Exchange differences 267 795 110 1,172
At 31 December 2002 9,692 12,998 1,366 24,056
Accumulated depreciation
At 1 January 2002 19 137 107 263
Loss of control in joint venture (32) (1,063) (195) (1,290)
Charge for the year 296 2,924 808 4,028
Disposals - (108) (20) (128)
Reclassifications - - (32) (32)
Exchange differences - 71 27 98
At 31 December 2002 283 1,961 695 2,939
Net book value
At 31 December 2002 9,409 11,037 671 21,117
At 31 December 2001 7,820 15,628 1,446 24,894
4. Analysis of the Acquisition of Europower Plc
Net assets at the date of Book Adjustments Fair value
acquisition (18 March 2002): value Revaluation Other to group
#'000 #'000 #'000 #'000
Goodwill 1,477 - (1,477) -
Tangible fixed assets 6,688 (735) 19 5,972
Stocks 8,205 - (2,104) 6,101
Debtors 6,489 - 152 6,641
Cash at bank and in hand 974 - - 974
Creditors due within one year (9,312) - 987 (8,325)
Creditors due after one year (3,425) - (291) (3,716)
Provisions (195) - (1,130) (1,325)
10,901 (735) (3,844) 6,322
Goodwill arising on acquisition (note 2 6,681
(a))
13,003
Discharged by:
Cash consideration 9,300
Issue of loan notes 3,274
Costs associated with the acquisition 429
13,003
5. Notes to the Cash Flow
Year ended Year ended
31 December 31 December
2002 2001
#'000 #'000
(a) Reconciliation of operating profit/(loss) to net cash flow from the
operating activities
Operating profit/(loss) 813 (11,386)
Depreciation and profits on sale of tangible fixed assets 4,018 409
Goodwill amortisation (net) (3,160) (275)
Decrease in stocks 2,362 65
Decrease in debtors 4,427 4,639
Increase/(decrease) in creditors 125 (3,258)
Increase/(decrease) in provisions (5,581) 7,934
Net cash inflow/(outflow) arising from operating activities 3,004 (1,872)
(b) Analysis of returns on investments and financial investments
Bank interest received 183 155
Bank interest paid (588) (34)
Finance lease interest paid (28) -
(433) 121
(c) Analysis of capital expenditure and financial investments
Payments to acquire tangible fixed assets (2,651) (772)
Payments to acquire intangible fixed assets (403) -
Receipts from sales of tangible fixed assets 618 189
(2,436) (583)
(d) Acquisitions and disposals
Consideration for acquisitions (including costs) (9,729) (30,269)
Additional costs incurred on acquisitions (204) -
Net (overdraft)/cash acquired (2,634) 2,433
Net cash disposed of on loss of control in subsidiary (474) -
Loan in respect of other investment (44) -
Cash consideration on disposal of subsidiaries, less costs incurred 1,526 -
(11,559) (27,836)
(e) Financing
Issue of ordinary shares 11,465 38,558
Costs of issuing ordinary shares (737) (2,290)
Increase in loan funding 2,696 360
Repayment of long term loans (1,415) -
Repayment of finance leases (72) -
Repayment of deferred consideration (145) (134)
11,792 36,494
5. Notes to the Cash Flow (continued)
(f) Analysis of net funds/(debt)
At 1 January Cash flows Acquisitions Exchange Other non At 31
2002 / transfers differences cash December
movements 2002
#'000 #'000 #'000 #'000 #'000 #'000
Cash at bank and in hand 5,635 (2,059) - (23) (16) 3,537
Bank overdrafts (449) (1,271) - 256 - (1,464)
Net cash/(overdrafts) 5,186 (3,330) - 233 (16) 2,073
Deposits guaranteeing loan
notes
- 3,274 - - - 3,274
Deferred consideration (2,866) 145 - - - (2,721)
Bank loans (2,048) (1,281) (2,312) 58 - (5,583)
Loan notes - - - - (3,274) (3,274)
Finance leases (4) 72 (533) (1) - (466)
Debt (4,918) 2,210 (2,845) 57 (3,274) (8,770)
Net funds/(debt) 268 (1,120) (2,845) 290 (3,290) (6,697)
The total movement in cash flows and acquisitions/transfers of (#3,965) above is analysed as follows:
#'000
Net debt (including net overdrafts) take up on the acquisition of Europower Plc (6,630)
Cash used to finance the acquisition of Europower Plc, before new equity finance (2,275)
Net debt transferred in respect of the joint venture 602
New deposits guaranteeing loan notes 3,274
Exchange differences (115)
Payments against rationalisation provisions (5,450)
Exceptional costs charged in the year (738)
Proceeds from the sale of properties and subsidiaries 1,820
True cash flow movements before exceptional and other payments above 5,547
(3,965)
(g) Effect of acquisitions Continuing Acquisitions Total
operations
Cash flows can be split between continuing operations and #'000 #'000 #'000
acquisitions as follows:
Net cash inflow from operating activities 1,494 1,510 3,004
Returns on investment and servicing of finance (273) (160) (433)
Taxation paid (339) (85) (424)
Capital expenditure and financial investment (2,226) (210) (2,436)
Acquisitions and disposals 848 (12,407) (11,559)
Management of liquid resources (3,274) - (3,274)
Financing 12,260 (468) 11,792
6. Statement of Total Recognised Gains and Losses
Year ended Year ended
31 December 31 December
2002 2001
#'000 #'000
Profit/(loss) attributable to the members of the group 20 (11,236)
Other recognised gains and losses for the year:
Unrealised gain/(loss) on translation of foreign currency:
Investment in subsidiaries 1,223 (467)
Total recognised gains and losses relating to the year 1,243 (11,703)
7. Supplementary Notes to the Preliminary Announcement
a) The above results and these notes, which were approved by the Board on
Tuesday 18 March 2003, do not constitute statutory accounts within the meaning
of section 240 of the Companies Act 1985. Full statutory accounts for the year
ended 31 December 2002 will be delivered to the Registrar of Companies in due
course. The audit report in respect of the full statutory accounts for the year
ended 31 December 2002 is yet to be signed.
The full statutory accounts for the period ended 31 December 2001 have been
filed with the Registrar of Companies and carried an unqualified audit report
and did not contain a statement under S237(2) or (3) of the Companies Act 1985.
b) A copy of the unaudited preliminary statement is available from the
Company Secretary, Oystertec Plc, Southgate, Market Weighton, East Yorkshire,
YO43 3BG. The Annual General Meeting is scheduled for 11:30 am on Thursday 26
June 2003 at Oystertec Plc, address as above. Confirmation of this, together
with copies of the full statutory accounts, will be posted to shareholders well
in advance of this date.
c) The above results and notes have been prepared on the same basis as set
out in the previous year's annual accounts.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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