RNS Number:6317G
Chemetall PLC
27 January 2003
On behalf of: Chemetall PLC
Date: 27 January 2003
Chemetall PLC
Annual Results Year Ended 30 September 2002
Chairman's statement
In common with many UK oriented manufacturing businesses, the Group has had to
endure a tough business year. Customers operating within the key industry
sectors serviced by our product portfolio are taking 7.5% less than one year
ago. Additionally several of our larger customers have announced their closure.
We have been able to offset the fall in demand and the closure effect by
winning significant amounts of new business.
Results and dividends
In the twelve months to 30 September 2002 turnover fell by 6% to #13.8 million
(2001: #14.7million). This produced an operating result before exceptional
items of #0.3 million (2001: #0.9 million). An exceptional profit of #0.4
million arose mainly on the sale of the ex-Brent International head office
property. The Group generated a profit on ordinary activities before taxation
of #2.5 million (2001: #5.6 million). The result includes #1.9 million of
interest, net of exchange movements, earned on loans held by members of the
Group with Chemetall GmbH or one of its subsidiaries.
An interim ordinary dividend of 0.009p per share (2001: nil) was paid in the
year to our ordinary shareholder, Chemetall GmbH. Preference dividends continue
to be paid on the normal due dates.
Operational Review
Our success in winning new business has enabled us to offset the economic
downturn and the effect of customer closures. Approximately 15% of turnover in
the year ended 30 September 2002 was achieved as a result of new business won
within the past eighteen months.
We continue to grow our Performance Products Division (service industries),
particularly in the mass passenger transport (road and rail cleaning chemicals)
and hard surface hygiene sectors.
Gross profit margins recovered well from our poor first-half position mainly due
to better raw material buying and some price improvement.
We have continued to keep tight control of our other operating expenditure. We
have also reduced group headcount by 9% over the course of the financial year in
order to keep the business lean enough to withstand the pressures on
productivity that have come as a result of reduced demand in the UK
manufacturing sector.
Outlook
The current economic outlook indicates that there will be a slight improvement
in industrial sector demand for our products in 2003. We are also confident of
winning new business especially in our Aerospace and Performance Products
Divisions. The Middle East market for which we are also responsible is showing
significant sales growth. For these reasons, Chemetall PLC is anticipating
modest sales growth for 2003 and beyond.
People
On behalf of the board, I would like to thank all our employees for their
dedication and professionalism throughout the year which has enabled us to
perform well in difficult trading conditions. It is at times like this when
good employees and good trading partners can ensure success.
Alec Daly CBE
Chairman
Operating and financial review
Results
Turnover for the year was #13.8 million, a decrease of 6% over last year. This
was principally due to the continuing downturn in the UK manufacturing sector.
Profit on ordinary activities before taxation was #2.5 million (2001: #5.6
million). This fall was due to several factors, most significantly the decrease
in turnover, the effect of adverse exchange movements, and a reduction in rates
of interest on the loans held by members of the Group with Chemetall GmbH or its
subsidiaries.
The Group held loans, including interest accrued thereon, totalling #74.7
million at the 30 September 2002 (2001: #72.4 million). Interest earned on
these loans was #2.7 million in the year (2001: #4.0 million). The reduction in
interest earned compared to last year was mainly due to the decrease in interest
rates and the repayment and restructuring of some of the loans. Exchange rates
had an adverse impact of #0.8 million loss on the net interest receivable for
the year compared to an exchange gain of #0.8 million in 2001. This was largely
due to a weaker Dollar, only partially offset by a stronger Euro.
An exceptional profit of #0.4 million arose from the disposal of two freehold
properties, the ex-Brent International head office at Iver and St Helens. Only
one freehold-interest now remains, that of land at Stanton, classified as
current asset investment with a net book value of #40,000.
Cash Flow
The net cash inflow from operating activities was #0.3 million (2001: #0.4m).
Net cash inflow of #1.6 million arose as a result of the disposal of freehold
properties. Capital expenditure payments increased to #99,000 (2001: #1,000).
Taxation
The Group showed a net tax charge of #1.1 million (2001: #1.7 million,
restated).
Treasury Policies
The Group's treasury policies, which are approved by the board, seek to
eliminate risk from currency movements affecting sales and purchases denominated
in foreign currencies. We use instruments such as forward currency sale or
purchase contracts where practical and cost effective.
Where appropriate, the Group's financial systems are able to transact business
denominated in foreign currencies.
Accounting Standards
The Group has adopted FRS19, Deferred Taxation. FRS19 requires full provision
for deferred taxation in relation to all future obligations not dealt with as
current tax. The consequent prior year adjustment is detailed in note 4 to the
accounts.
Consolidated profit and loss account
for the year ended 30 September 2002
Note Restated
2002 2001
#000 #000
Group turnover 2 13,794 14,688
Cost of sales (6,516) (6,487)
Gross profit 7,278 8,201
Selling and distribution costs (5,232) (5,179)
Administrative expenses (1,811) (3,346)
Other operating income 82 1,189
Operating profit 317 865
Profit on sale of properties held for resale 357 -
Profit on ordinary activities before interest 674 865
Net interest receivable and similar income 1,871 4,741
Profit on ordinary activities before taxation 2,545 5,606
Taxation on profit on ordinary activities (1,053) (1,725)
Profit for the financial year 1,492 3,881
Dividends on equity and non equity shares 3 (1,699) (1,080)
Retained (loss)/profit for the year (207) 2,801
The results for the current and preceding financial year are derived from
continuing operations.
Consolidated balance sheet
at 30 September 2002
Restated
Note 2002 2002 2001 2001
#000 #000 #000 #000
Fixed assets
Intangible assets 3,267 3,458
Tangible assets 1,630 1,789
4,897 5,247
Current assets
Investments 40 1,319
Stocks 1,177 1,103
Debtors 80,241 81,525
Cash at bank and in hand 3 171
81,461 84,118
Creditors: amounts falling due within one year (4,788) (7,652)
Net current assets 76,673 76,466
Total assets less current liabilities 81,570 81,713
Provisions for liabilities and charges (758) (1,155)
Net assets 80,812 80,558
Capital and reserves
Called up share capital 18,889 18,889
Share premium account 29,757 29,757
Profit and loss account 32,166 31,912
Shareholders' funds 4 80,812 80,558
Equity 68,812 68,558
Non-equity 12,000 12,000
80,812 80,558
Consolidated cash flow statement
for the 12 month period ended 30 September 2002
Note 2002 2001
#000 #000 #000 #000
Net cash inflow from operating activities 6 257 394
Returns on investments and servicing of finance
Interest received - 123
Interest paid (28) (44)
Dividends paid on non-equity shares (1,080) (1,080)
Net cash outflow from returns on investments
and servicing of finance (1,108) (1,001)
Taxation (993) (483)
Capital expenditure and financial investment
Purchase of tangible fixed assets (99) (1)
Purchase of intangible fixed assets (30) -
Sale of properties for resale 1,636 -
Net cash inflow/(outflow) from capital 1,507 (1)
expenditure
Net cash outflow before financing (337) (1,091)
Financing
Debt due within one year:
Repayment of short-term borrowings - (2,110)
Repayment of loans due from group undertakings - 2,818
Net cash inflow from financing - 708
Decrease in cash in the period 8 (337) (383)
Consolidated statement of total recognised gains and losses
for the 12 months ended 30 September 2002
Restated
2002 2001
#000 #000
Profit for the financial year 1,492 3,881
Exchange difference on the retranslation of net investments and related 461 1,516
borrowings
Total recognised gains and losses relating to the year 1,953 5,397
Prior period adjustment 963
Total gains and losses recognised since last annual report 2,916
Notes
1 Accounting policies
Basis of preparation and accounting
The unaudited preliminary results for the year ended 30 September 2002 have been
prepared in accordance with UK generally accepted accounting principles. The
accounting policies applied are those set out in the Group's Annual Report and
Accounts for the nine months ended 30 September 2001.
The Group has adopted FRS 18 "Accounting Policies" and FRS 19 "Deferred Tax".
The comparative figures have been restated accordingly.
Basis of consolidation
The consolidated financial statements include the financial statements of the
company and its subsidiary and associated undertakings made up to 30 September
2002. The acquisition method of accounting has been adopted. Under this method
the results of subsidiary undertakings acquired or sold during the year are
included in the consolidated profit and loss account from or to their respective
dates of acquisition or disposal. Where appropriate, the financial statements
of overseas subsidiary and associated undertakings are adjusted to conform to
the Group's accounting policies.
2 Segmental information
All activities are derived from the development, manufacture and marketing of
specialised industrial chemicals.
The table below sets out information for each of the group's geographic areas of
operation.
Restated
2002 2001
Profit before Profit
Turnover taxation Net Assets Turnover before Net Assets
taxation
#000 #000 #000 #000 #000 #000
UK 13,375 674 3,810 14,501 865 3,779
Middle East 419 - - 187 - -
Continental Europe - - - - - -
Total continuing operations 13,794 674 3,810 14,688 865 3,779
Net interest receivable - 1,871 - - 4,741 -
Cash, loans and overdrafts - - 74,500 - - 73,720
Unallocated assets - - 2,502 - - 3,059
13,794 2,545 80,812 14,688 5,606 80,558
Turnover by destination is not materially different from the turnover by origin
stated above.
Notes (continued)
3 Dividends and other appropriations
2002 2001
#000 #000
10p ordinary shares
Interim dividend 619 -
9% redeemable reference shares
Dividend payable 1,080 1,080
1,699 1,080
4 Reconciliation of movements in shareholders funds
Restated
2002 2001
#000 #000
At beginning of the year 80,558 73,682
Prior period adjustment - 2,559
Restated opening shareholders' funds 80,558 76,241
(Loss)/profit for the year (207) 2,801
Other recognised gains and losses in the year (net) 461 1,516
At end of the year 80,812 80,558
The group has adopted FRS 19 "Deferred Tax" in these financial statements. The
adoption of this Financial Reporting Standard has given rise to a prior year
adjustment and accordingly a restatement of comparatives.
The impact of the restatement on the results of the current year for the company
and group is an increase in the tax charge of #264,000 (2001: increase in tax
charge of #325,000) and an increase in reported net assets of #699,000 (2001:
increase of #963,000).
5 Contingent liabilities
The Company has contingent liabilities in the form of performance guarantees
totalling #1,451,215 (2001: #1,430,960) which expire within 12 months.
The Company received from Weir Technology Limited in March 1999 notice of claims
pursuant to the sale by Brent International BV (and the Company as Guarantor) of
Verbeeck-Marien NV, part of the Imaging Management business sold to Weir in
October 1998. Weir issued an Arbitration Notice on 30 July 2002 which alleges
misrepresentation and seeks damages which Weir quantifies at approximately
#7.2m. After taking advice, the Directors are defending the claim in its
entirety. In addition, the Company received from Weir in October 2001 notice of
claims relating to 1995 and 1996 under a tax indemnity in the sale agreement.
The claims notified amount to approximately #300,000. The Directors will be
defending elements of these claims. Weir intend to notify the Company in due
course of claims under the tax indemnity relating to 1997 and 1998.
Notes (continued)
6 Reconciliation of operating profit to operating cash flows
2002 2001
#000 #000
Operating profit 317 865
Depreciation, amortisation and impairment charges 478 573
Exchange (loss)/gain on loans to subsidiary undertakings (842) 817
Decrease in restructuring provision (100) (1,503)
Increase in stocks (74) (99)
Decrease in debtors 773 125
Decrease in creditors and other provisions (295) (384)
Net cash inflow from operating activities 257 394
7 Analysis of net debt
At the beginning Exchange At the end
of the year Cash flow movement Other of the year
#000 #000 #000 #000 #000
Cash at bank 171 (168) - - 3
Bank loans and overdrafts - (169) - - (169)
Loans to group undertakings 69,682 - (415) 5,458 74,725
Loans from group undertakings (4,352) - - 4,352 -
Net funds 65,501 (337) (415) 9,810 74,559
8 Reconciliation of net cash flow to movement in net debt
2002 2001
#000 #000
Decrease in cash in the year (337) (383)
Cash inflow from financing - (708)
Changes in net debt resulting from cash flows (337) (1,091)
Non-cash movements on loans (see below) 9,810 -
Translation differences (415) 2,016
Movement in net funds in the year 9,058 925
Net funds at beginning of the year 65,501 64,576
Net funds at the end of the year 74,559 65,501
Non-cash movements on loans consist of accrued and current interest being rolled
up into the principal amounts on existing loan to group undertakings.
Notes (continued)
9 Declaration
The results for the year ended 30 September 2002 are unaudited. The results for
the year ended 30 September 2001 are an extract from the full accounts for that
period and have been delivered to the Registrar of Companies; the report of the
auditors on those accounts was unqualified. The accounts for the year ended 30
September 2002 will be posted to all shareholders shortly. The report of the
auditors on those accounts is expected to be unqualified. The financial
information in this statement does not constitute full statutory accounts within
the meaning of section 240 of the Companies Act 1985.
Ends
For further information, please contact:
Rob Rydings
Chemetall PLC 01908 361 817
John Coyle
Clerkenwell Communications 0207 713 0900
07770 687 370
07699 727 796 (pager)
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR BCGDBSDDGGXS
Chemetall 9%Pf (LSE:CHM)
Historical Stock Chart
From Jun 2024 to Jul 2024
Chemetall 9%Pf (LSE:CHM)
Historical Stock Chart
From Jul 2023 to Jul 2024
