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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Molins | LSE:MLIN | London | Ordinary Share | GB0005991111 | ORD 25P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 157.00 | 156.00 | 158.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:2628P
Molins PLC
02 September 2003
2 SEPTEMBER 2003 FOR IMMEDIATE RELEASE
International Specialist Engineers
Further progress with increase of 13% in underlying earnings per share
6 months 6 months 12 months
to 30 June to 30 June to 31 Dec
2003 2002 2002
Turnover #51.9m #48.6m #106.0m
Operating profit (before pension credit & goodwill) #5.3m #4.5m #10.5m
Profit before tax #4.9m #5.5m #12.7m
Profit after tax #3.2m #3.8m #8.6m
Net debt #8.3m #8.9m #4.7m
Underlying earnings per share (before pension credit & goodwill) 19.4p 17.1p 37.5p
Basic earnings per share 17.7p 20.9p 46.8p
Dividend per share 4.6p 4.0p 11.0p
Highlights from the 2003 interim results
* Operating profit increased 18% to #5.3m
* Turnover and profit improvement in both divisions
* Growth in underlying earnings per share from 17.1p to 19.4p
* Interim dividend increased by 15% to 4.6p per share
* Sasib S.p.A. purchased in August 2003
Peter Byrom, Chairman, commented:
"Progress was achieved in both divisions in the first half of the year. The
order book in the Tobacco Machinery division supports further progress in the
second six months of the year. The Packaging Machinery businesses continue to
experience difficult trading conditions but development of their products and
improved internal processes are helping to maintain profitable trading
performance. Sasib provides further opportunities for the Company to grow.
"Overall, the Company is trading broadly in line with our expectations for the
year as a whole."
Enquiries: Molins PLC
Tel: 020 7638 9571
Peter Byrom, Chairman
David Cowen, Group Finance Director
Issued by: Citigate Dewe Rogerson
Tel: 020 7638 9571
Margaret George
CHAIRMAN'S STATEMENT
Progress was achieved in both divisions in the first half of the year.
Sales in the six months to 30 June 2003 increased by 7% to #51.9m (2002:
#48.6m). Operating profit, before net pension credit and goodwill amortisation,
increased by 18% from #4.5m to #5.3m. Underlying earnings per share increased
from 17.1p to 19.4p, an increase of 13% and basic earnings per share were 17.7p.
The assumptions used for pension accounting have been revised to reflect current
circumstances more closely. As a result, there is a #nil net pension credit,
compared with a #1.5m net credit reported in the first six months of 2002.
Reported profit before tax was #4.9m, which compares with #4.0m in the first six
months of 2002 before the net pension credit and #5.5m after the net pension
credit.
The effective rate of tax, including deferred tax, was 34%, against 31% in the
comparable period last year. Profit after tax in the period was #3.2m, compared
with #3.8m in 2002.
Shareholders' funds and cash
Equity shareholders' funds were #63.8m, compared with #58.7m at 30 June 2002 and
#60.7m at 31 December 2002.
Group net debt at 30 June 2003 was #8.3m, compared with #4.7m at the end of
2002. Operating cash inflow in the period was #0.9m. As in the first half of
last year, there was an increase in working capital, with stock levels up #4.2m
supported by a higher order book in the Tobacco Machinery division. Other cash
outflows in the period included the final instalment payment of #0.5m for the
purchase of Arista Laboratories Inc (acquired in 2002), capital expenditure of
#2.1m, tax of #0.8m and dividends paid of #1.3m.
Dividend
The directors have declared an interim dividend of 4.6p per ordinary share
(2002: 4.0p), an increase of 15%. The interim dividend will be paid on 23
October 2003 to shareholders on the register on 19 September 2003.
Pensions
The latest triennial valuation of the UK Pension Fund is being carried out as at
30 June 2003. The results of this valuation will be known later in the year.
Molins is currently accounting under SSAP 24 for pension costs and would
ordinarily use consistent assumptions over a three year period.
However given the volatility in capital markets and the consequent changes to
the valuations of both the assets and liabilities of the scheme, the Company has
updated the assumptions used for reporting in the first six months of this year
to reflect more closely current conditions. No cash contributions were made to
the main pension funds.
Acquisitions
On 8 August 2003 Molins announced the proposed acquisition of Sasib S.p.A. for
#6.6m, including costs. The acquisition was approved by the ordinary
shareholders on 29 August and completed the same day. Sasib, based in Bologna,
Italy, designs, manufactures and sells specialist machinery for the tobacco
industry. Its products, which are predominately packing machines for cigarette
manufacturers, are largely complementary to those of Molins Tobacco Machinery
division.
In the year ended 31 December 2002 Sasib made profits before taxation of #1.5m
on turnover of #36.9m. This level of performance is unlikely to be repeated in
2003, given Sasib's relatively poor order intake in the first six months of the
year. However, we believe that the acquisition will bring a number of benefits
to the enlarged Tobacco Machinery division. The combined expertise of the two
businesses, in terms of operational performance improvement, product development
and sales and marketing will help to stabilise the performance of Sasib and
bring benefits to the Tobacco Machinery division over the medium term. This
acquisition re-affirms Molins' commitment to the tobacco industry and enables it
to offer customers a complete line of cigarette making machinery in two
principal speed ranges.
Operating review
Tobacco Machinery
Sales in the first six months of the year were #32.8m compared with #30.6m last
year, an increase of 7%. In local currency terms the increase was 13%. Order
intake has been ahead of the comparable period in 2002 and the order book at 30
June 2003 was approximately 10% higher than at the previous year end.
Overall the division has moved forward positively in the period, with operating
profit up 15%, from #3.9m to #4.5m.
Activity levels in North America have been particularly encouraging in the
period with considerable demand for rebuild equipment and spares. Rebuild
activity in the other regions has also been strong, particularly in South
America and Europe.
As the rebuild market continues to develop, delivery lead time is an
increasingly important factor in customers' purchase decisions and is being used
to differentiate potential sources of supply. Molmac, in conjunction with the
other divisional businesses, is actively developing its assembly capabilities in
order to meet shorter delivery times. This, together with the demand for spare
parts, has placed further emphasis on the development of the division's
manufacturing businesses and supply chain. Manufacturing output from Molins sro
in the Czech Republic increased by 45% compared with the same period last year,
Molins do Brasil was up by 10% and the volume of parts procured through the
Russian joint venture increased by 50%. Output from the Saunderton factory in
the UK has also increased, by 6%, reflecting continued improvements in
operational efficiency.
Molins Far East has seen a decline in its business levels, with performance
being hit by the outbreak of SARS. Molins' joint venture in Kunming, China,
also had a disappointing period, with low order and sales levels resulting in an
operating loss. Efforts continue to reduce costs in line with production levels
and to secure more work for the factory.
Cerulean recently launched its new range of quality test instruments, MC(2).
These instruments complement Cerulean's existing range of equipment and are
presently undergoing customer trials. The anticipated launch resulted in delays
in the normal ordering pattern. The rationalisation of production capacity and
heightened merger activity amongst the multinational customers has resulted in
decisions on measuring equipment purchases being deferred. Despite this,
Cerulean performed better in the first half of 2003 than in the same period last
year, although it continues to work through a transitional period.
Arista Laboratories Inc performed strongly, with both sales and profit
significantly up compared with the first half of 2002. A key focus has been to
extend the range of services offered to its widening customer base. To this end
further investment has been made in new laboratories and new testing
methodologies. Arista Laboratories Europe, formed at the end of 2002, has also
been developing its business. It will move later this year from its current
location within LGC Ltd's Teddington facility to leased premises in
Kingston-upon-Thames, within which laboratories are currently being built.
Order books remain high and we expect the division to continue to make progress.
Packaging Machinery
Sales in the first six months of 2003 improved by 6% to #19.1m, despite
continued difficult markets. Operating profit also showed a small improvement
from #0.3m to #0.5m.
The market conditions in North America in particular remain challenging. Demand
for standard packaging machines and solutions have been taking precedence over
more specialised applications, the area of traditional strength for Langen.
Langen had a relatively poor order intake in the first six months of the year,
with expected order placements continuing to be delayed. Despite this, the
business has marginally improved its profitability in the first half of the year
through rigorous cost control as well as improved engineering and manufacturing
performance. The European market continues to be extremely price competitive.
However, sales levels into the region have been maintained, with recent product
developments at Sandiacre and Langenpac contributing to the division's
performance. Molins ITCM has had a number of successes in developing the
breadth of its customer base, as it continues to exploit its engineering
solutions expertise.
Overall, the businesses have benefited from continuing process and efficiency
improvements. Despite the difficult trading conditions the division is well
positioned to remain profitable at lower sales levels and to exploit the
benefits of increased activity as the markets improve and as it brings further
new and improved products to market.
Outlook
The order book in the Tobacco Machinery division supports further progress in
the second six months of the year. The Packaging Machinery businesses continue
to experience difficult trading conditions but development of their products and
improved internal processes are helping to maintain profitable trading
performance. Sasib provides further opportunities for the Company to grow.
Overall, the Company is trading broadly in line with the directors' expectations
for the year as a whole.
Peter Byrom
Chairman
2 September 2003
Group profit and loss account
6 months 6 months 12 months
to 30 June to 30 June to 31 Dec
2003 2002 2002
Notes #m #m #m
Turnover - continuing operations 1 51.9 48.6 106.0
Operating profit - continuing operations 1 5.0 5.7 13.0
Net interest payable (0.1) (0.2) (0.3)
Profit on ordinary activities before taxation 4.9 5.5 12.7
Taxation (1.7) (1.7) (4.1)
Profit for the period 3.2 3.8 8.6
Dividends (including non-equity) (0.9) (0.8) (2.0)
Retained profit for the period 2.3 3.0 6.6
Underlying earnings per ordinary share 7 19.4p 17.1p 37.5p
Basic earnings per ordinary share 7 17.7p 20.9p 46.8p
Diluted earnings per ordinary share 16.3p 19.4p 42.9p
Dividend per ordinary share 8 4.6p 4.0p 11.0p
Group balance sheet
30 June 30 June 31 Dec
2003 2002 2002
Note #m #m #m
Fixed assets
Intangible assets - goodwill 10.3 10.4 10.7
Tangible assets 21.2 20.9 19.9
Investments 3.7 3.8 4.0
35.2 35.1 34.6
Current assets
Stocks 28.6 26.7 24.0
Debtors - due within one year 22.4 22.6 21.2
Debtors - due after more than one year 9 26.1 24.7 26.2
Cash and short-term bank deposits 3.9 3.3 2.1
81.0 77.3 73.5
Creditors - amounts falling due within one year
Borrowings (1.0) (1.1) (1.7)
Other creditors (30.7) (32.4) (30.1)
Proposed dividend (0.8) (0.7) (1.3)
(32.5) (34.2) (33.1)
Net current assets 48.5 43.1 40.4
Total assets less current liabilities 83.7 78.2 75.0
Creditors - amounts falling due after more than one year
Borrowings (11.2) (11.1) (5.1)
Provisions for liabilities and charges (7.8) (7.5) (8.3)
Net assets 64.7 59.6 61.6
Capital and reserves
Called up share capital 5.9 5.9 5.9
Share premium account 25.8 25.8 25.8
Revaluation reserve 5.7 5.7 5.6
Capital redemption reserve 3.9 3.9 3.9
Profit and loss account 23.4 18.3 20.4
Shareholders' funds (including #0.9m of non-equity
interests) 64.7 59.6 61.6
Group cash flow statement
6 months 6 months 12 months
to 30 June to 30 June to 31 Dec
2003 2002 2002
#m #m #m
Net cash inflow/(outflow) from operating activities 0.9 (0.6) 7.5
Returns on investments and servicing of finance
Net interest paid (0.1) (0.4) (0.5)
Taxation (0.8) (1.3) (2.4)
Capital expenditure (net of sale proceeds) (2.1) (0.8) (1.4)
Acquisitions and disposals
Purchase of business (0.5) (2.8) (3.7)
Cash acquired with business - 0.2 0.2
Receipts from investment in associate - - 0.2
Net cash outflow from acquisitions and disposals (0.5) (2.6) (3.3)
Equity dividends paid (1.3) (0.9) (1.7)
Net cash outflow before financing (3.9) (6.6) (1.8)
Financing
Issue of new shares - 0.2 0.2
Purchase of own shares for LTIP - - (0.6)
Debt due after more than one year: increase in borrowings 6.2 9.3 3.4
Capital element of finance lease rental payments - - (0.1)
Net cash inflow from financing 6.2 9.5 2.9
Increase in cash in the period 2.3 2.9 1.1
Closing net debt (8.3) (8.9) (4.7)
Statement of total recognised gains and losses
6 months 6 months 12 months
to 30 June to 30 June to 31 Dec
2003 2002 2002
#m #m #m
Profit for the period 3.2 3.8 8.6
Currency translation movements arising on foreign
currency net investments 0.8 (0.8) (2.4)
Total recognised gains and losses since the last Annual
Report and Accounts 4.0 3.0 6.2
Reconciliation of operating profit to net cash flow from operating activities
6 months 6 months 12 months
to 30 June to 30 June to 31 Dec
2003 2002 2002
#m #m #m
Operating profit 5.0 5.7 13.0
Amortisation of goodwill 0.3 0.3 0.5
Depreciation 1.2 1.2 2.3
Other movements 0.3 0.2 0.6
Movements in exceptional items
Cash movements on exceptional restructuring and rationalisation - (0.2) (0.3)
provisions
Working capital movements:
- stocks (4.2) (4.1) (2.0)
- debtors (1.1) (1.3) (0.8)
- creditors and other provisions (0.6) (0.9) (2.8)
- pension fund prepayments - (1.5) (3.0)
Net cash inflow/(outflow) from operating activities 0.9 (0.6) 7.5
Cash flows from exceptional items excluding tax effect - (0.2) (0.3)
Other cash flows 0.9 (0.4) 7.8
Net cash inflow/(outflow) from operating activities 0.9 (0.6) 7.5
Reconciliation of net cash flow to movement in net debt
6 months 6 months 12 months
to 30 June to 30 June to 31 Dec
2003 2002 2001
#m #m #m
Increase in cash in the period 2.3 2.9 1.1
Cash inflow from increase in debt and lease financing (6.2) (9.3) (3.3)
Change in net debt resulting from cash flows (3.9) (6.4) (2.2)
Finance leases acquired with business - (0.1) (0.1)
Translation movements 0.3 0.3 0.3
Movement in net debt in the period (3.6) (6.2) (2.0)
Opening net debt (4.7) (2.7) (2.7)
Closing net debt (8.3) (8.9) (4.7)
Reconciliation of movements in shareholders' funds
6 months 6 months 12 months
to 30 June to 30 June to 31 Dec
2003 2002 2002
#m #m #m
Opening shareholders' funds 61.6 57.2 57.2
Profit for the period 3.2 3.8 8.6
Dividends (0.9) (0.8) (2.0)
Currency translation movements arising on foreign currency
net investments 0.8 (0.8) (2.4)
Issue of new shares - 0.2 0.2
Net increase in shareholders' funds 3.1 2.4 4.4
Closing shareholders' funds 64.7 59.6 61.6
Notes
1 Segmental analysis
Turnover Operating profit
6 months 6 months 12 months 6 months 6 months 12 months
to 30 June to 30 June to 31 Dec to 30 June to 30 June to 31 Dec
2003 2002 2002 2003 2002 2002
#m #m #m #m #m #m
By activity:
Continuing operations
Tobacco Machinery 32.8 30.6 65.2 4.5 3.9 8.7
Packaging Machinery 19.1 18.0 40.8 0.5 0.3 1.3
51.9 48.6 106.0 5.0 4.2 10.0
Net pension credit - 1.5 3.0
Operating profit 5.0 5.7 13.0
2 The interim financial statements have been prepared on the basis of the
accounting policies set out in the Group's 2002 statutory accounts.
3 The financial information for the half year has not been audited,
although the auditor has carried out an independent review.
4 The results for the full year 2002 have been extracted from the Group's
full accounts for that year which included an unqualified audit
report and have been filed with the Registrar of Companies.
5 Operating profit is stated after charging goodwill amortisation of #0.3m
(30 June 2002: #0.3m; 31 December 2002: #0.5m).
6 The Group continues to account for pensions under SSAP 24 Accounting for
pension costs. The last formal valuation of the UK pension fund
was carried out at 30 June 2000 and formed the basis for the assumptions
applied in the financial statements in 2001 and 2002. The assumptions
used for the six months to 30 June 2003 have been updated to reflect
conditions at 1 January 2003. The net pension credit for the six months
to 30 June 2003 was #nil (30 June 2002: #1.5m).
7 Earnings per ordinary share is based upon the profit after taxation less
the preference dividend and on a weighted average of 18,063,745
shares in issue during the period (30 June 2002: 18,173,300). Underlying
earnings per ordinary share is calculated before the charge for goodwill
amortisation and, for the first time, the net pension credit. Given the
volatility in capital markets and the consequent effect on the value of
both the assets and liabilities of the pension scheme, the revised
underlying earnings per share definition is considered to more
appropriately reflect the underlying performance of the business. The
comparative figures for 2002 have been restated to reflect this change.
8 The cost of the interim dividend of 4.6p per ordinary share for the six
months to 30 June 2003 will amount to #0.8m. The preference dividend
paid on 30 June 2003 amounted to #27,000 (30 June 2002: #27,000).
9 Debtors due after more than one year include pension fund prepayments of
#24.6m (31 December 2002: #24.7m).
10 The average US dollar exchange rate for the period to 30 June 2003 was
US$1.61 (30 June 2002: US$1.45) and the rate at 30 June 2003 was
US$1.65 (30 June 2002: US$1.52). The rate at 31 December 2002 was
US$1.61.
11 Post balance sheet event
The Group purchased Sasib S.p.A., a manufacturer of packing machinery
for the tobacco industry, on 29 August 2003. The cost of the acquisition,
including transaction costs, amounted to #6.6m.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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