RNS Number:0002C
Chemetall PLC
16 August 2004
Chemetall PLC
Six months ended 30 June 2004
Chairman's statement
The first six months of 2004 have seen Chemetall PLC make a strong start against
a background of slowly improving market conditions. Half-year sales were 3% greater
than for the comparative period in the prior year bolstered by continued growth
in our Aerospace and Performance Products Divisions. Sales to our Middle East
markets were ahead of plan although there is still the possibility that the
general political situation in this area may have an adverse effect during the
second half of 2004. Sales to general industrial manufacturers have continued to
fall in line with the UK economic trend in the manufacturing sector.
Results and dividends
During the period the Group generated a profit on ordinary activities before
taxation of #1.4 million (30 June 2003: #2.2 million) with a turnover of #7.1
million (30 June 2003: #6.9 million). The result for the comparative period to
30 June 2003 includes exchange gains of #1.0 million on loans held with other
Chemetall GmbH group companies denominated in foreign currencies which have been
converted into sterling prior to the current period.
The Group's loan assets, including exchange movements and interest accrued
thereon, totalled #79.2 million at 30 June 2004 (31 December 2003: #80.9
million).
Preference dividends continue to be paid on the normal due dates.
Operational Review
The Aerospace Division sales were 9% above plan for the year to date. Sales to
Airbus and Rolls Royce Aerospace Engines, where we act as the preferred supplier
of speciality chemicals, continue to reflect growth in new aircraft orders.
Following several years of decline in the automotive market, mainly due to
significant plant closures, we have re-focused our approach to this area and as
a result sales for the Automotive Division were 5% ahead of target.
The overall performance of our Advanced Technologies Division was in line with
expectations. Automotive components and cold-forming sectors gained some new
business but general industrial sales have proved disappointing so far.
The Performance Products Division (PPD), serving mainly service-orientated
industries, continues to show encouraging growth, especially in sales to surface
transport industries such as road freight, bus and rail. In addition, we have
developed new environmentally friendly solutions for the rail transport segment.
Cash flow and financing
The net cash inflow from operating activities was #0.6 million (30 June 2003:
#0.6 million). During the period, #1.1 million was received from Chemetall GmbH
for payment of part of the interest accrued on loans.
At the period end the Group had net cash balances of #1.0 million, #0.5 million
of which was necessary to pay the preference dividend in July.
Change of ultimate parent undertaking
As previously announced, our ultimate holding company, mg technologies ag ('mg')
has sold its chemical business, Dynamit Nobel ('DN'), of which Chemetall PLC is
a part.
The sale of DN to Rockwood Specialties Group Inc., a US-based speciality
chemicals company, was approved by annual general meeting of shareholders and
anti-trust authorities earlier this year and the change of ownership became
effective from 1 August 2004.
Outlook
After a sustained period of difficult trading conditions, which has affected our
results over the past few years, we have found market conditions more stable
with signs of recovery. Results have been in line with expectations and we see
no reason, given the strength of our operational project list, why a steady
growth trend should not continue for the second half of the year and beyond.
We are further reviewing our strategic approach, in particular moving towards
offering chemical management services and business-to-business options to our
customers. We will continue to manage our operating cost position very carefully
and as a result increased growth should allow us to improve our trading results.
Alec Daly CBE
Chairman
Chemetall PLC
Six months ended 30 June 2004
Consolidated Profit and Loss Account
Unaudited Unaudited Audited
Six months Six months Fifteen months
ended ended ended
30 June 2004 30 June 2003 31 December 2003
Notes #'000 #'000 #'000
Group turnover 1 7,116 6,907 16,820
Operating loss (81) (130) (552)
before exceptional
operating items
Exceptional - - (850)
operating items -
Litigation costs
Operating loss (81) (130) (1,402)
after exceptional
operating items
Profit on sale of - - 6
properties held for
resale
Loss on ordinary (81) (130) (1,396)
activities before
interest
Net interest 2 1,465 2,356 4,568
receivable and
similar income
Profit on ordinary 1,384 2,226 3,172
activities before
taxation
Taxation on profit (220) (428) (628)
on ordinary
activities
Profit on ordinary 1,164 1,798 2,544
activities after
taxation
Dividends on equity (540) (540) (1,350)
and non equity
shares
Amount transferred 624 1,258 1,194
to reserves
Consolidated Balance Sheet
Unaudited Unaudited Audited
Six months Six months Fifteen months
ended ended ended
30 June 2004 30 June 2003 31 December 2003
#'000 #'000 #'000
Fixed assets
Intangible 2,778 3,057 2,906
Tangible 1,364 1,543 1,443
4,142 4,600 4,349
Current assets
Investments - 40 -
Stocks 992 1,030 1,082
Debtors 83,874 86,144 85,500
Cash at bank and in hand 991 4 203
85,857 87,218 86,785
Creditors: amounts falling (4,071) (4,703) (3,838)
due within one year
Net current assets 81,786 82,515 82,947
Total assets less current 85,928 87,115 87,296
liabilities
Provisions for liabilities (708) (733) (667)
and charges
85,220 86,382 86,629
Capital and reserves
Called-up share capital 18,889 18,889 18,889
Share premium account 29,757 29,757 29,757
Profit and loss account 36,574 37,736 37,983
Shareholders' funds 85,220 86,382 86,629
Equity interest 73,220 74,382 74,629
Non-equity interest 12,000 12,000 12,000
Shareholders' funds 85,220 86,382 86,629
Consolidated Cash Flow Statement
Unaudited Unaudited Audited
Six months Six months Fifteen months
ended ended ended
30 June 2004 30 June 2003 31 December 2003
Notes #'000 #'000 #'000
Net cash inflow/ 4 646 559 (22)
(outflow) from
operating activities
Returns on investments
and servicing of finance
Interest received 1,050 - 2,056
Interest paid (2) (6) (73)
Dividends paid on (540) (540) (1,080)
non-equity shares
Net cash inflow/ 508 (546) 903
(outflow)
Taxation (287) (163) (434)
Capital expenditure
and investments
Purchase of tangible (79) (71) (118)
fixed assets
Purchase of intangible - (6) (6)
fixed assets
Sale of properties - - 46
for resale
Net cash outflow (79) (77) (78)
Increase/(decrease) 6 788 (227) 369
Statement of total group recognised gains and losses
Unaudited Unaudited Audited
Six months Six months Fifteen months
ended ended ended
30 June 2004 30 June 2003 31 December 2003
#'000 #'000 #'000
Profit for the period 1,164 1,798 2,544
Currency translation (2,033) 1,416 4,623
differences on foreign
currency net investments
Total recognised gains (869) 3,214 7,167
relating to the period
Notes to the unaudited results
1. Turnover
All activities are derived from the development, manufacture and marketing of
specialised industrial chemicals.
2. Net interest receivable and similar income
Unaudited Unaudited Audited
Six months Six months Fifteen months
ended ended ended
30 June 2004 30 June 2003 31 December
2003
Net interest on bank loans, #'000 #'000 #'000
overdrafts and other loans:
Wholly receivable within 1,467 1,336 3,335
five years - loans to
parent group undertakings
Interest receivable on cash - - 74
balances
Exchange gain/(loss) on - 1,026 1,232
loans to parent group
undertakings
Total interest receivable 1,467 2,362 4,641
Wholly repayable within (2) (6) (73)
five years - bank
overdrafts
Net interest receivable 1,465 2,356 4,568
3. Movement in shareholders' funds
Unaudited Unaudited Audited
Six months Six months Fifteen months
ended ended ended
30 June 2004 30 June 2003 31 December 2003
#'000 #'000 #'000
Profit for the period 1,164 1,798 2,544
Dividends paid and (540) (540) (1,350)
proposed
Transfer to reserves 624 1,258 1,194
Other recognised gains (2,033) 1,416 4,623
and losses relating to
the period
Net (decrease)/increase (1,409) 2,674 5,817
in shareholders'
funds
Opening shareholders' 86,629 83,708 80,812
funds
Closing shareholders' 85,220 86,382 86,629
funds
4. Reconciliaton of operating loss to net cash inflow from operating activities
Unaudited Unaudited Audited
Six months Six months Fifteen months
ended ended ended
30 June 2004 30 June 2003 31 December 2003
#'000 #'000 #'000
Operating loss before (81) (130) (552)
exceptional operating items
Exceptional operating - - (850)
items - Litigation
costs paid
Operating loss (81) (130) (1,402)
Depreciation, amortisation 286 285 672
and impairment charges
Decrease in stocks 90 221 95
Decrease in debtors - 181 1,243
Increase/(decrease) in 351 2 (630)
creditors and other provisions
Net cash inflow/(outflow) from 646 559 (22)
operating activities
5. Analysis of net funds
Exchange
1 January 2004 Cashflow movement Other 30 June 2004
#'000 #'000 #'000 #'000 #'000
Cash at bank 203 788 - - 991
Loans to group 80,866 (1,050) (2,042) 1,467 79,241
undertakings
Total 81,069 (262) (2,042) 1,467 80,232
6. Reconciliation of net cash flow to movement in net funds
30 June 2004
#'000
Increase in cash in the period 788
Cash flow from movement in funds in the period (1,050)
Change in net funds resulting from cash flows (262)
Non-cash movements on loans* 1,467
Translation differences (2,042)
Movement in net funds in the period (837)
Net funds at 1 January 2004 81,069
Net funds at 30 June 2004 80,232
* Non-cash movements on loans consist of interest being rolled up into the
principal on existing loans to group undertakings
7 Post balance sheet events
The company's ultimate holding company, mg technologies AG sold it's
chemical business, Dynamit Nobel of which Chemetall is a part, to Rockwood
Specialties Group Inc. The change of ownership became effective from 1
August 2004.
Due to the change in ownership it will become necessary to transfer the
pension arrangments for certain employees from the Metallgesellschaft group
pension scheme to the Chemetall UK pension scheme. This will require an
additional payment of approximately #800,000 to fund the liability.
8. The results for the fifteen months ended 31 December 2003 are an extract
from the latest published accounts which have been delivered to the
Registrar of Companies; the report of the auditors on those accounts was
unqualified and did not contain any statement under section 237 of the
Companies Act 1985
9. The results for the six months to 30 June 2004 have been prepared on a basis
consistent with the previous year end in accordance with the accounting
policies disclosed in the published accounts
10. The financial information in this statement does not constitute statutory
accounts within the meaning of Section 240 of the Companies Act 1985
11. The results were approved by the Board of Directors on 12 August 2004
12. The announcement is being posted to all Shareholders on 17 August 2004 and
copies are available at the Company's Registered Office
This information is provided by RNS
The company news service from the London Stock Exchange
END
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