RNS Number:4363M
Goldshield Group PLC
19 June 2000
GOLDSHIELD GROUP PLC
Preliminary Results for the year ended 31 March 2000
Goldshield Group plc, the profitable, marketing-led,
emerging British pharmaceutical company, has pleasure in
reporting its preliminary results for the year ended 31
March 2000.
HIGHLIGHTS
* Turnover up by 52% to #52.6m (1999: #34.7m)
* Pre-tax profit increased by 68% to #9.4m (1999:
#5.6m)
* Diluted earnings per share up 68% to 16.5p (1999: 9.8p)
* Final dividend of 1.8p per share - total dividend
for year 2.6p per share
(1999: 1.38p per share)
* Strong level of organic growth in UK sales plus part
year contributions from several acquisitions
* Sales in UK & Western Europe increased by 44%; in
Rest of World (excluding USA and Canada) by 1,251%;
entry into US and Canadian markets planned for 2000
* Successful equity capital raising through a placing
and open offer was completed in June 1999, raising #15.7m
net of expenses
* Role of Chairman and Chief Operating Officer to be split
Ajit Patel, Chairman and Chief Executive of Goldshield
Group, said:
"Growth in this financial year has been excellent
and this is primarily as a result of strong organic
growth in UK sales and part year contributions from
our numerous acquisitions. In order to continue to
deliver sustained growth to our shareholders our
principle focus in the short to medium term will be
on consolidation and optimisation of resources
within our businesses."
For further information, please contact:
Goldshield Group plc Tel on 19.06.00: +44 (0)207 466 5000
Ajit Patel, Chairman & Chief Executive
Thereafter: +44 (0) 208 649 8500
Rakesh Patel, Finance Director
Buchanan Communications Tel: +44 (0) 207 466 5000
Nicola How
Goldshield Group plc
Preliminary Results for the year ended 31 March 2000
Chairman's Statement
The year ended 31 March 2000 has been a highly
significant one in the development of the Group. It has
seen continued maturing, underpinned by progressive
achievements in strategy development, management and
expansion into international markets. In order to
provide a steady growth in future earnings per share, the
Directors have begun a careful and managed process of
operational changes. These changes are critical in order
that carefully tested strategies are implemented to shift
the focus towards globalisation and away from being a
predominantly UK player.
In order to deliver sustained future growth, particular
emphasis in the last six months has been placed on
consolidation. This will be carried out from the solid
foundations established over the past few years.
Product acquisitions in the UK, Europe and the Developing
World, investment in existing and new management,
expanding product portfolio and investment in new
channels of distribution are the cornerstones of the
Group's strategy going forward.
Financial Review
Turnover:
The Group has continued to enjoy both acquisitive and
organic growth over the last financial year. As a
result, Group turnover has increased by 52% to #52.6m
(1999: #34.7m) and profit before tax and exceptionals has
increased by 68% to #9.4m (1999: #5.6m) Diluted earnings
per share increased by 68% to 16.5p (1999: 9.8p), which
is somewhat higher than forecast, profits to 31 March
1999 being impacted by exceptionals relating to costs
associated with the 1998 flotation.
Sales in the UK and Western Europe were #49.5m (1999:
#34.5m), which represents an increase of 44%. Like for
like growth was 30% with the remainder being accounted
for through acquisition.
To date the US and Canadian markets have not been
targeted by the Group, but it is intended that this will
change during 2000. The Directors are currently
evaluating strategies and investigating appropriate
opportunities with the view to developing some activity
during the new financial year.
Sales in the Rest of the World were #3.1m (1999: #0.2m) a
1,251% increase over the same period last year. Like for
like growth was 36%, whilst the rest is attributable to
acquisitions.
Gross Profit:
The Group's gross profit was #39.7m (1999: #25.6m) after
charging product manufacturing and packaging costs. The
Group's gross margin improved to 75% from 74% largely as
a result of buying efficiencies.
Operating Results:
Group operating profit was #8.9m (1999:#4.7m) producing
an operating margin of 17% (1999: 14%). This improvement
reflects the benefits of economies of scale.
Earnings and Dividends:
Diluted earnings per share has increased 68% to 16.5
pence (1999: 9.8 pence). Basic earnings per share has
increased 70% to 17.2 pence (1999: 10.1 pence).
In view of the Group's success during the year the
Directors propose a final dividend of 1.8 pence per
share, making a total dividend for the financial year of
2.6 pence per share (1999: 1.38 pence per share). This
is an increase of 88% on last year.
The final dividend will be subject to approval at the
Annual General Meeting and is expected to be paid on 4
August 2000 to Ordinary Shareholders on the register at
the close of business on 30 June 2000.
Operating Review
During the financial year ended 31 March 2000, the Group
has made a significant investment in developing a network
of international distributors in Europe, Middle East,
Africa, Far East and Asia Pacific. This investment has
come in the form of a series of acquisitions from
SmithKline Beecham, Proctor and Gamble, Regina, Norgine,
G.D. Searle and Novartis. These acquisitions, combined
with our own management initiatives, have given us
distributor presence in over 50 countries worldwide - we
expect this to grow over the next year.
Appropriate management restructuring has begun in order
that we can capitalise on opportunities for growth
outside our UK base. Our objective is to build sales
into three regions over the next 18-36 months. These
regions are:
- UK and Western Europe
- USA and Canada
- Rest of the World
In June 1999 approximately #15.7m of additional equity
capital was raised, net of expenses, through a placing
and open offer. Despite spending #39.1m in a series of
acquisitions, part paid and part deferred, the Group
remains strong in its cash position, which at the end of
the year was #11.4m. This coupled with internal cash
generation should provide scope for further growth.
Product Development:
Several new products were introduced across the Group
during the period. The total development expenditure for
the year was #0.6m compared to the same period last year
when we spent #0.5m.
The UK generics market has enjoyed improved prices and
the Directors have responded by launching a range of
niche generic pharmaceuticals. We would expect sales
continuation from these products in some of our
international markets as well.
Distribution:
As reported at the time of our interim results, the Group
has started a careful investment programme in the
Internet market. Our site is now operational and we will
begin a market testing exercise to access new customer
segments. Many of the economics attributed to internet
selling as opposed to conventional retail are already
available to us through mail order. Long term, we
expect the internet to become a profitable and viable
medium from which to expand the customer base both in the
UK and overseas using our existing fulfilment
infrastructure.
The second half of the last financial year saw the launch
of our concept Health Centre in Central London. This
provides complementary therapies and sells our healthcare
products. The testing is progressing well and we expect
the site to be profitable on an annualised basis by the
end of the current financial year. In order to extend
out testing we have acquired two more sites - these are
located in Beaconsfield and Stratford upon Avon. By
the end of this financial year, we expect to announce a
plan for controlled roll out across the UK.
We are now investing in developing more direct methods of
selling. Person to person selling accounts for twice the
sales of mail order in most developed countries. It is
also an excellent method of distribution in developing
countries where the postal systems are not adequate and
levels of unemployment high.
Management Update:
In light of the Group's continuing growth and in keeping
with our promise, the Board will be restructured. With
immediate effect the Board will be chaired by Ajit Patel
who will take on the role of Executive Chairman. Kirti
Patel becomes Chief Operating Officer with Rakesh Patel
continuing as Finance Director and Ajay Patel as
Marketing Director. One further appointment will be made
in the near future and, in the meantime, the Board will
continue to be supported by two Non-Executive Directors.
The process of integrating the new management structure
is expected to take approximately 15 months.
This has been a challenging year and one where the Group
has produced excellent growth. Credit must be given to
all the directors, senior managers and employees for
their contribution in making it our most successful year
so far.
Ajit Patel
Chairman & Chief Executive
June 2000
Goldshield Group Plc
Profit & Loss Account
for the year ended 31 March
2000 1999
#000 #000
Turnover 52,646 34,652
Cost of sales (12,931) (9,051)
Gross profit 39,715 25,601
Distribution costs (5,099) (4,788)
Administrative expenses (25,724)(16,120)
Operating profit 8,892 4,693
Operations 8,892 5,063
Flotation costs - (370)
Net interest 474 514
Profit on ordinary activities before 9,366 5,207
taxation
Profit before tax and exceptional item 9,366 5,577
Flotation costs - (370)
Tax on profit on ordinary activities (3,386) (2,002)
Profit for the financial year after
taxation 5,980 3,205
Operations 5,980 3,464
Flotation costs - (259)
Equity dividends (942) (483)
Profit retained for the year transferred
to reserves 5,038 2,722
Earnings per share
Basic (pence) 17.2 10.1
Diluted (pence) 16.5 9.8
Dividend per share (pence) 2.60 1.38
There were no recognised gains or losses other than the
profit for the financial year.
Goldshield Group Plc
Consolidated Balance Sheet
for the year ended 31 March 2000
2000 1999
#000 #000
Fixed assets
Goodwill 14,676 6,677
Other intangible assets 29,991 2,694
Intangible assets 44,667 9,371
Tangible assets 336 622
45,003 9,993
Current assets
Stocks 5,353 4,285
Debtors 6,409 2,067
Cash deposits - 4,928
Cash at bank and in hand 11,353 4,748
23,115 16,028
Creditors: amounts falling due within
one year (25,922)(11,647)
Net current (liabilities)/assets (2,807) 4,381
Total assets less current liabilities 42,196 14,374
Creditors: amounts falling due after
more than one year (5,489) -
Provisions for liabilities and charges (1,598) (108)
35,109 14,266
Capital and reserves
Share capital 1,810 1,609
Share premium account 20,806 5,327
Profit and loss account 12,493 7,330
Shareholders' funds 35,109 14,266
The financial statements were approved by the Board of
Directors on 16 June 2000, and signed on their behalf by:
A R Patel, Chairman
R V Patel, Finance Director
Goldshield Group Plc
Company Balance Sheet
as at 31 March 2000
2000 1999
#000 #000
Fixed assets
Investments 2,279 1
Current assets
Debtors: due in more than one year 21,824 2,121
Debtors: due within one year - 1,284
Cash deposits - 4,928
Cash at bank and in hand 26 -
21,850 8,333
Creditors: amounts falling due within
one year (671) (682)
Net current assets 21,179 7,651
Total assets less current liabilities 23,458 7,652
Capital and reserves
Share capital 1,810 1,609
Share premium account 20,806 5,327
Profit and loss account 842 716
Shareholders' funds 23,458 7,652
Goldshield Group Plc
Consolidated Cash Flow
for the year ended 31 March 2000
2000 1999
#000 #000
Net cash inflow from operating
activities 13,383 3,362
Returns on investments and servicing of
finance
Interest received 481 515
Interest paid (7) (1)
Net cash inflow from returns on
investments and servicing of financing 474 514
Taxation
UK corporation tax paid (2,715) (1,414)
Capital expenditure and financial
investment
Purchase of tangible fixed assets (170) (160)
Purchase of intangible fixed assets (22,112) (672)
Proceeds on disposal of tangible fixed
assets - 23
Net cash outflow from capital
expenditure and financial investment
Acquisitions and disposals (22,282) (809)
Purchase of subsidiary undertaking (2,278) -
Equity dividends paid (585) (499)
Management of liquid resources
Cash transfers from/(to) deposit
accounts 4,928 (2,928)
Net cash outflow before financing (9,075) (1,774)
Financing
Issue of shares 15,680 5,181
Increase in cash 6,605 3,407
END
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