RNS No 2611a
ECLIPSE BLINDS PLC
1st September 1998
ECLIPSE BLINDS PLC ('Eclipse')
Interim Results
For the six months ended 30 June 1998
Highlights
* Sales from continuing activities up 8% to over #24
million
* Profit before tax rose 10% to 3.44 million
* Headline earnings per share up 9.3% to 4.95p
* Dividend up 10% to 1.32p (net)
Chairman, Ted Black, commented:
"Eclipse has in the first six months of the year continued its
record of turnover and earnings growth. With a good
performance in the first half under our belt and, despite
concerns over the UK economy, we remain of the view that 1998
will show Eclipse continuing to make further progress for the
fifth consecutive year."
CHAIRMAN'S STATEMENT
Eclipse has in the first six months of the year continued its
record of turnover and earnings growth. In particular the US
business and the recently acquired Swedish business (OPM)
continue to grow strongly and support our decision to expand
in both areas by acquisition.
Results
Comparing the six months to 30 June 1998 with the first half
of 1997, sales from continuing activities increased 8% to over
#24m, and operating profits grew 4.4% to #3.46m. Operating
margins were marginally down from 14.9% to 14.4%, but on a
like-for-like basis, stripping out the leaseback rental
resulting from the disposal of our interest in our principal
UK property in October last year, operating profits increased
by 13%, and the operating margin figure increased to 15.8%.
With interest costs virtually eliminated following two
consecutive years of excellent operating cash flow and the
proceeds from the aforesaid property transaction, profit
before tax rose a creditable 10%. Headline earnings per share
rose 9.3% over 1997.
Operating Performance
It is pleasing to report continued growth in operating profits
in our US business. In the first six months of 1998 it
exceeded that of the UK business for the first time. This
was due to increased sales and improved margins resulting from
firm cost control and productivity improvements. Sales in the
UK business weakened slightly against 1997 but margins remain
strong and cost control remains tight. The new product launch
programme is currently being released and advance bookings
from customers give us confidence for continued success in the
coming years.
The acquisition of OPM in October 1997 has given the Group
security of supply in an important product area and trading
for the six months to June 1998 has been excellent.
Trading throughout Europe remains flat but we are active in
plans to stimulate new growth in Group companies in this area
which is the smallest of our three theatres of operation.
Dividend
We have stated our intention to pursue a progressive dividend
policy. In view of the strong first half performance, the
board has approved the payment of an interim dividend of 1.32p
(net) per ordinary share, an increase of 10% over last year's
interim payment. The dividend is amply covered at 3.7 times
on the first half year's figures.
The dividend will be paid on 1 October 1998 to shareholders on
the register on 18 September 1998.
Outlook
Due to other commitments, in March of this year Hamish
Grossart indicated his wish to stand down as chairman, once a
replacement was identified. Hamish took over the chairmanship
in early 1994, and the improvement in financial performance
and growth of the Eclipse group owes much to Hamish's input
during those years. It is a challenging performance for me to
follow, but with a solid, profitable, and well established
base I look forward to playing my part in the future progress
and continued growth of the company.
Business confidence in the UK is suffering at present with
concerns about underlying inflation, a strong pound, and
comparatively high money costs. In contrast, spending levels
in the US are extremely good and business confidence in this
market is strong with growth in new home sales the fastest on
record. Economic factors in Europe are reported to be
improving. The Group, with a strong and growing presence in
the US, is well positioned throughout its main markets.
In both 1997 and the first half of 1998 the strength of
sterling has remained neutral on the Group's profits. With
negligible bank borrowings interest rates are not currently an
issue. Even if the Group were to increase borrowings to fund
growth opportunities, we believe the operating characteristics
of the business and current low debt position will allow us to
do this comfortably.
The second half of the year is historically the strongest half
for trading. The extensive product launch programme in both
the UK and the US referred to earlier will stimulate sales in
future years. With a good performance in the first half under
our belt and, despite concerns over the UK economy, we remain
of the view that 1998 will show Eclipse continuing to make
further progress for the fifth consecutive year.
Ted Black
Chairman
UNAUDITED GROUP PROFIT AND LOSS ACCOUNT
For six months ended 30 June 1998
6 months 6 months Year ended
ended ended 31 Dec
30 June 30 June 1997
1998 1997 (audited)
#'000 #'000 #'000
Turnover
Continuing operations 24,062 22,289 45,074
Discontinued activity - 326 326
------ ------ ------
24,062 22,615 45,400
====== ====== ======
Operating profits
Continuing operations 3,460 3,314 7,436
Discontinued activity - 30 30
------ ------ ------
3,460 3,344 7,466
====== ====== ======
Exceptional items
Loss on sale of British
Plywood including
goodwill previously
written off - (192) (193)
Loss on disposal of interest
in property - - (713)
------ ------ ------
Profit before interest 3,460 3,152 6,560
Net interest (19) (218) (294)
------ ------ ------
Profit before taxation 3,441 2,934 6,266
Taxation (861) (818) (1,541)
------ ------ ------
Profit after taxation 2,580 2,116 4,725
Minority Interests 2 (23) (17)
------ ------ ------
Profit attributable to
shareholders 2,582 2,093 4,708
Preference Dividend (423) (446) (870)
Ordinary Dividend (581) (501) (1,542)
------ ------ ------
Retained profit for the period 1,578 1,146 2,296
====== ====== ======
IIMR Headline Earnings
per ordinary share (pence) 4.95 4.53 11.43
Earnings per share 4.95 4.06 9.25
UNAUDITED SUMMARISED GROUP BALANCE SHEET
At 30 June 1998
30 June 30 June 31 Dec
1998 1997 1997
(audited)
#'000 #'000 #'000
Fixed assets 4,894 12,028 4,996
------ ------ -----
Current assets
Stocks 10,919 8,988 9,745
Debtors 9,521 8,934 8,859
Cash at bank and in hand 2,559 3,064 2,766
------ ------ -----
22,999 20,986 21,370
Creditors due within one year
Bank borrowings and deferred
consideration (2,483) (8,505) (2,008)
Other (10,442)(10,237)(10,454)
------ ------ ------
Net current assets 10,074 2,244 8,908
====== ====== ======
Total assets less current liabilities 14,968 14,272 13,904
Creditors due after more than one year
Bank borrowings and
deferred consideration (1,741) (350) (1,941)
Provisions for liabilities
and charges (100) (315) (166)
------ ------ ------
13,127 13,607 11,797
====== ====== ======
Capital and reserves
Called up share capital 11,563 11,071 11,477
Share premium account 27,539 25,782 27,419
Other reserves (39,112)(34,356)(39,071)
Capital redemption reserve 76 - 71
Profit and loss account 13,023 10,830 11,605
------ ------ ------
Total shareholders funds 13,089 13,327 11,501
Equity shareholders funds (482) (336) (2,161)
Non equity shareholders funds 13,571 13,663 13,662
Equity minority interests 38 280 296
------ ----- ------
13,127 13,607 11,797
CASHFLOW STATEMENT
For the six months ended 30 June 1998
Six Months to Six months to Twelve Months to
30 June 1998 30 June 1997 31 December 1997
(audited)
#000 #000 #000
Cashflow from
operating activites
Continuing 2,036 2,662 8,253
Returns on investment
and servicing of finance
Interest received 37 20 80
Interest paid (66) (294) (444)
Dividends paid on
non equity capital (425) (454) (466) (740) (891)(1,255)
------ ----- ----- ----- ------ -----
1,582 1,922 6,998
Taxation
Taxation paid (547) (1,089) (2,208)
Taxation recovered 128 (419) 45 (1,044) 41 (2,167)
------ ----- ----- ----- ----- -----
1,163 878 4,831
Capital expenditure
Payments to acquire
tangible fixed assets (301) (360) (632)
Receipts from sales of
tangible fixed assets 15 (286) 36 (324) 7,156 6,524
----- ------ ----- ---- ----- -----
Acquisitions and
disposals
Net cashflow on sale
of subsidiary 534 534
Deferred consideration (1,501) (1,534) (1,478)
Net cash outflow on
acquisition of
minority
interest in subsidiary (259) - -
Consideration on
acquisition of
subsidiary (132) - (3,774)
------ ------ ------
(1,892) (1,000) (4,718)
Dividends paid
On equity capital (1,046) (807) (1,308)
------ ----- -----
Net cash outflow
before financing (2,061) (1,253) 5,329
Financing
Proceeds from exercise
of share options 129 - 10
Repayment of loans (210) (2,715) (2,797)
------ ------ ------
(81) (2,715) (2,787)
------ ------ ------
(Decrease)/increase
in cash (2,142) (3,968) 2,542
====== ====== ======
NOTES
1. Basis of Preparation
The profit and loss account and balance sheet have been
prepared on a basis consistent with the statutory
financial statements for the year to 31 December 1997.
2. Taxation
The charge for taxation for the six months ended 30 June
1998 reflects the anticipated effective rate for the year
ended 31 December 1998.
3. Earnings per share
The calculation of earnings per ordinary share is based
on profits of #2,159,000 (1997 : 6 months : #1,647,000,
1997 year : #3,838,000) after deducting preference
dividends accruing during the year, attributable to the
ordinary shares in issue.
IIMR headline earnings per share is stated to exclude
exceptional items. The reconciliation of IIMR eps to
basic eps is:
June June December
1998 1997 1997
Basic eps (pence) 4.95 4.06 9.25
Exceptional loss on
disposal of British Plywood - 0.47 0.46
Exceptional loss on disposal
of interest in property - - 1.72
IIMR headline eps 4.95 4.53 11.43
4. Approval
The interim statement for the six months ended 30 June
1998 was approved by the directors on 1st of September
1998. The interim report is unaudited but has been
reviewed by the auditors and their report to the
directors is set out in this report. The financial
information contained in this interim report does not
constitute statutory accounts of the Group for the
relevant periods. The 1997 full year figures are based
upon statutory accounts which have been filed with the
Registrar of Companies and contain an unqualified audit
report.
5. Copies of this report have been sent to shareholders and
further copies are available from the registered office
of the company and from its principal office, Fountain
Crescent, Inchinnan Business Park, Glasgow, PA4 9RE.
NOTES
Review report by KPMG Audit Plc to Eclipse Blinds plc
We have reviewed the interim financial information for the six
months ended 30 June 1998 set out on pages 4 to 7 which is the
responsibility of, and has been approved by, the directors.
Our responsibility is to report on the results of our review.
Our review was carried out having regard to the Bulletin
Review of Interim Financial Information, issued by the
Auditing Practices Board. This review consisted principally
of applying analytical procedures to the underlying financial
data, assessing whether accounting policies have been
consistently applied, and making enquiries of Group management
responsible for financial and accounting matters. The review
was substantially less in scope than an audit performed in
accordance with Auditing Standards and accordingly we do not
express an audit opinion on the interim financial information.
On the basis of our review:
* in our opinion the interim financial information has been
prepared using accounting policies consistent with those
adopted by Eclipse Blinds plc in its financial statements for
the half year ended the 30th of June; and
* we are not aware of any material modifications that
should be made to the interim financial information as
presented.
KPMG Audit Plc
Chartered Accountants
Glasgow
For further information, please call :
Eclipse Blind PLC
Ted Black,Chairman 0141 567 7722
or 0374 153065
Bill Macdonald, Managing Director 0370 643 936
Ken Brown, Finance Director 0370 643 936
Buchanan Communications 0171 466 5000
Zena Bates / Isabel Petre
END
IR SESFWAUAUFIA
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