RNS Number:4388J
Straight PLC
26 September 2006
26 September 2006
STRAIGHT PLC
Interim results announcement for the six months
ended 30 June 2006
Pre-tax profits up 42%
Earnings per share up 43%
Strong organic growth
Straight plc, the Leeds-based supplier of recycling containers which is listed
on AIM, today 26 September announces its interim results for the six months
ended 30 June 2006.
Highlights:
- Pre-tax profits #1.15m : an increase of 42%
- Earnings per share 6.6p : an increase of 43%
- Dividend declared 1.2p per share : an increase of 20%
- Continued and strong organic profitability growth across the business
Commenting on the results, James Newman, Chairman of Straight, said: "The first
half of the year was yet another period of significant progress in many areas of
our business".
Mr Newman said: "As environmental issues remain high on the Government's agenda,
the Company continues to thrive with demand for the Company's products and
services, especially water saving products, remaining high. The second half of
the year will bring even more progress."
For further information contact:
James Newman/Jonathan Straight - 0113 245 2244 or 07850 672727
Panmure Gordon: Andrew Godber/Katherine Roe - 0207 459 3600
Simon Mountford Communications:
Simon Mountford/Alison Crawford - 01904 520162
Chairman's Statement
I am pleased to report yet another period of significant progress in many areas
of our business. Whilst the first half of the year did present a number of
challenges for the Company, we have emerged into the second half much stronger,
having gained footholds in a number of new markets. At the same time we have
succeeded in delivering improved financial performance.
Results
A change in our sales mix resulted in turnover of #12.6 million being 10% lower
than last year. However, a reduced proportion of sales of wheeled-bins and a
doubling of our fulfilment activities and contact centre work, did result in an
overall increase in profitability. Our new product ranges, with higher unit
margins, have exceeded expectations.
Due to this more profitable sales mix, gross margins improved from 15.4% to
23.2%.
Satisfying the demands posed by the substantial increase in sales of our water
saving product range was not without challenges. Some additional costs were
incurred as the Company strived to maintain deliveries and customer service
levels during the periods of peak activity.
Additional operating costs were also incurred in recruiting key management and
staff, who will be needed for our next phase of business growth. Investments
were also made in IT and product development, the main benefits of which will be
felt in future years.
Profit before tax increased by 42% to #1.15 million and basic earnings per share
by 43% to 6.6p, both excellent achievements.
Dividend
The Board has declared a 20% increase in the interim dividend to 1.2p per share
(2005: 1.0p). This is payable on 15 December 2006 to shareholders on the
register at 17 November 2006.
Strategic Developments
As the business continues to grow, the challenges grow with it. Considerable
work is ongoing in delivering service improvements, making us more efficient and
better able to meet our customers' demands.
We have now created a base where new products can be developed, prototyped and
then launched rapidly to market. It has also created a framework where
acquisitions can be rapidly integrated into the business model as has been
proven with the Cloudburst acquisition.
As environmental issues remain high on the Government's agenda, the Company
continues to thrive. Further opportunities are being considered with a view to
achieving both organic growth and expansion through acquisition.
Outlook
Demand for the Company's products and services remains high, especially for
water saving products. The Materials Handling Division is building up a healthy
order book for the second half of the year and into 2007. The Board is confident
that the second half of the year will bring even more progress.
James H Newman
Chairman
26 September 2006
Operating Review
Core Markets
Sales of kerbside containers have remained strong. Many of our customers now
order smaller top-up quantities and this has helped to drive profitability
forward.
Key contracts were secured including the supply of wheeled bins and kerbside
boxes to Councils such as Kettering and Manchester City. In addition, our
success in an e-tender run by the Eastern Shires Purchasing Organisation
resulted in orders of more than 100,000 wheeled bins.
Of particular note was a contract to supply SITA with 150,000 sets of caddies
for a kitchen waste recycling scheme in Bristol. Using a combination of a 5
litre kitchen caddy and 25 litre kerbside caddy, the system had been proven in
neighbouring Somerset and is now attracting interest from other areas.
New and generally more profitable products have also achieved market success.
Our kitchen composter was a hit in Doncaster where 12,000 units were delivered
and our new wheeled bin inner caddy led to an order from Bradford City Council
for an initial 30,000 units and the expectation of substantial further business
in the future.
Garden products - Cloudburst acquisition
Based on sales in the first half of 2006, it is fair to say that this has been
the year of the water butt. Sales in the first half were more than 200% higher
than in 2005, driven by water shortages and hosepipe bans in the south of the
country.
The Board's foresight in approving the acquisition of the Cloudburst brand in
January ensured that we were well placed to get product into retail markets as
demand increased. The new division set up to deal with the garden trade has had
great success both with existing Cloudburst customers as well as new accounts.
Direct sales activity
Our mail order activity in partnership with both water companies and councils,
has run at record levels. This applied to compost bins as well as water butts,
driven by our ability to promote subsidised units across a number of campaigns.
It is fair to say that we did not anticipate demand being quite as high as it
was, and this did cause some short-term operational issues. Having promptly
dealt with these matters, the business is now stronger and better positioned to
deal with such demand peaks going forward.
Materials Handling
We completed the supply of 93,000 nest/stacking containers to FKI Logistex.
These were specially designed for automated handling within a warehouse
environment and have generated key interest with other systems integrators.
Further to many months of work with FKI Logistex we were able to announce a #2.5
million contract to supply specialist load handling containers for the new
British Library facility in Yorkshire. This prestigious contract gives us a
strong position within a niche market that is likely to show significant growth
in the future.
Another contract with a major supermarket chain has further enhanced our
position in the market place.
Jonathan M Straight
Chief Executive
26 September 2006
Unaudited Consolidated Profit and Loss Account
For the 6 months ended 30 June 2006
Half year to Half year to Year ended
30 June 2006 30 June 2005 31 Dec 2005
Restated Restated
Notes #'000 #'000 #'000
Turnover 12,564 14,019 24,343
Cost of sales (9,647) (11,867) (20,243)
_____ _____ _____
Gross profit 2,917 2,152 4,100
Operating expenses (1,658) (1,191) (2,275)
_____ _____ _____
Operating profit before goodwill 1,259 961 1,825
amortisation and reorganisation costs
Goodwill amortisation (144) (144) (289)
Reorganisation costs - (60) (153)
Amortised cost of share option (26) (15) (38)
schemes
_____ _____ _____
Operating profit 1,089 742 1,345
Interest receivable 58 68 125
_____ _____ _____
Profit on ordinary activities before 1,147 810 1,470
taxation
Taxation 3 (395) (304) (547)
_____ _____ _____
Profit for the financial period 752 506 923
_____ _____ _____
Basic earnings per share (p) 4 6.6 4.6 8.3
Diluted earnings per share (p) 5 6.4 4.6 8.1
Headline earnings per share (p) 6 8.1 6.7 12.6
Unaudited Consolidated Balance Sheet
At 30 June 2006
30 June 30 June 31 December
2006 2005 2005
Restated Restated
#'000 #'000 #'000
Fixed assets
Tangible fixed assets 1,171 850 882
Intangible fixed assets 5,431 5,635 5,490
_____ _____ _____
6,602 6,485 6,372
Current assets
Stocks 542 637 415
Debtors 6,182 4,278 5,489
Cash at bank and in hand 5,139 4,336 2,036
_____ _____ _____
11,863 9,251 7,940
Creditors: amounts falling due within (9,022) (7,141) (5,364)
one year
_____ _____ _____
Net current assets 2,841 2,110 2,576
Total assets less current liabilities 9,443 8,595 8,948
Provisions for liabilities and charges (37) (11) (37)
_____ _____ _____
Net assets 9,406 8,584 8,911
_____ _____ _____
Capital and reserves
Called up share capital 113 113 113
Share premium account 5,827 6,572 5,827
Merger reserve 744 - 744
Profit and loss account 2,722 1,899 2,227
_____ _____ _____
Equity shareholders funds 9,406 8,584 8,911
_____ _____ _____
Unaudited Consolidated Cash Flow Statement
For the 6 months ended 30 June 2006
Half year to Half year to Year ended
30 June 2006 30 June 2005 31 Dec 2005
#'000 #'000 #'000
Net cash inflow/(outflow) from 3,879 1,416 (160)
operating activities
Returns on investments and servicing of
finance
Interest received 58 44 125
_____ _____ _____
Net cash inflow from returns on 58 44 125
investments and servicing of finance
Taxation - - (514)
Capital expenditure
Purchase of intangible fixed assets (85) - -
Purchase of tangible fixed assets (466) (279) (457)
Sale of tangible fixed assets - 4 4
_____ _____ _____
Net cash outflow from capital (551) (275) (453)
expenditure
Net cash outflow from acquisitions - (4,362) (4,362)
Equity dividends (283) (110) (222)
Management of liquid resources
Increase in short term deposits (1,500) (1,500) -
_____ _____ _____
Net cash inflow/(outflow) before 1,603 (4,787) (5,586)
financing
Financing
Issue of share capital - 5,000 5,000
Costs of share issue - (292) (293)
_____ _____ _____
Net cash inflow from financing - 4,708 4,707
_____ _____ _____
Increase/(decrease) in cash 1,603 (79) (879)
_____ _____ _____
Reconciliation of operating profit to net cash inflow from operating
activities
Operating profit 1,115 757 1,383
Depreciation 178 111 256
Goodwill amortisation 144 144 289
(Profit)/loss on sale of fixed assets - (4) (4)
(Increase)/decrease in stock (127) (107) 115
Increase in debtors (693) (1,084) (2,320)
Increase in creditors 3,262 1,599 121
_____ _____ _____
Net cash inflow/(outflow) from 3,879 1,416 (160)
operating activities
_____ _____ _____
Reconciliation of net cash flow to movement in net
funds
Increase/(decrease) in cash in period 1,603 (79) (879)
Purchase of short term deposits 1,500 1,500 -
Net funds at beginning of period 2,036 2,915 2,915
_____ _____ _____
Net funds at end of period 5,139 4,336 2,036
_____ _____ _____
Notes
1. The financial information set out in this interim report
does not constitute statutory accounts as defined in section 240 of the
Companies Act 1985. The figures for the year to 31 December 2005 have been
extracted from the audited financial statements of Straight plc. These
financial statements received an unqualified audit report and have been filed
with the Registrar of Companies.
2. The interim financial statements have been prepared on the
same basis and using the same accounting policies as used in the full financial
statements for the year ended 31 December 2005, except that FRS20, "Share Based
Payments" has been adopted. Prior period figures have been restated as
appropriate. The interim financial statements have been approved by the Board
and are unaudited.
3. Taxation has been provided at the estimated effective rate
of 30% (6 months ended 30 June 2005: 30%; 12 months ended 31 December 2005 30%).
4. Basic earnings per share is calculated on the basis of the
profit for the period after tax divided by the weighted average number of shares
in issue in the period of 11,326,827. The comparatives are calculated by
reference to the weighted average number of shares in issue in the 6 months
ended 30 June 2005 of 10,886,963 and the 12 months to December 2005 of
11,096,585.
5. Diluted earnings per share is calculated on the basis of
profit for the period after tax divided by the weighted average number of shares
in issue plus the weighted average number of shares which would be issued if all
options granted were exercised. The addition to the weighted average number of
ordinary shares used in the calculation of diluted earnings per share is 390,763
(30 June 2005: 220,844; 31 December 2005: 303,771).
6. Headline earnings per share is calculated on the basis of
the adjusted profit for the period, defined as the profit for the financial
period before the effects of goodwill, share based payments and re-organisation
costs after tax, divided by the weighted average number of shares in issue in
the period of 11,326,827. The headline earnings per share figure reflects our
recurring trading profitability. The comparatives are calculated by reference
to the weighted average number of shares in issue in the 6 months ended 30 June
2005 of 10,886,963 and the 12 months to December 2005 of 11,096,585.
7. An interim dividend of 1.2p per share (2005 interim: 1.0p,
2005 final: 2.5p) has been recommended and is payable on 15 December 2006 to
shareholders on the register at 17 November 2006.
8. This statement is being sent to the shareholders of the
Company and will be available at the Company's registered office at 31 Eastgate,
Leeds, LS2 7LY.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR MGGZLVKVGVZM
Straight Plc (LSE:STT)
Historical Stock Chart
From Jun 2024 to Jul 2024
Straight Plc (LSE:STT)
Historical Stock Chart
From Jul 2023 to Jul 2024
