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Share Name | Share Symbol | Market | Type |
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Whiting Petroleum Corp | NYSE:WLL | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 68.03 | 0 | 01:00:00 |
RNS Number:3990M Willington PLC 17 June 2003 WILLINGTON PLC PRELIMINARY STATEMENT OF RESULTS FOR THE YEAR ENDED 31 DECEMBER 2002 CHAIRMAN'S STATEMENT The better performance normally produced by the group in the second half of the year did not materialise in 2002. The deepening recession in manufacturing industry in both the UK and Europe affected demand for the group's products and services and led to greater price competition. The additional impact of market instability and cost pressures in certain of our businesses combined to produce a very disappointing outcome for the year. In response to the effects of the prolonged recession, the group carried out a financial review of its operations with the object of reducing working capital and operating overheads. Action was taken to improve the use of cash resources with the result that the group was able to increase its cash flow from operations to #2,091,000 (2001 #1,332,000) and reduce net debt by #749,000 (2001 #885,000 increase). Our storage division has historically been the main contributor to group profits and cash flow. In order to improve both the medium and longer-term benefits to shareholders we agreed to purchase the remaining 20.5 per cent minority shareholding in our IBL subsidiary at a significant discount to book asset value. In 2003, we have made further reductions in the operating overheads of our container storage business in response to a sharp fall in revenues from the outflow of units for military use in the Gulf War. This exceptional event is likely to have an adverse effect on the results of the division for 2003. In our distribution division, the decision was taken to change the sales structure in our chemical business in order to obtain more focus. I am pleased to report that there has been a significant improvement in revenue in the first quarter of 2003. In our rubber business the volatility in the world rubber prices seen in 2002 now appears to have receded and, going into 2003, we have been able to make further reductions in overhead costs. The net carrying value of goodwill in the group balance sheet has been reduced by some #1.6 million in 2002. This reduction reflects the discount paid for the IBL minority, an adjustment in relation to deferred consideration in our chemical distribution business and the directors' decision to make an exceptional write down in the goodwill of our other distribution businesses. The group produced an operating profit before amortisation and exceptional write down of goodwill of #317,000 (2001 #944,000 from continuing operations) and a loss on ordinary activities before taxation of #575,000 (2001 profit #270,000) on a slightly lower turnover of #32.8m (2001 continuing operations turnover #34.8m). Earnings per share and headline earnings per share, which excludes goodwill costs, were respectively losses of 8.21p and 0.68p per share (2001 profits of 1.13p and 3.89p). Since trading conditions continue to be difficult, the directors recommend that no dividend will be paid for the year (2001 1p per share). Recognising that this decision, as well as the recent performance of, and immediate outlook for, the group, will be disappointing to shareholders, the directors, with the support of the principal shareholders, are actively giving consideration to ways in which shareholder value could be made more reflective of the underlying asset value of the group, as the directors do not believe that the current market value of the group fairly reflects this value. Such consideration must, however, necessarily be constrained by the special tax constraints applicable to those shareholders who obtained Enterprise Investment Scheme reliefs on the subscription of their shares in the company. Those constraints will continue to have particular relevance until the expiry of the Enterprise Investment Scheme retention period, which runs until the end of 2003. May I once again take this opportunity of recording your Board's appreciation of the effort and commitment shown by all our employees during the year. R M ROBINOW 16 June 2003 Chairman REVIEW OF OPERATIONS The Storage Division The storage division comprises the activities of International Bulk Liquids (Storage & Transport) Limited ('IBL') and of IBL's wholly owned subsidiary London Container Services Limited ('LCS'). IBL itself has two operating units which trade as IBL Cold Stores and IBL Bulk Liquids. The division provides logistics services in the UK for products which require specialised storage and distribution. During the year Willington plc agreed to purchase the remaining minority holding in the shares of IBL amounting to 20.5 per cent. IBL is now a wholly owned subsidiary of the Group. IBL Bulk Liquids IBL Bulk Liquids provides services and facilities for the handling and storage of bulk liquids. Its operations are based in the city of Hull and are located at two sites on the River Hull and one situated in the Port of Hull. The total site area occupied is some eight acres. Hull is well located for north European import and export shipping and Continental deep-sea transhipment ports and has excellent connections to the UK road and rail networks. The Hull facilities comprise some 130 storage tanks with individual sizes ranging from 50 to 1,700 cubic metres and a total capacity of some 34,000 cubic metres. In order to meet a wide range of product requirements certain tanks are fitted with internal coatings, insulation and steam heating coils and some are constructed of stainless steel. In addition to handling facilities for road tankers and tank containers, each of the sites has berthing for ships and barges, with larger vessels up to 7,000 tonnes deadweight being accommodated at the Port of Hull site. Ancillary services are also provided including blending and mixing, drumming and canning, steam heating of liquids and wash bay and public weighbridge facilities. IBL Bulk Liquids has an established customer base in the edible oil and chemical industries, including a number of multinational groups. In 2002, the tonnage of products handled and the revenue earned by IBL Bulk Liquids were some 8 per cent lower than the previous year reflecting a fall in demand for storage services in the later months of the year. The strength of the market for bulk liquids storage depends on industrial activity which continued to experience recessionary pressures. Against this difficult background and increasing competition for available business, the bulk liquids operation achieved an acceptable profit, albeit lower than that produced in 2001. Progress was made in obtaining suitable business for the new one-acre site acquired in 2001 and potential exists for further improvement in revenues. The cost effectiveness and quality of service provided by IBL Bulk Liquids should ensure that it is well placed to benefit from any upturn in storage demand. Although throughput in the first few months of 2003 continued at the lower levels experienced in the final months of 2002, activity has now improved. If this trend continues then profits for the current year should be at least equal to those achieved in 2002. IBL Cold Stores IBL Cold Stores provides temperature controlled storage and distribution services, primarily to the food industry. Its operations are based on a four-acre site at Knowsley on the outskirts of Liverpool. The location of the site close to the M57 motorway provides convenient access to the national motorway network. The facilities at Knowsley comprise a 110,000 square foot temperature controlled store in which some 66,000 square feet are dedicated to cold storage, 26,000 square feet to chill storage and the balance to service areas, including enclosed loading bays. The storage areas are varied and adaptable, being divided into 13 chambers, ranging in size from 4,000 to 14,000 square feet and operating at temperatures between plus 10 and minus 24 degrees Celsius. IBL Cold Stores has also developed a comprehensive computerised stock control and movement system in order to support the superior service levels demanded by its established food industry customers. During 2002 market conditions in the public cold storage industry remained depressed. This situation has existed for the past three years and has resulted in an overcapacity in storage facilities and severe price competition for available business. Also in 2002 the industry, including IBL Cold Stores, suffered substantial increases in property and liability insurance rates and a consequent significant increase in overhead costs. As reported at the interim stage, occupancy and throughput levels at IBL Cold Stores for the first half of 2002 were at seasonally low levels. As expected there was a considerable improvement in activity in the second half of the year but the upturn was not as large as experienced in earlier years because of the quieter Christmas trading period this year. As a result overall occupancy and throughput for the year were lower than in 2001 and the corresponding reduction in revenue and substantially higher insurance costs meant that IBL Cold Stores recorded a small loss for the year. Business levels in the early months of 2003 have been better than in the corresponding period last year. However there has been a further substantial increase in insurance costs in 2003 which will inhibit a recovery in profit for the current year. IBL Cold Stores is an efficiently run business. It is hoped that insurance costs have now peaked and that more realistic rates will be obtainable from 2004. This prospect, combined with an improvement in market conditions, should ensure better results from the business in the future. London Container Services LCS provides storage and repair services to owners and operators of freight containers and has developed a resale and hire business for containers used in the domestic market. The main LCS depot is situated on a fourteen-acre site at Rainham in Essex. The depot provides open storage for containers and incorporates refurbishment and fabrication workshops in which major repairs are carried out. The depot has storage capacity for 8,500 containers and is equipped to handle around 3,000 container movements per month. Additional smaller depots, totalling some six acres, are operated at Leeds, Southampton and Tilbury. The depots utilise modern container handling equipment in order to achieve efficient use of yard areas, optimisation of storage capacity and fast handling of units to and from road vehicles. A fully integrated on-line computer system, linked to major customers worldwide, controls receipts, repair estimating and authorisation, stock and deliveries of all containers handled by LCS. As previously reported LCS returned to profit in the first half of the year. Costs were reduced, container sales continued to grow and the volume of containers stored did not decrease. Events towards the end of the year were not so favourable because storage volumes at the Rainham depot declined sharply due to repositioning of units abroad and sale of older units by certain customers. It also became necessary to vacate the Southampton depot, which had been a useful adjunct to the LCS business, and, because no cost effective alternative was available, it was decided to cease operations at the port. Whilst the overall performance of LCS for the year showed a useful improvement over that for 2001, the fall in revenues in the last quarter resulted in the company making a small loss for the year. A further large fall in storage volumes occurred in the early months of 2003 because of military requirements for the Gulf War. Action has been taken to reduce operating costs to a level which reflects the lower revenue expected for the remainder of the year. Improved results at LCS will only be achieved when business volumes recover. The Distribution Division The distribution division comprises the businesses of three wholly owned subsidiaries of the group: The White Sea & Baltic Company Limited ('White Sea'), F Holm Chemie Handels GmbH ('Holm') and R.E.B. Willcox Limited ('Willcox'). During the year the division was engaged in the merchanting and distribution of speciality chemicals and natural rubber. Sales were predominantly to manufacturing industries based in the UK and Continental Europe. White Sea White Sea is based in Leeds and distributes speciality chemicals principally in the UK. The speciality chemicals distributed by White Sea fall into the following main categories: oleochemicals, pine chemicals, fragrances, fine chemicals, surfactants and industrial chemicals. These products are used in the formulation and manufacture of personal care and household products such as cosmetics, toiletries, detergents, cleaners and polishes and also in a wide variety of consumer and industrial products including paints, adhesives, plastics, paper, textiles and lubricants. Certain products are sold to chemical manufacturers as intermediate raw materials or processing aids (e.g. emulsifiers, solvents, stabilisers and dispersants). The encouraging progress reported for the first half of the 2002 year was not sustained in the remainder of the year. Because of the effects of the recession, conditions in the UK chemicals market remained very competitive and revenue was affected. In light of this trend the decision was taken to centralise sales activities so that a more effective sales structure would be in place for the future. The results of these changes were not immediate and therefore White Sea only achieved a small improvement on the loss sustained in the previous year. Sales in the first quarter of 2003 have risen significantly and the benefits of more focused selling are now evident. Further improvement in sales performance is expected but the rate of progress is likely to be dependent on the recovery in market conditions in the chemical industry. Holm Holm is based in Pinneberg, on the outskirts of Hamburg and distributes speciality chemicals throughout Continental Europe. The main products supplied by Holm are oleochemicals. Customers include a number of major European chemical, personal care and household product manufacturers. 2002 was a more challenging year for the business because of recession in the German market where price competition was strong. Against this background a satisfactory profit was achieved for the year. Trading volumes in 2003 have been lower than in the corresponding period last year and unless market conditions improve it is likely that a lower profit will be made for the year. Willcox Willcox is based in London and distributes natural hevea rubber and latex in the UK and Europe. Since its acquisition by the Group in 2000, volume sales of the rubber distribution business have shown steady growth year on year. The business has an established network of suppliers in South East Asia and Africa and has progressively widened its customer base in the UK and Europe. Although the principal consumption of natural rubber remains in the automotive industry, Willcox has derived an increasing proportion of its sales from other end-uses such as the manufacture of adhesive tapes, household goods and industrial products. Although demand for natural rubber remained subdued in the UK and Europe, the target for growth in sales volume was achieved in 2002. However the benefits of larger volume and further reductions in overhead costs were unexpectedly affected by a major increase in world rubber prices. Defaults in supply contracts which originated in the major producing country, Thailand, had a dramatic effect on world prices which rose by over 80 per cent during the year. Volume sales at Willcox were initially affected but recovered. However Willcox did suffer a number of supplier defaults which resulted in a pre-tax loss being recorded for the year as a whole. In 2003 world rubber prices have settled around the higher levels seen at the end of 2002 but the variation in short term prices is larger than normal. Assuming the world market for rubber remains orderly, Willcox can expect to return to profit in 2003. CONSOLIDATED BALANCE SHEET as at 31 December 2002 2002 2001 #000 #000 Fixed assets Positive goodwill 3,134 4,024 Negative goodwill (707) - 2,427 4,024 Tangible 4,885 5,299 7,312 9,323 Current assets Stocks 1,887 2,139 Debtors 6,131 7,734 Cash at bank 281 108 8,299 9,981 Creditors: amounts due in less than one year (7,716) (8,711) Net current assets 583 1,270 Total assets less current liabilities 7,895 10,593 Creditors: amounts due in more than one year (862) (1,446) 7,033 9,147 Provisions for liabilities and charges (86) (81) Net assets 6,947 9,066 Capital and reserves Called-up share capital 2,126 2,126 Share premium account 5,122 5,122 Profit and loss account (301) 397 Equity shareholders' funds 6,947 7,645 Equity minority interests - 1,421 Total capital employed 6,947 9,066 CONSOLIDATED PROFIT AND LOSS ACCOUNT for the year ended 31 December 2002 2002 2001 Discontinued Continuing Total activities activities Total #000 #000 #000 #000 Turnover 32,768 4,696 34,819 39,515 Cost of sales (29,841) (4,281) (31,541) (35,822) Gross profit 2,927 415 3,278 3,693 Other operating expenses (net) (3,250) (375) (2,565) (2,940) Group operating profit before goodwill 317 44 944 988 amortisation and impairment Amortisation of goodwill (210) (4) (231) (235) Impairment of goodwill (430) - - - Group operating (loss) profit (323) 40 713 753 Interest payable (252) (88) (395) (483) (Loss) profit on ordinary activities before taxation (575) (48) 318 270 ____ _____ Tax on (loss) profit on ordinary activities (104) (118) (Loss) profit on ordinary activities after taxation (679) 152 Minority interests (19) (56) (Loss) profit for the year (698) 96 Dividend - (85) Retained (loss) profit for the year (698) 11 Headline (loss) earnings per ordinary share - basic (0.68)p 3.89p (Loss) earnings per ordinary share - basic (8.21)p 1.13p The group has no other recognised gains or losses in either year other than the (loss)/profit for that year. All activity in 2002 arises from continuing operations. Discontinued activities in 2001 consisted of the disposal of the jute products business of R.E.B.Willcox Ltd. CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 December 2002 2002 2001 #000 #000 Net cash inflow from operating activities 2,091 1,332 ______ Returns on investments and servicing of finance Interest paid (211) (451) Interest element of finance lease payments (41) (32) Dividends paid to minority interest - (8) ______ (252) (491) ______ Taxation (paid) received (191) 75 ______ Capital expenditure Purchase of tangible fixed assets (374) (725) Sale of tangible fixed assets 136 118 ______ (238) (607) ______ Acquisitions and disposals Purchase consideration paid (576) (1,736) Disposal of discontinued activity - 942 ______ (576) (794) ______ Equity dividends paid (85) (400) ______ Net cash inflow (outflow) before financing 749 (885) ______ Financing Repayment of 9% unsecured loan notes - (206) 6% unsecured loan notes repaid (38) (39) New secured bank loans 129 635 Repayment of secured bank loans (539) (204) Capital element of finance lease payments (34) (225) ______ (482) (39) ______ Increase (decrease) in cash 267 (924) ______ NOTES TO THE PRELIMINARY STATEMENT 1 Nature of financial information The preliminary statement which has been agreed with the Company's auditors was approved by the Board on 16 June 2003. The results for 2002 are abridged from the Company's financial statements and have yet to be approved or delivered to the Registrar of Companies. Comparative figures have been extracted from the consolidated financial statements for the period ended 31 December 2001 on which the auditors reported without qualification, which have been filed with the Registrar of Companies in England and Wales and which contained no statement under section 237(2) or (3) of the Companies Act 1985. 2 Segmental information In the tables below the group's net assets, turnover and (loss) profit before taxation (excluding result of sales of assets) are analysed by geographical area and by business class. Net assets, in the case of the geographical analysis, are allocated to the area where the main operation of a particular activity is carried out and where the majority of that activity's assets are situated. (a) Net assets 2002 2001 #000 #000 Net assets - by geographical area United Kingdom 6,699 8,870 Rest of Europe 248 196 ______ 6,947 9,066 ______ Net assets - by business class Storage 5,138 6,800 Distribution 1,809 2,266 ______ 6,947 9,066 ______ (b) Turnover 2002 2001 #000 #000 Turnover - by geographical area, by destination United Kingdom 16,140 19,451 Rest of Europe 14,227 14,619 Asia 2,202 3,432 Rest of World 199 2,013 ______ 32,768 39,515 ______ Turnover - by business class Storage 7,253 7,502 Distribution 25,515 32,013 ______ 32,768 39,515 ______ Turnover by origin of transaction arose almost entirely in the United Kingdom. (c) Profit (loss) before taxation by business class 2002 2001 #000 #000 Storage 139 353 Distribution (714) (83) ______ (575) 270 ______ Profit (loss) by origin of transaction arose almost entirely in the United Kingdom. 3. Earnings per share Earnings per share have been calculated on the profit on ordinary activities after taxation attributable to ordinary shareholders divided by the average number of ordinary shares in issue (2002 8,504,171 shares 2001 8,504,171 shares). Headline earnings per ordinary share has been calculated on the same basis, but before goodwill amortisation and the impairment of goodwill. The directors believe that this gives a better understanding of the group's earnings. 4. Dividend on ordinary shares 2002 2001 #000 #000 No dividend is proposed (2001 1p per share) - 85 _____ _____ 5 Reconciliation of operating profit to operating cashflow 2002 2001 #000 #000 Operating (loss) profit (323) 753 Amortisation of goodwill 210 235 Impairment of goodwill 430 - Depreciation (including profit on disposals) 652 665 Decrease (increase) in stocks 252 (559) Decrease in debtors 1,603 1,404 (Decrease) in creditors (733) (1,166) _____ Net cash inflow from operating activities 2,091 1,332 _____ 6 Analysis of net debt Beginning of year #000 Cashflow Closing #000 #000 Cash 108 173 281 Overdrafts (4,230) 94 (4,136) _____ _____ _____ (4,122) 267 (3,855) Loans (see below) (1,043) 448 (595) Finance leases (205) 34 (171) _____ (5,370) 749 (4,621) _____ Loans are analysed as follows Beginning of year Cashflow Closing #000 #000 #000 Amounts due in more than one year (811) 268 (543) Amounts due in less than one year (232) 180 (52) _____ _____ _____ (1,043) 448 (595) _____ Analysis of net debt (continued) 2002 2001 #000 #000 Increase (decrease) in cash in the period 267 (924) Cash outflow from decrease in debt and leases 482 39 _____ _____ 749 (885) Net debt at beginning of period (5,370) (4,485) _____ _____ Net debt at end of period (4,621) (5,370) _____ _____ 7. Financial Statements Copies of the financial statements for the year ended 31 December 2002 are being sent to all shareholders and will be available from the Company's registered office at 3rd Floor, 40-42 Osnaburgh Street, London NW1 3ND, in the near future. Enquiries: Vincent Troy, Managing Director - 020 7419 0100 Malcolm Baskerville, Finance Director - 0151 549 1082 This information is provided by RNS The company news service from the London Stock Exchange END FR ZGGMVGVNGFZZ
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