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Share Name | Share Symbol | Market | Type |
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Innoviva Inc | TG:HVE | Tradegate | Ordinary Share |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 15.30 | 15.10 | 15.40 | 0.00 | 06:32:02 |
RNS Number:4446J Havelock Europa PLC 01 April 2003 1 April 2003 HAVELOCK EUROPA PLC - PRELIMINARY ANNOUNCEMENT * Havelock, the educational and retail interiors and point of sale display business, announces that its results for 2002 mark a major step forward for the Group and that 2003 has started well, with further progress expected. * Assisted by the inclusion for the full year of ESA McIntosh, the UK market leader in educational science laboratories, Havelock's turnover increased to #87.4m (2001: #63.1m), producing a profit before tax of #3.9m (2001: loss #2.6m) and basic earnings per share of 9.8p (2001: loss 7.3p). * Underlying pre-tax profit, before goodwill amortisation and exceptionals, was #3.8m (2001: #1.2m) and earnings per share were 9.4p (2001: 3.3p). * The reduction in the Group's exposure to the Middle East, following the sale of the Middle East Joint Venture in February 2003, has reduced borrowings and lowered the Group's risk profile. * Net debt at the year end reduced to #11.3m from #15.7m in 2001, bringing down gearing from 209% at 31 December 2001 to 117% at 31 December 2002. It declined further to a pro forma 88% when the proceeds of sale of the Middle East Joint Venture in February 2003 are included. * Dividends per share total 2.4p (2001: 2.0p), up 20%, covered 3.9 times. Michael Kennedy, Chairman, stated "The Group's trading results for 2002, combined with the reorganisation of the Retail Interiors Division and a significant strengthening of the balance sheet, have created a strong base for further progress in 2003. Whilst the outcome for the year for the Point of Sale Division is more difficult to predict, prospects in the other two divisions are encouraging: ESA McIntosh is experiencing record levels of enquiries from Local Authorities and can expect a further useful advance in the volume of PFI work and the reshaped Retail Interiors Division entered the New Year with its best order book and business outlook for some years." Enquiries: Havelock Europa PLC 01383 820044 Hew Balfour (Chief Executive) 07801 683851 Graham MacSporran (Finance Director) 07801 683803 Bankside Consultants Limited Charles Ponsonby 020-7444 4166 PRELIMINARY ANNOUNCEMENT As predicted in the preliminary announcement a year ago, Havelock Europa's results for 2002 mark a major step forward for the Group. 2003 has started well and further progress is expected. FINANCIAL REVIEW Assisted by the inclusion for a full year of ESA McIntosh, which was acquired in September 2001, Havelock's turnover increased to #87.4 million (2001: #63.1 million), producing a profit before tax of #3.9 million (2001: loss #2.6 million) and basic earnings per share of 9.8p (2001: loss 7.3p). Underlying pre-tax profit was #3.8 million (2001 : #1.2 million) and earnings per share were 9.4p (2001 : 3.3p), excluding the exceptional profit of #0.4 million on the sale, in June 2002, of the Retail Interiors Division factory in Nottingham (2001: an exceptional charge of 3.7 million in connection with its closure) and the goodwill amortisation charge of #0.3 million (2001 : #0.1 million). Of Havelock's four businesses, the educational interiors subsidiary, ESA McIntosh, performed particularly well; the Point of Sale Division performed well; whilst the Retail Interiors Division achieved a small positive contribution, notwithstanding that for the first six months of the year it carried the full costs of an empty factory and much of the associated workforce. The Middle East Joint Venture performed creditably, although, as expected, at a considerably lower level than the outstanding performance of 2001. Net debt at the year end reduced to #11.3 million (2001 : #15.7 million). This was an excellent achievement given that the net proceeds of #3.15m from the sale of the Nottingham factory were more than offset by the cash outflow arising from its closure and by the payment of the first earn-out consideration for ESA McIntosh of #2.5 million. Despite the increase in Group turnover, the strong cash generative nature of the Group's businesses combined with tight working capital controls resulted in gearing at 31 December 2002 of 117% (2001 : 209%). Interest cover before exceptionals increased to a healthy 4.1 times (2001 : 2.2 times). DIVIDENDS The Board is proposing a 20% increase in the final dividend to 1.8p per share (2001 : 1.5p). If approved at the Annual General Meeting on 18 June 2003, the dividend will be paid on 1 July 2003 to shareholders on the Register at the close of business on 6 June 2003. Including the interim dividend per share of 0.6p (2001 : 0.5p) paid on 27 December 2002, the proposed dividends for the year total 2.4p per share (2001 : 2.0p), up 20% and covered 3.9 times. TRADING REVIEW ESA McIntosh ESA McIntosh is the UK market leader in the design, manufacture and installation of educational science laboratories, with 205,000 square feet of facilities in Kirkcaldy, Fife. In its first full year of ownership, ESA McIntosh fulfilled expectations, recording turnover of #18.1 million and reaching its second earn-out target, triggering the final consideration payment of #2.5 million, which is payable in the current year. Significant advances were made in the supply of educational furniture to construction consortia involved in the building of new schools and the refit of existing ones through the mechanism of PFI. Turnover in this area doubled from #4 million to just over #8 million. Work was done the length and breadth of Britain, from Cornwall in the south to Aberdeen in the north. The two single largest contracts were for Glasgow and Edinburgh Schools. Point of Sale Display The Point of Sale Display Division prints promotional graphics and manufactures display equipment in Letchworth and Bristol for use in retail and branded goods businesses, typically as part of marketing rather than capital expenditure budgets. Turnover in the Division increased by 14.5% to #25.7 million (2001 : #22.5 million), reflecting expansion of the Division's exposure to the supermarket sector and further penetration of the point of sale display market for internationally branded, fast moving consumer goods. New investment took place at both Letchworth and Bristol in the form of additional warehousing and collation facilities, as well as in state-of-the-art direct projection technology and extra printing capacity. Retail Interiors The Retail Interiors Division designs, manufactures and installs furniture and fittings for retailers, banks and hotels. In April, its Nottingham factory was closed resulting in a significant cut-back in the Division's manufacturing capacity which is now located wholly at Dalgety Bay, Fife. A new office has been established at Alfreton, Derbyshire to accommodate the relocated project management, sales and design staff from Nottingham who service many of the Division's traditional customers. The office also provides support for the Division's growing hotels and project management business. The Division's turnover rose by 32.2% to #39.0 million (2001: #29.5 million), reflecting the return of House of Fraser as a major customer as well as increased activity with Lloyds TSB and Boots The Chemists. As a result of this improvement in turnover together with annualised cost savings of #2 million following the sale of the Nottingham factory, the Division was able to make a small positive contribution for the year as a whole despite a significant loss in the first half. Middle East Joint Venture Havelock AHI, which for the whole of 2002 was 49% owned by Havelock, is a manufacturer and installer of retail and hotel interiors, with facilities totalling 150,000 square feet in Bahrain. As expected, after the outstanding result of 2001, the Group's share of turnover at #4.6 million (2001 : #6.2 million) was down, by 25.8%, reflecting a slow down in the retail market and a significant depreciation of the Bahraini dinar against the pound sterling. The Group's share of profit was similarly affected at #0.58 million (2001 : #1.08 million). STRATEGY The strategy, set out at the time of the acquisition of ESA McIntosh in September 2001, to concentrate on UK markets offering substantial opportunities for profitable growth, is now starting to show early success. The acquisition of ESA McIntosh has secured for Havelock a market leading position in educational furniture. The scale of this market, supported by the increased volumes of Government expenditure already announced, suggest that this field offers the potential for strong growth over a number of years. The Point of Sale Display companies have increased their exposure to food retailers and, during 2002, made useful further inroads into the market for internationally branded fast moving consumer goods. The Retail Interiors Division has been successfully realigned to market conditions. Its manufacturing capacity has been reduced through the closure of the Nottingham factory, which will produce savings of some #2 million per annum, enabling the Division to trade profitably at much lower levels of turnover. Opportunities are being sought to use the skills base for more profitable work, particularly in department stores and in the hotel sector, a new market for Havelock, where early results have been encouraging. CURRENT TRADING AND PROSPECTS The Group's trading result for 2002, combined with the reorganisation of the Retail Interiors Division, has created a strong base for further progress in 2003. The sale of the Group's share in its Middle East Joint Venture, announced in January 2003, will generate an exceptional profit of approximately #0.9 million in the first half of the year. After allowing for costs and the reinvestment in a 17% stake in the private equity-backed purchaser, some #2 million of cash resulting from the sale has been applied in further strengthening of the Group's balance sheet, reducing gearing to 88 per cent on a pro forma basis at 31 December 2002. Within ESA McIntosh's educational sector, enquiries from Local Authorities are running at record levels. A further useful advance in the volume of PFI work across the UK is also expected. The combination of a traditionally shorter order book than the other Divisions, current corporate activity in the supermarket sector, and uncertainty in consumer spending patterns make it more difficult to predict the outcome for the year for the Point of Sale Display Division. However, Hartcliffe has negotiated a three year extension to its five year contract for the provision of printing services to Somerfield and Kwiksave. The reshaped Retail Interiors Division entered the new year with its best order book and business outlook for some years. A new store for Fenwick was opened in Canterbury in February and work is in hand for a new store in the City of London for House of Fraser, which will open later this year. The Division will benefit from the availability of savings from the closure of the Nottingham factory for a whole year, as against just the second half in 2002. The Directors look forward to a year of further progress. Michael Kennedy Chairman 1 April 2003 CONSOLIDATED PROFIT AND LOSS ACCOUNT for the year ended 31 December 2002 2002 2001 (Restated) Notes #000 #000 Turnover Group and share of Joint Venture 87,442 63,072 Less: share of Joint Venture's turnover (4,601) (6,206) _______ ______ Group turnover 82,841 56,866 Operating profit before exceptional items Group 4,066 931 Exceptional reorganisation credit/(costs) 399 (3,750) _____ ______ Operating profit/(loss) after exceptional items 4,465 (2,819) Share of Joint Venture's operating profit 586 1,095 ______ _____ Total operating profit/(loss):Group & share of 5,051 (1,724) Joint Venture Net interest payable and other similar items Group (1,115) (904) Joint Venture (10) (15) ______ ______ Profit/(loss) on ordinary activities before taxation 3,926 (2,643) Tax (charge)/credit on profit on ordinary 3 (995) 571 activities ______ ______ Profit/(loss) for the financial year 2,931 (2,072) Dividend (743) (617) ______ ______ Retained profit/(loss) for the year 2,188 (2,689) ______ ______ Basic earnings/(loss) per share 4 9.8p (7.3p) Basic adjusted earnings per share 4 9.4p 3.3p Diluted earnings/(loss) per share 4 9.6p (7.3p) Dividends per share 2.4p 2.0p All operations are continuing. GROUP BALANCE SHEET as at 31 December 2002 2002 2001 (Restated) Notes #000 #000 Fixed assets Intangible assets - goodwill 4,077 4,332 Tangible assets 12,649 16,088 Investment in own shares 368 250 Investment in Joint Venture - goodwill 112 136 - share of assets 2,551 2,569 - share of liabilities (1,005) (1,492) ______ ______ 1,658 1,213 ______ ______ 18,752 21,883 ______ ______ Current assets Stocks 5 7,317 5,793 Debtors 6 16,725 17,531 Cash at bank and in hand 902 - ______ ______ 24,944 23,324 Creditors: Amounts falling due within one year 7 (24,568) (26,315) ______ ______ Net current assets/(liabilities) 376 (2,991) ______ ______ Total assets less current liabilities 19,128 18,892 Creditors: amounts falling due after more than one year 8 (9,399) (11,372) Provision for liabilities and charges (79) - ______ ______ Net assets 9,650 7,520 ______ ______ Capital and reserves Called up share capital 3,097 3,083 Share premium account 9 879 844 Revaluation reserve 9 1,318 1,762 Profit and loss account 9 4,356 1,831 ______ ______ Equity shareholders' funds 9,650 7,520 ______ ______ STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES for the year ended 31 December 2002 Notes 2002 2001 (Restated) #000 #000 Profit/(loss) for the financial year 2,931 (2,072) Exchange (loss)/gain on investment in Joint Venture (107) 13 ______ ______ Total recognised gains/(losses) relating to the year 2,824 (2,059) ______ Prior year adjustment 9 (732) _____ Total gains recognised 2,092 ______ RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS for the year ended 31 December 2002 Notes 2002 2001 (Restated) #000 #000 Profit/(loss) for the financial year 2,931 (2,072) Dividend (743) (617) ______ ______ Retained profit/(loss) for the financial year 2,188 (2,689) Other recognised gains and losses relating to the year (107) 13 New share capital issued 49 882 ______ ______ Net increase/(decrease) in shareholders' funds 2,130 (1,794) Opening shareholders' funds 8,252 9,592 Prior year adjustment 9 (732) (278) ______ ______ Opening shareholders' funds - as restated 7,520 9,314 ______ ______ Closing shareholders' funds 9,650 7,520 ______ ______ STATEMENT OF HISTORICAL COST PROFITS AND LOSSES 2002 2001 (Restated) #000 #000 Reported profit/(loss) on ordinary activities before taxation 3,926 (2,643) Realisation of property revaluation gains of previous years 444 - Difference between a historical cost depreciation charge and the actual depreciation charge of the year calculated on the revalued amount (4) (10) _____ _____ Historical cost profit/(loss) on ordinary activities before taxation 4,366 (2,653) _____ _____ Historical cost profit/(loss) for the year retained after taxation and dividends 2,628 (2,699) _____ _____ CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 December 2002 2002 2001 #000 #000 Cash inflow from operating activities 10 7,047 2,801 Dividends from Joint Venture - 456 Return on investments and servicing of finance Interest received 5 36 Interest paid (1,114) (1,016) ______ _______ (1,109) (980) ______ ______ Taxation 498 (322) ______ ______ Capital expenditure and financial investment Purchases of tangible fixed assets (1,807) (1,187) Proceeds from sale of tangible fixed assets 3,324 40 Loan to ESOP trust (118) (28) ______ ______ 1,399 (1,175) ______ ______ Acquisitions Purchase of subsidiary undertaking (238) (476) Net overdraft acquired with subsidiary undertaking - (3,449) ______ ______ (238) (3,925) ______ ______ Equity dividends paid (682) (471) ______ ______ Cash inflow/(outflow) before use of liquid resources and financing 6,915 (3,616) ______ ______ Financing and management of liquid resources Repayment of loan by Joint Venture - 186 Repayment of loan notes issued on acquisition of subsidiaries (4,344) (181) Capital element of finance lease rental payments (516) (455) Repayment of long term loan (1,251) (312) Bank loan and other advances 2,000 - Issue of new shares 49 - ______ ______ (4,052) (762) ______ ______ Increase/(decrease) in cash for the year 2,863 (4,378) ______ ______ NOTES TO THE STATEMENT 1. The profit and loss account, balance sheet and abridged cash flow statement do not constitute the Company's statutory accounts for 2002 or 2001 but are derived from those accounts. The statutory accounts for 2001, on which the auditors have given an unqualified report, have been delivered to the Registrar of Companies. Those for 2002 will be delivered following the Annual General Meeting. The auditors have reported on those accounts which were unqualified and did not contain a statement under Section 237(2) of the Companies Act 1985. 2. Basis of consolidation The consolidated profit and loss account and balance sheet include the financial statements of the Company, its subsidiaries and its interests in a joint venture made up to 31 December 2002. The group's share of profits, and profits of the joint venture, is included in the consolidated profit and loss account, and its interests in their net assets, is included in the balance sheet. 3. Tax (charge)/credit on profit/(loss) on ordinary activities 2002 2001 (Restated) # 000 # 000 UK corporation tax - current year at 30 % - 432 - prior year (44) 29 Deferred tax - current year (1,031) 137 - prior year 80 (27) ______ ______ (995) 571 ______ ______ The tax charge for the year differs from 30% of the pre-tax profit because the Joint Venture profit of #576,000 (2001:#1,080,000) is not subject to taxation, there is no tax charge on the sale of the Nottingham property, and the utilisation of unrelieved tax losses. The tax charge for the year is principally deferred tax representing timing differences. 4. Earnings per share Based on a profit after tax of #2,931,000 (2001: loss: #2,072,000) and 29,940,303 shares (2001: 28,192,578) the basic profit per share was 9.8p (2001: loss: 7.3p). Based on a profit of #2,809,000 (2001: #935,000) before exceptional costs, goodwill amortisation and after tax and 29,940,303 shares (2001: 28,192,578), being the weighted average number of shares in issue during the year, the basic adjusted profit per share was 9.4p (2001: 3.3p). 2002 2001 Earnings Earnings per Earnings per share Earnings share #000 #000 Basic 2,931 9.8p (2,072) (7.3p) Exceptional (credit)/costs (399) (1.3p) 3,750 13.3p Tax relief on exceptional costs - - (879) (3.1p) Goodwill amortisation 277 0.9p 136 0.4p _______ ______ ______ ______ Adjusted basic 2,809 9.4p 935 3.3p _______ ______ ______ ______ Diluted 2,931 9.6p (2,072) (7.3)p ______ ______ ______ ______ 2002 2001 Number Number of shares of shares 000's 000's For basic and adjusted earnings per share 29,940 28,193 Effect of exercise of share options 650 - _______ _______ For diluted earnings per share 30,590 28,193 ________ _________ Earnings per share are calculated for the issued shares excluding those held by the ESOP Trust in accordance with UITF 13. 5. Stocks 2002 2001 #000 #000 Raw materials and consumables 2,027 1,861 Work in progress 3,514 1,455 Less: Payments to account (787) - Finished goods 2,563 2,477 _____ _____ 7,317 5,793 _____ ______ 6. Debtors 2002 2001 (Restated) #000 #000 Trade debtors 15,029 15,149 Other debtors 351 566 Deferred tax asset - 872 Prepayments 1,345 944 ______ ______ 16,725 17,531 ______ ______ 7. Creditors: amounts falling due within one year 2002 2001 #000 #000 Bank overdraft (secured) 1,250 3,211 Loan notes 1,310 3,144 Trade creditors 12,610 8,192 Corporation tax 80 - Other taxes and social security 2,258 2,112 Accruals 3,750 2,657 Provision for Nottingham closure - 3,500 Dividend proposed 557 496 Obligations under hire purchase contracts & finance 253 503 leases Provision for deferred consideration 2,500 2,500 ______ ______ 24,568 26,315 ______ ______ The loan notes are repayable at par on the holder giving one month's notice. The Company's obligations under these notes are guaranteed by Bank of Scotland. The notes relating to the acquisition of Hartcliffe were redeemed in full by the Company on 5 January 2003 at par. In so far as the notes relating to the acquisition of ESA McIntosh have not already been redeemed, they will be redeemed in full by the Company on 31 December 2004 at par. The Company has made full provision for deferred consideration in relation to ESA McIntosh. It is expected that this will be satisfied by the issue of loan notes in 2003 and these will be redeemable six months and one day after issue. 8. Creditors: amounts falling due after more than one year 2002 2001 #000 #000 Bank loans (secured) 9,187 8,438 Obligations under finance leases 212 434 Provision for deferred consideration - 2,500 ______ ______ 9,399 11,372 ______ ______ 9. Reserves Share Revaluation Profit and premium reserve loss account #000 #000 #000 At 1 January 2002 (as previously reported) - - 2,563 Prior year adjustment (see below) - - (732) ______ ______ ______ At 1 January 2002 (restated) 844 1,762 1,831 Retained profit for the year - - 2,188 Exchange loss on investments - - (107) New shares issued under SAYE share scheme 35 - - Revalued asset sold - (444) 444 ______ ______ ______ At 31 December 2002 879 1,318 4,356 ______ ______ ______ As a result of the adoption of FRS19: Deferred Tax, a prior year adjustment has been made in respect of the recognition of a deferred tax asset (#732,000). This has resulted in a reduction in goodwill on the acquisition of ESA McIntosh (#1,604,000). The net effect of this adjustment is to decrease net assets by #1,603,000 (2001: #732,000), reduce the goodwill amortisation by #80,000 (2001: nil) and increase the tax charge by #951,000 (2001: #454,000). 10. Cash Flow Statement 2002 2001 #000 #000 (a) Reconciliation of operating profit/(loss) to net cash inflow from operating activities Operating profit/(loss) after exceptional items 4,465 (2,819) Depreciation 2,165 2,116 Amortisation of goodwill 277 136 Gain on disposal of fixed tangible assets (145) (8) (Increase)/decrease in stocks (1,524) 126 (Increase)/ decrease in debtors (528) 3,440 Increase/(decrease) in creditors 2,337 (190) ______ ______ Net cash inflow from operating activities 7,047 2,801 ______ ______ (b) Reconciliation of net cash flow to movement in net debt Increase/(decrease) in cash for the year 2,863 (4,378) Finance lease creditor acquired with acquisition - (318) Finance lease payments 516 455 Inception of new finance leases (44) (293) Loan notes issued in the year (2,500) (2,080) Loan notes repaid 4,334 181 Bank loan repaid 1,251 312 New bank loan (2,000) - ______ ______ Movement in net debt in the year 4,420 (6,121) Opening net debt (15,730) (9,609) ______ ______ Closing net debt (11,310) (15,730) ______ ______ (c) Analysis of net debt At 1 Other At 31 January Cash Non-cash December 2002 flow changes 2002 #000 #000 #000 #000 Cash at bank and in hand - 902 - 902 Overdraft (1,961) 1,961 - ______ ______ ______ ______ Total (1,961) 2,863 - 902 ______ ______ ______ ______ Debt due within one year Bank loans (1,250) 1,250 (1,250) (1,250) Loan notes (3,144) 4,334 (2,500) (1,310) Finance lease creditor (503) 516 (266) (253) ______ ______ ______ ______ (4,897) 6,100 (4,016) (2,813) ______ ______ ______ ______ Debt due after one year Finance lease creditor (434) - 222 (212) Bank loans (8,438) (1,999) 1,250 (9,187) ______ ______ ______ ______ (8,872) (1,999) 1,472 (9,399) ______ ______ ______ ______ Total net debt (15,730) 6,964 (2,544) (11,310) ______ ______ ______ ______ 11. Pension Costs Pension costs SSAP24 basis The most recent actuarial valuation of the defined benefit section was at 31 October 2000. At the valuation date the defined benefit section had assets with a total market value of #15.9m, which represented approximately 101% of the value of the benefits that had accrued to members, after allowing for expected future increases in pensionable pay for defined benefit members. Pension costs FRS17 basis The last full valuation of 31 October 2000 has been updated to 31 December 2002 by qualified independent actuaries, using revised assumptions that are consistent with the requirements of the new accounting standard, FRS17. The new standard requires certain disclosures this year under the transitional arrangements. In summary, the UK defined benefits pension scheme has assets at a current market value of #12.8m (2001:#14.7m) and liabilities, discounted at the AA bond yield, of #19.5m (2001:#19.2m). Using this valuation method, there is a deficit of #6.7m (2001:#4.5m) which is partially offset by deferred tax of #2.0m (2001:#1.3m) giving a net deficit of #4.7m (2001:#3.2m). The defined benefit section has been closed to new entrants. The contribution rates for members have been increased from 5% to 9% of pensionable salary and that for the Company increased from 12% to 20% of pensionable salary. 12. The accounts for the year ended 31 December 2002 were approved by the Directors on 1 April 2003. This information is provided by RNS The company news service from the London Stock Exchange END FR NKDKNABKDCNN
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