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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Wellington Hds. | LSE:WLN | London | Ordinary Share | GB0009473900 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.00 | - |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:0055X
Wellington Holdings PLC
29 March 2004
For Immediate Release 29 March, 2004
WELLINGTON HOLDINGS PLC
Preliminary Results for the year ended 31 December, 2003
Sales up 3.3%; Operating Profit up 2.2%*;
Maintained Full Year Dividend of 6.5p per share.
Wellington Holdings plc., the manufacturer and distributor of specialist polymer
seals for engineering and industrial applications worldwide, today announces
preliminary results for the year ended 31st December 2003. Results show an
increase in turnover and operating profits*, whilst margins remain satisfactory
at over 12%.
Commenting on the Group's performance, Chairman, Brian Kent said: -
"Improved sales and order levels reported on our interim announcement continued
in the second half. Operating Profit for the second half of the year is the
highest for two years."
Financial Highlights
2003 2002
Turnover #31m #30m
Operating Profit* #3.8m #3.7m
Profit before Tax #1.9m #2.8m
Earnings per share* 9.6p 9.7p
Dividend per share 6.5p 6.5p
Interest cover* 5.6x 4.9x
Margins at a creditable 12.2%*
Operating highlights:
1. Highest order book for 3 years.
2. Sales growth throughout our key market segments.
3. Operating Profit for H2 up 17% on first half of year.
4. Cost base reduced in both UK and USA.
5. Interest cover up to 5.6x*.
6. Net debt reduced.
* Before goodwill amortisation and exceptional items.
Commenting on the outlook, Mr. Kent added:
"The Group's cost base is now much reduced from previous years and the coming
streamlining of our slimmer UK manufacturing facility will complete this
substantial rationalisation and modernisation process. The year 2004 has started
very well with our order book strongly ahead of last year and results to date
materially ahead of plan. Despite the present adverse U.S. dollar exchange rate
we confidently expect to grow this year as the lower cost base, higher market
activity and operational gearing feed through to the bottomline."
For Further information contact:
Brian Kent, Chairman 020 8941 3774
Chris Wilkins, Group Chief Executive 020 8941 3774
David Hardy/Paul Vann, Binns & Co. 020 7786 9600
or visit the Wellington website: - www.wellingtonholdings.com
Chairman's Statement
Improved sales and order levels reported on our interim announcement continued
in the second half with sales up 3.3% to #31m (2002: #30m). We finished the year
with our highest order book for threeyears at over #6m.
Operating Profit, before goodwill amortisation and exceptional items, increased
by 2.2% to #3.8m (2002: #3.7m) with operating margins remaining strong at 12.2%,
despite adverse currency fluctuations which reduced sales by #300k and operating
profit by #100k compared with 2002.
Operating profit, before goodwill amortisation and exceptional items, recovered
well in the second half of the year and is the highest for two years at #2.05m
(H1 #1.75m).
The results thisyear include the exceptional costs (#1053k) addressed in our
interim statement, due to the rationalisation of the Hallite Seals operating
unit in Fort Wayne, Indiana, and the Dynamic Seals subsidiary into a single
Fluid Power Centre in Troy, Michigan, severance costs to produce a lean top
management structure, as well as those identified in the Annual Report for 2002.
After these exceptional costs, the profit before tax for the year is #1.9m
(2002: #2.8m).
Earnings per share, before goodwill amortisation and exceptional items, at 9.57p
were down on the 9.65p recorded in 2002 due to the higher tax charge of 27.5%
compared to the unusually low 24.1% in 2002. Earnings per share after goodwill
amortisation and exceptional items were 5.84p(2002: 8.87p).
Markets
Our business was organised during the year into two main groups, Fluid Power and
Process. Fluid Power includes the Energy, Mobile and Automation markets served
by the Hallite and Dynamic subsidiaries; Process serves the Oil and Gas markets
through the CDI and Polytek subsidiaries. Fluid Power accounts for 64% of Group
Sales (2002: 63%) and increased by 4.6% over 2002. Although sales to the Mining
industry fell significantly compared to 2002, this was more than compensated for
by the Automation market which was strong and grew by 15% year on year.
Process, which is 36% of Group Sales (2002: 37%), increased sales by 1.5% in
2003. Our Houston-based CDI Polytek increased sales by 12%, at constant exchange
rates, and we enjoyed excellent growth in Canada and Europe. The increase in
this business was particularly encouraging in the second half, as the Baker
Hughes Rig Count Index rose, and has continued to rise in the first quarter of
2004 back towards its record highs in 2001.
Geographical
Sales were impressively strong in Germany throughout the year, with sales up 10%
at constant exchange rates, despite their weak economy. Asia Pacific continued
to grow, up 6.4%. Exports from our UK production unit grew and now sales to this
region represent 6% of Group turnover (up 8% from 2002). PH Seals in Adelaide,
South Australia, was acquired at the beginning of 2004 and will enhance our
coverage of the Australian market.
North America represents 47.1% (48.2%) of Group Sales, UK 16.8% (17.9%), Europe
20% (18.1%) and Asia Pacific 16.1% (15.6%).
Balance Sheet
Capital expenditure at #1.1m was marginally below depreciation, reflecting the
increased capacity installed in previous years. Interest cover, before goodwill
amortisation and exceptional items, improved to a robust 5.6 times (2002: 4.9
times), whilst operating cash flow ratios continue to improve. Rotation of
working capital increased to 5.3 times (2002: 5.0 times). Despite #1m of
exceptional costs the Group's debt position improved in the period and gearing
moved to 113% (2002: 118%). The Board and Senior Management remain focused on
maximising cash flows.
Site Negotiations
Negotiations concerning the sale of the Hampton site, as announced in our
Interim Results, are almost finalised and we will be able to publish the details
in the next few weeks. At this stage it is clear that the overall final terms
will be no less favourable than those reportedat the time of the interim
announcement.
Pension Fund
We are advised that the Pension Fund MFR funding level remained substantially
unchanged (MFR funding level at 92%).
Dividend
The Board has decided to recommend a maintained final dividend of 4.3p per share
to be paid on 28 May 2004 to shareholders on the register at the close of
business on 13 April 2004, making 6.5p for the year (2002: 6.5p).
Employees
The world of engineering manufacturing is not an easy one around the world in
these turbulent times but dedicated employees and committed management have once
again underpinned our achievements.
The Board of Directors thanks them for their efforts, without which the future
of the company would undoubtedlybe less secure.
Corporate Governance
The Board has continued its detailed attention to risk management and the
requirements of the Combined Code and is satisfied that the Company has in place
all the requisite procedures appropriate for a Company of its size. The Board
has noted the contents and subsequent debate on the Higgs Report and will
carefully consider its recommendations during the coming year. However, the
Company has a small effective Board with a majority of non-executives and the
roles of Chief Executive and Chairman separated.
Future
The Group's cost base is now much reduced from previous years and the coming
streamlining of our slimmer UK manufacturing facility will complete this
substantial rationalisation and modernisation process.
The year 2004 has started very well with our order book strongly ahead of last
year and results to date materially ahead of plan.
Despite the present adverse U.S. dollar exchange rate we confidently expect to
grow this year as the lower cost base, higher market activity and operational
gearing feed through to the bottom line.
B.H. Kent
Chairman
Consolidated profit and loss account
For the year ended 31 December 2003
Note 2003 2003 2002 2002
#000 #000 #000 #000
Turnover 31,001 30,009
Cost of sales (18,313) (17,127)
-------- --------
Gross profit 12,688 12,882
Distribution costs (3,389) (3,345)
Administrative expenses (6,704) (6,010)
-------- --------
Operating profit before
goodwill
amortisation
------- -------
and exceptional costs 3,795 3,713
Goodwill amortisation (147) (186)
Exceptional costs 2 (1,053)-
------- -------
Operating profit 2,595 3,527
Interest receivable - 2
Interest payable and similar (682) (761)
charges
-------- --------
Profit on ordinary activities
before taxation 1,913 2,768
Tax on profit on ordinary (527) (668)
activities
-------- --------
Profit on ordinary activities
after taxation and for the
financial year 1,386 2,100
Dividend paid and proposed 3 (1,545) (1,541)
-------- --------
Retained (loss)/profit for the (159) 559
year
===== =====
Earnings per share
Basic 4 5.84p 8.87p
Basic pro-forma 5 9.57p 9.65p
Diluted 5.80p 8.86p
Consolidated statement of total recognised gains and losses
For the year ended 31 December 2003
Note 2003 2002
#000 #000
Profit forthe financial year 1,386 2,100
Curency translation differences on foreign
currency net investments 279 (23)
-------- --------
Total gains and losses recognised since last
annual report 1,665 2,077
===== =====
Consolidated balance sheet
at 31 December 2003
Note 2003 2003 2002 2002
#000 #000 #000 #000
Fixed assets
Intangible assets 2,299 2,720
Tangible assets 10,364 10,754
-------- --------
Current assets 12,663 13,474
Stocks 4,922 4,462
Debtors 5,853 5,242
Cash at bank 961 653
-------- --------
11,736 10,357
Creditors: amounts
falling due within one
year (8,877) (6,878)
-------- --------
Net current assets 2,859 3,479
-------- --------
Total assets less 15,522 16,953
current liabilities
Creditors: amounts
falling due after more
than one year (6,640) (8,122)
Provisions for (369) (484)
liabilities and
charges
-------- --------
Net assets 8,513 8,347
===== =====
Capital and reserves
Called up share 2,377 2,369
capital
Share premium account 3,214 3,176
Capital redemption 1,569 1,569
reserve
Profit and loss 1,353 1,233
account
-------- --------
Equity shareholders' 8,513 8,347
funds
===== =====
Consolidated cash flow statement
For the year ended 31 December 2003
Note 2003 2003 2002 2002
#000 #000 #000 #000
Net cash inflow from
continuing operating
activities 3,263 3,813
Returns on investments
and servicing of
finance
Interest received - 2
Interest paid (668) (720)
Finance lease interest (14) (36)
paid
-------- --------
Net cash outflow from
returns on investment and
servicing of finance (682) (754)
Taxation
Tax paid - UK (137) (279)
- Overseas (310) (536)
-------- --------
Tax paid (447) (815)
Capital expenditure and
financial investment
Additional acquisition - (890)
consideration
Purchase of concessions,
licenses and patents (43) (68)
Purchase of tangible (1,115) (1,307)
fixed assets
-------- --------
Net cash outflow from
capital expenditure and
financial investment (1,158) (2,265)
Equity dividends paid (1,542) (1,538)
-------- --------
Net cash (outflow)/inflow
before financing (566) (1,559)
Financing
Share capital issued 46 24
Increase in borrowings - 1,699
Repayment of amounts (417) -
borrowed
Capital element of
finance lease rental
payments (248) (21)
-------- --------
Net cash (outflow)/inflow (619) 1,702
from financing
-------- --------
(Decrease)/increase in (1,185) 143
cash in the year
===== =====
Note
Reconciliation of net cash flow to movement in net debt
For the year ended 31 December 2003
Note 2003 2003 2002 2002
#000 #000 #000 #000
(Decrease)/increase in (1,185) 143
cash in the year
Cash outflow/ (inflow)
from debt and lease
financing 665 (1,678)
-------- --------
Change in net debt
resulting from cash
flow (520) (1,535)
Translation difference 784 616
Net debt at beginning of (9,888) (8,969)
year
-------- --------
Net debt at end of (9,624) (9,888)
year
===== =====
Reconciliation of operating profit to net cash inflow from operating activities
2003 2002
#000 #000
Operating profit 2,595 3,527
Depreciation and amortisation 1,483 1,516
(Increase) instocks (460) (157)
(Increase) in debtors (611) (59)
Increase/(Decrease) in creditors 256 (804)
Movement in provisions - (210)
-------- --------
Net cash inflow from operating activities 3,263 3,813
===== =====
Notes:
1. The report and accounts have been prepared under the accounting policies set
out in the last annual report. The financial information set out above does
not constitute the company's statutory accounts for the years ended 31
December 2003 or 2002. The financial information for 2002 is derived from
the statutory accounts for 2002 which have been delivered to the Registrar
of Companies. The auditors have reported onthe 2002 accounts; their report
was unqualified and did not contain a statement under Section 237(2) or (3)
of the Companies Act 1985. The statutory accounts for 2003 will be finalised
on the basis of the financial information presented by the directors in this
preliminary announcement and will be delivered to the Registrar of Companies
following the company's Annual General Meeting.
2. The Exceptional Costs relate to the combining of the Hallite Sales Unit in
FortWayne, Indiana, into a Fluid Power Centre based in Detroit, and senior
management severance costs to produce a flatter top management structure.
Both initiatives were announced at the Group's preliminary announcement in
March 2003, and compensation for resignation of Wellington Main Board
Directors reported in the Annual Report for 2002.
3. The final ordinary dividend of 4.3p net per share will be paid on 28 May 2004
to shareholders registered on 13 April 2004 subject to shareholders'
approval at the Annual General Meeting to be held on 26 May 2004. An interim
dividend of 2.2p net was paid on 30 November 2003.
4. Earnings per share have been calculated by reference to the average number of
ordinary shares of 10p each in issue in the period being 23,731,094 and on
the profit after taxation.
5. The pro-forma earnings per share is calculated after eliminating the goodwill
amortisation, the exceptional costs and the tax effects thereon. The
directors believe that the earnings per share calculated by adjusting for
the above gives a more meaningful indication of the Group's underlying
performance.
6. In the period the company issued 72,500 ordinary shares of 10p each arising
from an exercise of share options at exercise prices of 62.5p and 63p. This
resulted in an increase in shareholder funds of #45,362.
7. It is expected that the Annual Report and Accounts will be posted to
shareholders notlater than 27 April 2004. Further copies may be obtained
upon request from the Company Secretary at 130 Oldfield Road, Hampton,
Middlesex TW12 2HT, and can be viewed on the company's website:
www.wellingtonholdings.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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