Final Results

 

TIDMROM 
 
RNS Number : 1039E 
Romag Holdings PLC 
15 December 2009 
 

 
 
 
 
 
 
ROMAG HOLDINGS PLC 
Preliminary results for the year to 30 September 2009 
 
 
Romag Holdings plc, a specialist manufacturer of glass and plastic composites 
for renewable energy, security, transport and architectural applications, 
announces its preliminary results for the year to 30 September 2009. 
 
 
15 December 2009 
 
 
YEAR IN BRIEF 
 
 
In a year of unprecedented economic and financial turmoil, Romag reports the 
following: 
 
 
Results 
 
 
  *  Group revenue GBP19.7m (2008 - GBP33.6m) 
 
 
 
  *  Trading loss for the year GBP1.0m (2008 - Profit GBP4.3m) 
 
 
 
  *  GBP2.7m profit on disposal of currency hedging contracts no longer required 
 
 
 
  *  Pre-tax profit GBP1.1m (2008 - GBP3.7m) 
 
 
 
  *  Earnings per share 1.5p (2008 - 5.1p) 
 
 
 
Developments 
 
 
  *  Bank facilities extended and renewed demonstrating excellent working 
  relationship with Lloyds Banking Group 
 
 
 
  *  UK government launch of feed-in tariff scheme for electricity generated from 
  renewable sources to be implemented in April 2010 
 
 
 
  *  Five year, mutually exclusive agreement entered into to supply bespoke PowerGlaz 
  products to Kingspan, a global leader in environmental building products 
 
 
 
  *  PowerPark product launched to provide "green" electricity for recharging 
  electric cars 
 
 
 
  *  Memorandum of understanding signed with British Gas to market, distribute and 
  install PowerPark in the UK 
 
 
 
  *  Three-year framework agreement with British Gas for supply of certain PowerGlaz 
  products being finalised 
 
 
 
 
 
Chairman, John Kennair, said 
 
 
"With continued difficult market conditions, particularly in the first nine 
months, trading this year was very challenging. In line with wider market 
trends, we have seen a marked decline in demand and pricing for our PV products 
and have also experienced a slump in demand for architectural glass. However, as 
we typically see in times of recession, and as anticipated by management, sales 
to the specialist transport market have grown in 2009. 
 
 
Looking forward, we are seeing increasingly positive signs that both the PV and 
construction markets are starting to show signs of recovery. During the final 
quarter of 2009 and even more so since the year end, we have experienced an 
increase in the number of identified opportunities and have witnessed 
significant price stabilisation in the PV markets. The new products developed by 
Romag throughout the year and the agreements with Kingspan and British Gas 
announced today lead the directors to believe that Romag is well-positioned to 
take advantage of the market recovery in 2010 and beyond." 
 
 
 
 
 
 
 
 
 
 
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| ENQUIRIES                            |                                            | 
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|                                      |                                            | 
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| Romag Holdings plc                   |                                            | 
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| Lyn Miles, Chief Executive           | Today only:    0207 012 2000               | 
+--------------------------------------+--------------------------------------------+ 
| David Banks, Finance Director        | After today:    01207 500000               | 
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|                                      |                                            | 
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| Arbuthnot Securities Limited         |                                            | 
+--------------------------------------+--------------------------------------------+ 
| Antonio Bossi                        | Tel:    [phone]                      | 
+--------------------------------------+--------------------------------------------+ 
| Tom Griffiths                        |                                            | 
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|                                      |                                            | 
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|                                      |                                            | 
+--------------------------------------+--------------------------------------------+ 
| Kreab Gavin Anderson                 |                                            | 
+--------------------------------------+--------------------------------------------+ 
| Ken Cronin                           | Tel:    [phone]                      | 
+--------------------------------------+--------------------------------------------+ 
| Michael Turner                       |                                            | 
+--------------------------------------+--------------------------------------------+ 
 
 
 
 
 
 
Note to editors: 
 
Romag Holdings plc is a leading manufacturer of glass and plastic composites 
based in Consett, County Durham. Romag has developed a range of photovoltaic 
glass products (PowerGlaz) for use in the generation of renewable energy. 
 
 
Romag also manufactures a wide range of products for the security, transport and 
architecture markets to protect people against a variety of risks and threats. 
Businesses using the group's high-impact glass products include BAA, Securicor, 
government departments, banks, building societies and train operators. 
  CHAIRMAN'S STATEMENT 
 
 
The economic recession has significantly impacted on trading in the year to 30 
September 2009. In particular, the solar photovoltaic (PV) market has seen a 
downturn in both demand and pricing, leading to a substantial reduction in sales 
of the group's PowerGlaz products. 
 
 
The final quarter of the financial year saw some recovery in PV demand and 
stabilisation in pricing and this has continued since the year end. 
 
 
Results 
 
 
Sales at GBP19.7m (2008 GBP33.6m) fell by 41% over last year. Group operating 
profit was GBP1.77m (2008 GBP4.35m). 
 
 
As announced with the half-year results, lower trading margins were exacerbated 
by a one-off provision of GBP0.9m relating to the write-down of certain finished 
goods inventories. This provision was required due to the rapid decline in 
prices in the solar PV market in the first few months of 2009. 
 
 
On a positive note, the group was able to dispose of its currency hedging 
contracts at a profit of GBP2.72m, resulting in pre-tax profits of GBP1.08m 
(2008 GBP3.73m) and earnings per share of 1.5p (2008 5.1p). 
 
 
Trading 
 
 
The unprecedented conditions in financial markets have led to the greatest 
volatility I have ever experienced in business. The group's underlying 
technology and products are amongst the leaders in their fields and this has 
provided some defence against this volatility. Action was also taken to reduce 
costs. These included renegotiation of material input prices and laying off 
approximately seventy employees, some of whom have been re-engaged as business 
has picked up. 
 
 
Market changes have also led to a switch in the geographic spread of the group's 
sales. Sales in the UK grew by 61% over last year and accounted for 53% of total 
sales (2008 19%). 
 
 
PowerGlaz 
 
 
The difficulties in the financial markets led to a reduction in project finance 
available to customers and consequently the delay and cancellation of a number 
of contracts, leading to a fall in PowerGlaz sales of 55% over last year. 
However, in recent months we have seen some recovery in demand for product from 
the UK and mainland Europe, which in part has been led in the UK market by the 
announcement this year of the introduction of feed-in tariffs which will 
commence in April 2010. This is providing a boost for the UK market, bringing it 
into line with mainland Europe. 
 
 
During the course of the year the group has received its first, albeit small, 
orders from the Middle East and developed a new infrastructure product 
(PowerPark) to provide green electricity for recharging electric vehicles. 
 
 
We are close to finalising a three year framework agreement with British Gas 
Trading (a division of Centrica plc) for the supply of certain PowerGlaz 
products throughout the UK and, in addition, a memorandum of understanding has 
been signed for British Gas to distribute and install PowerPark in the UK on an 
exclusive basis. 
 
 
We are particularly pleased to announce that we have also entered into a 
mutually exclusive, five-year trading arrangement with Kingspan Limited (a 
subsidiary of Kingspan Group plc) to supply custom-designed PowerGlaz products 
for use in their projects. Kingspan are global leaders in the design, 
manufacture and supply of sustainable, high performance, insulated roof, wall 
and façade panel systems. 
 
Architectural and specialist transport 
 
 
Our experience in the past is that the demand for security-related products 
grows in times of recession and this certainly has been the case during 2009. 
Consequently, sales to the specialist transport market grew by 13% in the year. 
Unfortunately, this was more than offset by market conditions in the 
construction sector, which resulted in a reduction of 17% in sales to the 
architectural market. Nevertheless, the group has been specified for a number of 
major projects in the UK. 
 
 
Cash and gearing 
 
 
The group maintains an excellent relationship with its principal bankers, Lloyds 
Banking Group. Banking facilities were renewed and extended during the year, 
including an extension of the revolving credit facility (GBP15.0m, formerly 
GBP10.0m) until April 2012. 
 
 
The cancellation and deferral of a number of PV projects lead to a substantial