RNS Number:1666J
Chemetall PLC
19 September 2006
Chemetall PLC
Interim Financial Report
30 June 2006
Chemetall PLC
Interim financial report 2006-08-24
Contents page
Commentary 1
Consolidated income statement 3
Consolidated statement of recognised income and expense 4
Consolidated balance sheet 5
Consolidated cash flow statement 7
Notes to the interim financial report 8
Chemetall PLC
Page 1
Commentary
Chemetall PLC sales to third parties grew by more than 11% (on a comparative
basis) over the prior year during the first 6 months of 2006. All major sectors
showed good growth with the exception of the automotive and the automotive
component sectors, which in line with UK vehicle production reduced compared to
the prior year. The Middle East markets for which Chemetall PLC is responsible
continued their steady growth.
Results and dividends
During the first six months, the Group generated a profit on ordinary activities
before taxation of #1.6 million (six months ended 30 June 2005: #0.9 million)
with a turnover of #9.8 million (six months ended 30 June 2005: #8.7 million).
The Group's loans assets, including any exchange movements and interest accrued
thereon, totalled #4.2 million at 30 June 2006 (30 June 2005: #39.1 million).
Preference dividends continue to be paid on the normal due dates.
Cash flow and financing
The net cash inflow from operating activities at 30 June 2006 was #37.6 million
(30 June 2005:#41.6 million).
During the period, the #36.7 million loan was repaid by Chemetall GmbH and this
money has been invested in a third party bank.
At the period end the Group had net cash balances of #82.1 million, #0.54
million of which was necessary to pay the preference dividend in July.
Board
There have been no changes to the Board during the half year. The Directors who
held office during this period were as follows:
K Wenzel Chairman
RS Rydings
MW Stoermer
PGM Vannerberg
Employees
Chemetall thanks its employees for continuing to help the Company grow in
turnover and profitability despite the prevailing manufacturing downturn.
Chemetall PLC continues to invest in both internal and external training and
development of all employees. The increasingly positive trading results are
directly related to the high level of competence and commitment of the staff.
Chemetall PLC
Page 2
Commentary (continued)
Outlook
The third party sales growth has continued its upward trend that started in
2005.
The first six months of 2006 have seen large increases in raw materials prices
that have resulted in margins being slightly eroded. This trend is forecast to
continue in the second half of the year, but with the tight cost control program
that commenced in 2005, now showing significant benefits, the outlook for our
future profitability looks good.
65 Denbigh Road
Bletchley
Milton Keynes MK1 1PB
By order of the Board
PGM Vannerberg
RS Rydings
Chemetall PLC
Page 3
Consolidated income statement
For the six months ended 30 June 2006
Six months ended 30 Year ended 31
June December 2005
Note 2006 2005
#000 #000 #000
Unaudited Unaudited Audited
Revenue 9,759 8,718 17,299
Cost of sales (6,397) (5,640) (11,079)
Gross profit 3,362 3,078 6,220
Other operating income - - -
Distribution costs (1,964) (2,076) (4,220)
Administrative expenses (739) (1,122) (2,601)
Profit/(Loss) from operations 659 (120) (601)
Financial income 1,573 1,575 3,062
Finance costs (556) (589) (1,292)
Profit before tax 1,676 866 1,169
Tax 3 (479) (447) (670)
Profit for the period 1,197 419 499
Chemetall PLC
Page 4
Consolidated statement of recognised income and expense
For the six months ended 30 June 2006
Six months ended 30 Year ended 31
June
2006 2005 December 2005
#000 #000 #000
Unaudited Unaudited Audited
Exchange differences on translation of 248 (1,775) (1,103)
foreign operations
Actuarial gains/(losses) on defined benefit 775 (1,174) 335
pension schemes
Tax on items taken directly to equity (232) 374 (100)
Net gain/(loss) recognised directly in equity 791 (2,575) (868)
Profit for the period 1,197 419 499
Total recognised income and expense for the 1,988 (2,156) (369)
period
Chemetall PLC
Page 5
Consolidated balance sheet
As at 30 June 2006
Note 30 June 30 June 31 December
2006 2005 2005
#000 #000 #000
Unaudited Unaudited Audited
Non-current assets
Goodwill 2,475 2,475 2,475
Other intangible assets 338 459 413
Property, plant and equipment 1,172 1,207 1,250
Deferred tax assets 3,807 4,309 4,051
7,792 8,450 8,189
Current assets
Inventories 1,161 1,110 1,346
Trade and other receivables 8,308 43,529 44,319
Income tax receivable - 17 17
Cash and cash equivalents 82,083 42,826 43,201
91,552 87,482 88,883
Total assets 99,344 95,932 97,072
Current liabilities
Trade and other payables (5,951) (5,960) (5,718)
Tax liabilities (1,467) (347) (570)
Provisions (241) (241)
(7,659) (6,307) (6,529)
Net current assets 83,893 81,175 82,354
Chemetall PLC
Page 6
Consolidated balance sheet (continued)
As at 30 June 2006
Note 30 June 30 June 31
2006 December
#000 2005 2005
#000 #000
Unaudited Unaudited Audited
Non-current liabilities
Interest bearing loans and (12,000) (12,000) (12,000)
borrowings
Retirement benefit obligation 5 (7,895) (10,152) (8,709)
Long-term provisions (1,110) (1,469) (1,142)
(21,005) (23,621) (21,851)
Net assets 70,680 66,004 68,692
Equity
Share capital 6,889 6,889 6,889
Share premium account 29,757 29,757 29,757
Translation reserve (808) (1,775) (1,056)
Retained earnings 34,842 31,133 33,102
Total equity 70,680 66,004 68,692
Chemetall PLC
Page 7
Consolidated cash flow statement
For the six months ended 30 June 2006
Six months ended 30 Year ended 31
June December 2005
Note 2006 2005 #000
#000 #000
Unaudited Unaudited Audited
Net cash from operating activities 4 37,630 41,588 (409)
Investing activities
Purchases of property, plant and (13) (48) (172)
equipment
Net cash used in investing activities (13) (48) (172)
Financing activities
Interest paid (16) (49) (4)
Interest received 1,573 1,575 3,062
Amounts due from group undertakings - - 41,504
Preference dividend paid (540) (540) (1,080)
Net cash from financing activities 1,017 986 43,482
Net increase in cash and cash 38,634 42,526 42,901
equivalents
Cash and cash equivalents at beginning 43,201 300 300
of period
Foreign exchange gain on cash and cash 248 - -
equivalents held
Cash and cash equivalents at end of 82,083 42,826 43,201
period
Chemetall PLC
Page 8
Notes to the interim financial report
Six months ended 30 June 2006
1. Basis of preparation
This interim financial information has been prepared applying the accounting
policies and presentation that were applied in the preparation of the company's
published financial statements for the year ended 31 December 2005.
The financial statements are prepared on the historical cost basis.
2. The financial statements for the half year ended 30 June 2006 have not been
audited.
The comparative figures for the financial year ended 31 December 2005 are not
the company's statutory accounts for that financial year. Those accounts have
been reported on by the company's auditors and delivered to the registrar of
companies. The report of the auditors was:
(i) unqualified
(ii) did not include a reference to any matters to which the auditors drew
attention by way of emphasis without qualifying their report, and
(iii) did not contain a statement under section 237(2) or (3) of the Companies
Act 1985.
3. Tax
Six months ended 30 June
2006 2005
#000 #000
UK corporation tax 479 447
Corporation tax for the interim period is charged at 29% (2005:52%), due to the
comparatively large amount of interest receivable included in the results,
representing the best estimate of the weighted average annual corporation tax
rate expected for the full financial year.
Chemetall PLC
Page 9
Notes to the interim financial report (continued)
Six months ended 30 June 2006
4. Notes to the cash flow statement
Six months ended 30
June
2006 2005
#000 #000
Profit before taxation 1,676 866
Adjustments for:
Depreciation of property, plant and equipment 91 139
Amortisation of intangible assets 75 106
Decrease in provisions (32) (60)
Interest income (1,573) (1,575)
Interest expense 556 589
Operating cash flows before movements in 793 65
working capital
Decrease in inventories 185 14
Decrease in receivables 36,011 39,807
Increase in payables 194 1,971
Cash generated by operations 37,183 41,857
Income taxes refunded/ (paid) 447 (269)
Net cash from operating activities 37,630 41,588
Cash and cash equivalents (which are presented as a single class of assets on
the face of the balance sheet) comprise cash at bank.
5. Retirement benefit schemes
Defined benefit schemes
The group operates two defined benefit schemes which provide for liabilities
through trustees operated funds.
During the period, the deficit in the scheme decreased by #844,000. An IAS 19
charge of #312,000 was made in the income statement for the period.
Chemetall PLC
Page 10
Notes to the interim financial report (continued)
Six months ended 30 June 2006
6. Related party transactions
Transactions between the company and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed in this
note. Transactions between the group and other related parties are disclosed
below.
Trading Transactions
During the period, group companies entered into the following transactions with
related parties who are not members of the group:
Sale of Purchase of Amounts owed by Amounts owed to
goods goods related parties related parties
Six months ended 30 2006 2005 2006 2005 2006 2005 2006 2005
June #000 #000 #000 #000 #000 #000 #000 #000
Fellow subsidiary 319 396 1,523 1,413 647 629 2,069 2,235
undertakings
Sales and purchases of goods to related parties were made at the parent group's
usual list prices. The amounts outstanding are unsecured and will be settled in
cash. No guarantees have been given or received. No provisions have been made
for doubtful debts in respect of the amounts owed by related parties.
During the period, other services such as licences, IT services and insurance
were purchased from Chemetall GmbH in the amount of #150,000 (30 June 2005:
#121,000).
Non-trading transactions
The group has lent money to the following fellow subsidiaries undertakings. The
outstanding loan balances and the interest charged on these loan balances are
presented in the table below:
Loans to Interest charged to
Six months ended 30 June 2006 2005 2006 2005
#000 #000 #000 #000
Fellow subsidiary undertakings 4,239 39,134 536 587
This information is provided by RNS
The company news service from the London Stock Exchange
END
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