RNS Number:6194V
Goldshield Group PLC
12 December 2000
FOR IMMEDIATE RELEASE 12 December 2000
GOLDSHIELD GROUP PLC
Interim Results for the Six Months Ended 30 September 2000
CONTINUED STRONG GROWTH IN ALL BUSINESS AREAS
Goldshield Group plc, the profitable, marketing-led, emerging British
pharmaceutical company, has pleasure in reporting its interim results for the
six month period to 30 September 2000.
HIGHLIGHTS
* Turnover up 39% to #32.6 million (1999: #23.4 million)
* Pre-tax profit increased by 35% to # 5.5 million (1999:
#4.1 million)
* Interim dividend 1.1p per share (1999: 0.8p)
* Diluted earnings per share increased by 29% to 9.4p
(1999: 7.3p)
* Increase in turnover attributable to:
o Increase in sales of products developed in-house
o Acquisition of business assets and products
* Pharmaceutical product sales grew by 69% to #15.8 million (1999: #9.3
million)
* Healthcare product sales grew by 19% to #16.8 million (1999: #14.1
million)
* Entry into US market achieved through two US acquisitions
* At 30 September 2000 net cash #2.5million
Commenting on the results, Ajit Patel, Executive Chairman, said:
"The last six months have been a period of consolidation within Europe and
expansion in the Rest of the World. As part of our strategy for maximising
shareholder value, it is essential that we evolve from a predominantly UK
based company to becoming a significant international force in the healthcare
and pharmaceutical product markets. We have started this process through the
recent acquisitions of two Florida based companies offering us both product
and distributor databases."
For Further Information, Please Contact:
Goldshield Group plc On 12.12.00: +44 (0) 20 7466 5000
Ajit Patel, Executive Chairman Thereafter: +44 (0) 20 8649 8500
Rakesh Patel, Finance Director
Buchanan Communications Tel: +44 (0) 20 7466 5000
Nicola How / Louise Bolton
CHAIRMAN'S STATEMENT
Introduction
During the last six months the Group has made exciting progress and as a
result it gives me great pleasure to announce Goldshield Group plc's interim
results for the six months ended 30 September 2000. Organic growth has been
strong with significant progress having been made to integrate the
acquisitions made during 1999. During the period under review we have
acquired two businesses in the US and it is our aim that these will provide us
with the springboard required to gain entry into the world's largest
healthcare and pharmaceutical market. The management changes announced earlier
in the year have progressed as expected and the Operating Board is now
functional.
Group turnover has increased by 39% to #32.6 million (30 Sep 1999: #23.4
million) and profit before tax by 35% to #5.5 million (30 Sep 1999: #4.1
million). Diluted earnings per share have increased by 29% to 9.4 pence (30
Sep 1999: 7.3 pence). As a result, and in keeping with our past practice, I am
pleased to announce an interim dividend of 1.1 pence per share (30 Sep 1999:
0.8 pence). The interim dividend will be paid on 22 January 2001 to those
shareholders on the Register on 22 December 2000.
The significant increase in the Group's turnover results from a combination of
the products developed in house and the acquisition of new products and
businesses. Sales of pharmaceutical products grew by 69% to #15.8 million (30
Sep 1999: #9.3 million): sales of healthcare products grew by 19% to #16.8
million (30 Sep 1999: #14.1 million). Sales in Western Europe, which includes
the U.K., were #28.5 million, U.S.A. and Canada were #1.8 million and the Rest
of the World were #2.3 million.
Pharmaceutical Products
Sales of pharmaceutical products grew by 69% to #15.8 million (30 Sep 1999: #
9.3 million).
In the last six months we have launched a range of niche generic
pharmaceutical products under our Forley Generics brand with initial marketing
efforts being concentrated in the U.K. This has proved successful to date and
the Group is currently looking at ways to expand these sales into selected
international markets.
We now have business partners covering the majority of Europe including
Germany, Austria, Switzerland, Holland and Belgium as well as partners in
Australia, New Zealand, Hong Kong, South Africa and various territories in the
Middle East. It is our belief that these companies will help us to achieve
our objective of increasing sales abroad by marketing existing products and
enabling us to introduce new pharmaceutical and healthcare products into these
territories. We are in discussion with potential partners and distributors
covering the remaining global territories.
With regard to products acquired from SmithKline Beecham and Procter and
Gamble during 1999, we are on target with our plan to successfully integrate
these into our core operations.
The integration of the SmithKline Beecham product acquisitions are progressing
in line with expectations, despite experiencing a few problems with the supply
of product and in obtaining the necessary transfer of product licenses.
Sales of products acquired from Procter and Gamble are also in line with
expectations and in the last six months we have additionally acquired the
rights for these products in Portugal at a cost of #2.2 million.
Finally, sales of Transidrex, Navispare and Navidrex, products acquired from
Novartis Pharmaceuticals UK Limited in March 2000, have performed in line with
budget.
Healthcare Products
Sales of our healthcare products grew by 19% to #16.8 million (30 Sep 1999: #
14.1 million).
Our long-term aim for this group of products is to build sales internationally
in targeted markets using Mail Order, Multi Level Marketing (Direct Sales) or
own Health Centres as means of distribution.
In keeping with that aim, during the last six months we have made two
significant US acquisitions which have given the Group the infrastructure and
direct sales expertise to develop the business in one of the world's largest
nutritional markets. By combining an already established business with our own
product development pipeline and management we intend to build on the sales in
the US and Canada in the medium to long term. At the same time it is our
intention to bring the knowledge and expertise introduced into the Group
through our US acquisitions to our other key markets.
The first of these US acquisitions was made on 3 July 2000 when Goldshield
acquired the direct sales and distribution businesses of Golden Pride, Inc.
and W T Rawleigh. Based in West Palm Beach, Florida, Golden Pride is a
direct sales business selling nutritional products to the US and Canadian
market place. Through the acquisition Goldshield gained immediate access to
an extensive list of distributors in the US and Canada.
The acquisition was carried out through Goldshield's US subsidiary, Goldshield
USA, Inc. for an initial cash consideration of US$8.5 million. A further sum
of up to US$12.5 million is payable in April 2002 and is dependent upon the
performance of the business during that 21 month period.
One month later, in August 2000, Goldshield announced the acquisition of
Achievers Unlimited Inc., an established Florida based business selling
nutritional products for slimming and women's health across the US. Through
this acquisition, Goldshield gained access to Achievers Unlimited's
distributor database of over 30,000 potential customers.
The acquisition, also carried out through Goldshield USA, Inc. cost the Group
a deferred, performance related maximum sum of US$9.3 million. The
acquisition involved an initial cash payment of US$512,000 for the inventory
held on 1 September 2000 and Goldshield purchased the remaining assets of
Achievers Unlimited, including its distributor database of over 30,000 names,
for a maximum sum of US$9.3 million, payable 27 months following completion.
Both these businesses are now performing in line with expectations and we
anticipate that under Goldshield's management these businesses will be
performing to their maximum potential by the end of the end of the current
financial term.
Over the last few months, Goldshield has also begun to market healthcare
products more vigorously across its key markets, excluding the UK where it
already holds a dominant position. The Regina Health brand of royal jelly
products is now selling successfully throughout the world, particularly in the
Far East. It is our intention to use these distribution channels to sell
other Group healthcare products throughout the world. We have commenced test
marketing in France recently, with initial signs being promising and I look
forward to updating you on our strategy in Europe at the year end.
The continued growth of our U.K. mail order businesses has resulted from our
successful strategies of identifying and fulfilling customer needs. Whilst
this market is now approaching maturity and facing ever increasing competition
we will continue to develop new products, recruit new customers and improve
customer relations in order to maintain and advance our dominant position in
this sector.
With the addition of two new retail outlets in Stratford-upon-Avon and
Beaconsfield we have extended our retail testing programme to a total of three
outlets. This is in line with our strategy of slowly but surely increasing our
physical presence across the UK and Europe.
Management
As announced earlier this year, we have reorganised our senior management
structure; whereby Goldshield now has separate Main Board Directors supported
by an Operational Board. This restructuring was carried out in order to
prepare for the next phase of challenges and growth. The core operating Board
of Directors consists of 12 members - five of these were recruited in the last
12 months and three were internal appointments. This Board is supported by a
maturing group of some 30 senior executives giving us a strong foundation for
future growth and expansion. The number of senior international executives is
set to increase over the next few years.
Product Development
In the six months under review research and development costs amounted to #0.5
million (30 Sep 1999: #0.2 million).
Cash Flow
At 30 September 2000 cash balances were #2.5 million (31 March 2000: #11.4
million). In the period we have invested #13.7 million on acquiring intangible
assets.
Net current liabilities at 30 September 2000 were #10.8 million (31 March
2000: #2.8 million) - #9.2 million relating to the financing of intangible
asset additions over the previous eighteen month period. Of this sum #0.2
million is due immediately, #3.5 million in December 2000 and #5.5 million in
August 2001. The majority of the #9.7 million of long term liabilities (31
March 2000: #5.5 million) relate to the estimated amounts of earn-out payable
on the North American acquisitions.
The Directors are confident that all current and future liabilities can be met
when they fall due out of the Group's operating cash flow. In addition the
Group's bankers have indicated that fund's would be made available in
appropriate circumstances.
Current Trading and Prospects
Your Board of Directors continues to believe that, in order to maximise
shareholder value, it is essential that the Group evolves from being a
predominantly UK based company to becoming a significant international force
in the healthcare and pharmaceutical products markets. Trading in the second
half continues on target, I therefore look forward to announcing further
positive results for the full year to March 2001 in June.
The new management team, product pipeline, expanding base of international
distributors and agents, new territories, US acquisitions and above all our
current sales and profits puts us in a strong position to provide our share
holders with sustained earnings per share growth for the future.
Ajit Patel
Executive Chairman
11 December 2000
Goldshield Group plc
Summarised Consolidated Profit and Loss Account for the
six months ended 30 September 2000
Six months Six months Year
ended ended ended
30 30 31 March
September September 2000
2000 2000
Notes (unaudited)(unaudited)(Audited)
#'000 #'000 #'000
Turnover
Continuing operations 30,784 23,437 52,646
Acquisitions 1 1,763 - -
32,547 23,437 52,646
Operating profit
Continuing operations 5,220 3,820 8,892
Acquisitions 1 124 - -
5,344 3,820 8,892
The operating profit is stated after
charging the following items:-
Research and Development expenditure 512 219 567
Amortisation of intangible assets 3,003 1,239 3,552
Share issued at a discount
(UITF 17) 63 150 125
Net Interest 145 235 474
Profit on ordinary activities before
taxation 5,489 4,055 9,366
Tax on profit on ordinary activities 2 (1,950) (1,522) (3,386)
Profit on ordinary activities after
taxation 3,539 2,533 5,980
Equity dividends 3 (398) (290) (942)
Profit Retained for the period 3,141 2,243 5,038
Earnings per share
Basic (pence) 4 9.8 7.6 17.2
Diluted (pence) 4 9.4 7.3 16.5
Dividend per share (pence) 3 1.1 0.8 2.6
Goldshield Group plc
Consolidated Balance Sheet as at 30 September 2000
As at As at As at
30 30 31 March
September September 2000
Notes 2000 1999
(unaudited) (unaudited) (Audited)
#'000 #'000 #'000
Fixed Assets
Goodwill 5 28,780 15,592 14,676
Other intangible assets 5 30,437 24,948 29,991
Intangible assets 5 59,217 40,540 44,667
Tangible 1,756 588 336
60,973 41,128 45,003
Current assets
Stocks 6,771 4,519 5,353
Debtors 7,517 3,864 6,409
Cash at bank and in hand 2,535 8,577 11,353
16,823 16,960 23,115
Creditors: amounts falling due within
one year (27,629) (19,441) (25,922)
Net current liabilities (10,806) (2,481) (2,807)
Total assets less current liabilities 50,167 38,647 42,196
Creditors: amounts falling due after
more than one year (9,745) (6,030) (5,489)
Provisions for liabilities and charges (2,043) (279) (1,598)
38,379 32,338 35,109
Capital and reserves
Share capital 1,810 1,810 1,810
Share premium account 20,821 20,805 20,806
Profit and loss account 15,748 9,723 12,493
Shareholders' funds 38,379 32,338 35,109
Goldshield Group plc
Consolidation Cash Flow Statement for the six months ended 30 September 2000
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2000 1999 2000
(unaudited) (unaudited) (Audited)
Notes #'000 #'000 #'000
Net cash flow from operating
activities 6 7,095 4,695 13,383
Returns on investment and
Servicing of finance
Interest received 145 235 481
Interest paid - - (7)
Net cash inflow from returns on
investments and servicing of
financing
145 235 474
Taxation
UK Corporation tax paid (145) (39) (2,715)
Capital expenditure and financial
investment
Purchase of intangible fixed assets (13,731) (19,023) (22,112)
Purchase of tangible fixed assets (1,545) (72) (170)
Net cash outflow from capital
expenditure and financial investment (15,276) (19,095) (22,282)
Acquisitions and disposal
Purchase of subsidiary undertaking - (2,278) (2,278)
Equity dividends paid (652) (296) (585)
Management of liquid resources
Cash transfers from deposit accounts - 4,928 4,928
Financing
Issues of shares 15 15,679 15,680
(Decrease)/Increase in cash 9 (8,818) 3,829 6,605
Goldshield Group plc
Statement of Total Recognised Gains and Losses and Reconciliation of Movements
in Shareholders Funds for the six months ended 30 September 2000
Statement of Total Recognised Gains and Losses
Six months Six months
ended ended Year
30 September 30 September ended
31 March
2000 1999 2000
(unaudited)(unaudited)(Audited)
Notes #'000 #'000 #'000
Profit on ordinary activities after
taxation 3,539 2,533 5,980
Current differences on foreign currency
investments 8 51 - -
Total recognised gains and losses for
the period
and total gains and losses
recognised since last financial
statement 3,590 2,533 5,980
Reconciliation of movements in shareholders' funds
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2000 1999 2000
(unaudited) (unaudited) (Audited)
Notes #'000 #'000 #'000
Profit for the period 3,539 2,533 5,980
Equity dividends (398) (290) (942)
Issue of shares 15 15,679 15,680
Share option accrued costs 7 63 150 125
Currency differences on foreign
currency
net investments 8 51 - -
Net increased in shareholders' 3,270 18,072 20,843
funds
Shareholders' funds at 1 April
2000 35,109 14,266 14,266
Shareholders' funds at 30
September 2000 38,379 32,338 35,109
Notes to the Interim Financial Statements
1. Acquisitions
Acquisitions in the period comprise the subsidiary business acquired in the
period. Golden Pride Inc. and W.T. Rawleigh from 3rd July 2000 and Achievers
Unlimited Inc. from 28th August 2000.
2. Tax on profit on ordinary activities
The tax charge for the six months has been calculated at an effective rate of
35.5% (30.9.99: 37.5%).
3. Equity dividends
The Directors have declared an interim dividend of 1.1 pence per share (1999/
00 interim dividend: 0.8 pence, 1999/00 final dividend: 1.8 pence). The
dividend will be paid on 22nd January 2001 to those shareholders on the
Register on 22nd December 2000.
4. Earnings per share
The calculation of earnings per share is based on earnings after tax of #
3,539,000 (30.9.99: #2,533,000) and on 36,203,000 (30.9.99: 33,433,000)
ordinary shares, being the weighted average number of shares in the period
ended 30 September 2000. The weighted average number of ordinary shares used
in the calculation of diluted earnings is 37,584,000 ordinary shares (30.9.99:
34,680,000).
5. Intangible fixed assets
Brand names Goodwill Total
know-how
licenses and trade marks
#'000 #'000 #'000
Cost
At 1 April 2000 32,902 17,453 50,355
Additions 2,212 15,341 17,553
At 30 September 2000 35,114 32,794 67,908
Amortisation
At 1 April 2000 2,911 2,777 5,688
Provided for the period 1,766 1,237 3,003
At 30 September 2000 4,677 4,014 8,691
Net book amount
At 30 September 2000 30,437 28,780 59,217
Net book amount
At 31 March 2000 29,991 14,676 44,667
6. Net cash inflow from operating activities
Six months Six months
ended ended Year
ended
30 30
September September 31 March
2000 1999 2000
(unaudited)(unaudited)(audited)
Notes #'000 #'000 #'000
Operating profit 5,344 3,820 8,892
Depreciation 125 87 160
Amortisation 3,003 1,239 3,552
Currency differences on foreign
currency net investments 8 51 - -
Net book value of assets written off:
- Intangible fixed assets - 133 248
- Tangible fixed assets - - 296
(Increase) in stocks (1,418) (301) (1,068)
(Increase) in debtors (1,108) (1,871) (4,342)
Increase in creditors 1,035 1,438 5,520
Share option accrued costs 7 63 150 125
Net cash inflow from operating
activities 7,095 4,695 13,383
7. Share option accrued costs
The #63,000 share option accrued cost arises in respect of a provision
relating to the employee share option scheme, being the difference between the
fair value of the shares at the date of grant of the option and the
consideration payable for the shares.
8. Currency differences on foreign currency net investments
The #51,000 currency difference on foreign currency net investments relate to
the unrealised gain made on translating the assets and liabilities of the US
subsidiaries at the period-end date.
9. Reconciliation of net cash flow to movement in net funds
Group Six
months
Six months Year
ended ended ended
30 September 30 September 31 March
2000 1999 2000
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
At 1 April 2000 11,353 9,676 9,676
Change in net funds resulting from (8,818) (1,099) 1,677
cashflows
At 30 September 2000 2,535 8,577 11,353
10. Preparation of interim statements
The interim financial statements have been prepared in accordance with
applicable accounting standards and under the historical cost convention. The
principle accounting policies of the Group are set out in the Group's 2000
annual report and financial statements. The policies have remained unchanged
from the previous annual report.
The interim statements are unaudited but have been reviewed by the auditors
and their report is set out on page 13. The comparative figures for the
financial year ended 31 March 2000 are based on the Company's statutory
accounts for that year and have been reported on by the Company's auditors and
delivered to the Registrar of Companies. The report of the auditors was
unqualified and did not contain a statement under section 237(2) or (3) of the
Companies Act 1985.
The interim statements do not constitute statutory accounts within the meaning
of section 240 of the Companies Act 1985.
11. Approval of interim statement
The interim statement was approved by the Board of Directors on 11 December
2000. Copies of this statement will be available to members of the public,
free of charge, from the Company at NLA Tower, 12-16 Addiscombe Road, Croydon,
Surrey, CR0 0XT.
Independent Review Report to Goldshield Group plc
Introduction
We have been instructed by the company to review the financial information set
out on page 1-12 and we have read the other information contained in the interim
report and considered: whether it contains any apparent misstatements or
material inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The Listing Rules
of the Financial Services Authority require that the accounting policies and
presentation applied to the interim figures should be consistent with those
applied in preparing the preceding annual accounts except where any changes,
and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999
/4 'Review of Interim Financial Information' issued by the Auditing Practices
Board. A review consists principally of making enquiries of management and
applying analytical procedures to the financial information and underlying
financial data and, based there on, assessing whether the accounting
policies and presentation have been consistently applied unless otherwise
disclosed. A review excludes audit procedures such as tests of controls and
verification of assets, liabilities and transactions. It is substantially less
in scope than an audit performed in accordance with Auditing Standards and
therefore provides a lower level of assurance than an audit. Accordingly, we do
not express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 September 2000.
GRANT THORNTON
CHARTERED ACCOUNTANTS
LONDON
11 December 2000
Goldshield (LSE:GSD)
Historical Stock Chart
From Jun 2024 to Jul 2024
Goldshield (LSE:GSD)
Historical Stock Chart
From Jul 2023 to Jul 2024
