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Name | Symbol | Market | Type |
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Chemetall 9%Pf | LSE:CHM | London | Preference Share |
Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
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0.00 | 0.00% | 100.00 | 0 | 01:00:00 |
RNS Number:6504J Chemetall PLC 11 March 2005 Chemetall PLC Preliminary Results for the year ended 31 December 2004 Chairman's report Despite the continued challenging trading conditions in the UK manufacturing sector, Chemetall PLC was able to grow its third party sales by 5% during 2004. Particularly pleasing was the growth in new automotive component and aerospace business which more than offset a further decline in general manufacturing industry sales. The Middle East markets achieved their ambitious sales plan and new business in the rail sector gives cause for optimism. Results and dividends During the year the Group generated a profit on ordinary activities before taxation of #1.9 million (fifteen months ended 31 December 2003: #3.2 million) with a turnover of #13.9 million (fifteen months ended 31 December 2003: #16.8 million). The result for the fifteen month period to 31 December 2003 included exchange gains of #1.2 million on loans held with other Chemetall GmbH group companies denominated in foreign currencies which were converted into sterling prior to the current period. On 30 November 2004 we acquired the aircraft sealant surface treatment business of Chemetall Speciality Chemicals Ltd for #0.8 million. The fair value of net assets acquired was #0.5 million. The Group's loan assets, including any exchange movements and interest accrued thereon, totalled #82.3 million at 31 December 2004 (31 December 2003: #80.9 million). Preference dividends continue to be paid on the normal due dates. Ultimate parent undertaking On 1 August 2004 our ultimate holding company, mg technologies ag ('mg') sold its chemical business, which includes Chemetall PLC, to the Rockwood Specialties Group Inc., a US-based speciality chemicals company. The change in ownership enabled the Chemetall Surface Treatment Division as a whole to review its core business strategy and to set in place firm growth plans for the future. Funds are available for future strategic acquisition and technology additions, which should in turn ensure that the business as a whole continues to deliver a strong performance going forward. Pension Scheme Due to the sale of the Chemetall business it was legally necessary to change the pension arrangements of certain employees. During the period these employees transferred from the mg technologies UK pension scheme to the Chemetall UK scheme. This has resulted in the Company incurring a charge of #0.8 million to maintain these employees' pension entitlements. Board There have been a few changes in the board during the year. Thomas Klatt resigned as non-executive Director in April and Ernst-Joachim Molter resigned as Chief Executive Director in September following the sale of the Chemetall group to Rockwood in August. I would like to thank them both for their efforts. In August Matthias Wilhelm Stoermer of Chemetall Frankfurt was appointed to the board. Employees On behalf of the board I would like to thank our employees for their continuing commitment to our business. Chemetall PLC continues to invest in both internal and external training and development of all employees. The company has maintained its Investors in People registration. Outlook We are confident that the third party sales growth trend will continue through to 2005 with significant new business opportunities, particularly in the automotive and aluminium sectors. Price increases will be necessary to maintain profit margins that have come under pressure as the company suffers the impact of significant key raw material price increases. Alec Daly CBE Chairman Operating and financial review Divisional analysis The Aerospace Division ended the year at 8.2% over plan. Demand for aircraft sealant and corrosion protective compounds at Airbus was particularly strong. We maintained our position as the first tier supplier to Rolls Royce Aerospace Engines. Overall demand in the airframe overhaul, repair and maintenance sector was very strong. The Automotive Division finished the year on plan with sales slightly ahead of the prior year and expect that new business recently won will result in a growth in sales during 2005. However, raw material price increases may adversely affect revenues from this sector where price improvements are difficult to implement. In our Advanced Technologies Division, the automotive components business unit finished the year strongly at 8.4% above plan thanks mainly to some significant new business gains. In contrast, general industries business unit sales suffered following the closure of six key customers. New business is expected for the Group's new chrome free aluminium technologies especially in the architectural aluminium sector where industry standards have now been met. Significant progress was made in the steel industry throughout the year. Chemetall PLC has been successful in winning a significant new contract for the supply of cleaning technology. The Performance Products Division (PPD) continued to enjoy slow but steady growth. Sales of maintenance chemicals to airport authorities, traffic film remover to the road transport sector and front-end cleaners to the rail sector provide cause for optimism during 2005. Chemetall PLC was accredited to the new automotive industry standard TS169/40 during 2004. This accreditation was difficult to attain and helps to win us a competitive edge over many of our competitors. Acquisition On 30 November 2004 the aircraft sealant surface treatment business of Chemetall Speciality Chemicals Ltd was acquired. Details of this transaction are given in note 6. During the period the business contributed turnover of #0.1 million and broke even at operating profit level. Profit performance and analysis Turnover for the year to 31 December 2004 was #13.9 million (fifteen month period to 31 December 2003: #16.8 million) with profit on ordinary activities before taxation being #1.9 million (fifteen month period to 31 December 2003: #3.2 million). The prior period result includes the effect of a #1.2 million favourable exchange movement on a loan held by Chemetall PLC with Chemetall GmbH which was converted to Sterling during that period. At 31 December 2004 the Group held loans, including interest accrued thereon, totalling #82.3 million (31 December 2003: #80.9 million). Interest earned on these loans during 2004 totalled #2.9 million (fifteen months ended 31 December 2003: #3.3 million). The Group incurred a charge of #0.8 million to transfer the pensions arrangements of certain employees from the Metallgesellschaft Group Pension Scheme to the Chemetall UK Scheme following the change in ownership of the group in the year. Cash flow and financing The net cash inflow from operating activities before exceptional cash items was #1.5 million (fifteen months ended 31 December 2003: #0.8 million). Exceptional cash items of #0.8 million relate to the transfer of certain employees pension arrangements following the change in the Group's ultimate holding company. Payments of interest totalling #1.3 million on loans were received from Chemetall GmbH during the year. The funds received on payment of loan interest have been used to eliminate bank overdrafts; any surpluses are remitted to our holding company Chemetall GmbH. At the year-end, the Group had net cash balances of #0.3 million (fifteen months ended 31 December 2003: #0.2 million). During the year the Group joined a cash-pooling arrangement with other Rockwood companies in the UK. Taxation The Group's tax charge on profit is #0.4 million, representing an effective rate of 22.3%. The effective rate is lower than the UK corporation tax rate of 30% mainly due to adjustments and deductions relating to prior years. #2.2 million of tax credits associated with prior year's tax losses continue to not be recognised. Treasury Policies The Group's treasury policies, which are approved by the board, seek to eliminate risk from currency movements affecting sales and purchases denominated in foreign currencies. We use instruments such as forward currency sale or purchase contracts where practical and cost effective. Where appropriate, the Group's financial systems are able to transact business denominated in foreign currencies. Accounting changes The Company will be required to adopt International Financial Reporting Standards ('IFRS') with effect from 1 January 2005. An initial assessment of the impact on the Group's financial statements and processes has been made. Accordingly the Group's interim results to 30 June 2005 will be prepared in accordance with IFRS. Consolidated Profit and Loss Account for the year ended 31 December 2004 Note Year ended 31 15 months ended December 31 December 2004 2003 #000 #000 Group turnover 2 13,885 16,820 Cost of sales (7,710) (8,492) Gross profit 6,175 8,328 Selling and distribution costs (5,397) (6,325) Administrative expenses (1,905) (3,530) Other operating income 108 125 --------------------- -------- -------- -------- Operating loss before exceptional operating items (219) (552) Exceptional operating items - litigation costs - (850) - pension costs (800) - --------------------- -------- -------- -------- Operating loss (1,019) (1,402) Profit on sale of properties held for resale - 6 Loss on ordinary activities before interest (1,019) (1,396) Net interest receivable and similar income 4 2,948 4,568 Profit on ordinary activities before taxation 3 1,929 3,172 Taxation on profit on ordinary activities (430) (628) Profit for the financial period 1,499 2,544 Dividends on equity and non-equity shares 5 (1,080) (1,350) Retained profit for the period 419 1,194 The results for the current and preceding financial period are derived from continuing operations. Consolidated Balance Sheet at 31 December 2004 Note 31 December 31 December 2004 2003 #000 #000 #000 #000 Fixed assets Intangible assets 2,890 2,906 Tangible assets 1,297 1,443 4,187 4,349 Current assets Stocks 1,124 1,082 Debtors 86,397 85,500 Cash at bank and in hand 300 203 87,821 86,785 Creditors: amounts falling (4,284) (3,838) due within one year Net current assets 83,537 82,947 Total assets less current liabilities 87,724 87,296 Provisions for liabilities and (629) (667) charges Net assets 87,095 86,629 Capital and reserves Called up share capital 18,889 18,889 Share premium account 29,757 29,757 Profit and loss account 38,449 37,983 Shareholders' funds 7 87,095 86,629 Equity 75,095 74,629 Non-equity 12,000 12,000 87,095 86,629 Consolidated Cash Flow Statement for the year ended 31 December 2004 Note Year ended 31 December 2004 15 months ended 31 December 2003 #000 #000 #000 #000 Net cash inflow/ (outflow) from operating 8 671 (22) activities Returns on investments and servicing of finance Interest received 1,282 2,056 Interest (2) (73) paid Dividends (1,080) (1,080) paid Net cash inflow from returns on investments and servicing 200 903 of finance Taxation (610) (434) Capital expenditure and financial investment Purchase of tangible fixed (164) (118) assets Purchase of intangible fixed assets - (6) Sale of properties for - 46 resale Net cash outflow from capital expenditure (164) (78) Increase in cash in the period 10 97 369 Consolidated Statement of Total Recognised Gains and Losses for the year ended 31 December 2004 Year ended 31 15 months ended December 31 December 2004 2003 #000 #000 Profit for the financial period 1,499 2,544 Exchange difference on the retranslation of net investments and related borrowings 47 4,623 Total gains recognised since last annual report 1,546 7,167 Notes to the Preliminary Statement 1.Accounting policies Basis of preparation The unaudited preliminary results for the year ended 31 December 2004 have been prepared in accordance with UK generally accepted accounting principles. The accounting policies applied are those set out in the Group's Annual Report and Accounts for the fifteen months ended 31 December 2003. The Group has followed the transitional arrangements of FRS 17 "Retirement Benefits" in these financial statements. Basis of consolidation The consolidated financial statements include the financial statements of the Company and its subsidiary undertakings made up to 31 December 2004. The acquisition method of accounting has been adopted. Under this method the results of subsidiary undertakings acquired or sold during the year are included in the consolidated profit and loss account from or to their respective dates of acquisition or disposal. Where appropriate, the financial statements of overseas subsidiary undertakings are adjusted to conform to the Group's accounting policies. 2. Turnover All activities are derived from the development, manufacture and marketing of specialised industrial chemicals. 3. Profit on ordinary activities before taxation Profit on ordinary activities before taxation is stated after charging #800,000 to transfer the pension arrangements of certain employees from the Metallgesellschaft Group Pension Scheme to the Chemetall UK Scheme following the change in ownership of the group in the year. 4. Net interest receivable and similar income Year ended 15 months ended 31 December 2004 31 December 2003 #000 #000 Interest receivable and similar income Loans to group undertakings 2,949 3,335 On cash balances 1 74 Exchange gain on loans to group undertakings - 1,232 2,950 4,641 Interest payable and similar charges Bank overdrafts (2) (73) Net interest receivable 2,948 4,568 5. Dividends and other appropriations Year ended 15 months ended 31 December 2004 31 December 2003 #000 #000 9% redeemable preference shares Dividend paid 540 810 Dividend proposed 540 540 1,080 1,350 6. Acquisitions in the year On 30 November 2004 Chemetall PLC acquired the aircraft sealant surface treatment business of Chemetall Speciality Chemicals Ltd. The following table analyses the preliminary fair value of the net assets acquired: #000 Stocks 16 Debtors 519 535 Consideration - on account with Chemetall Speciality Chemicals Limited 785 Goodwill 250 The goodwill arising from the above acquisition is amortised over 25 months. The turnover and results of the acquired business have not been shown on the face of the profit and loss account as they are not considered material. The turnover and operating profit of the acquired entity included in the profit and loss account are: #000 Turnover 104 Operating profit 5 7. Reconciliation of movements in shareholders funds 31 December 31 December 2004 2003 #000 #000 At 1 January 2004 86,629 80,812 Profit for the year 419 1,194 Other recognised gains and losses in 47 4,623 the year (net) At 31 December 2004 87,095 86,629 8. Reconciliation of operating profit to operating cash flows 15 months ended 31 December 2004 31 December 2003 #000 #000 Operating loss before exceptional operating items (219) (552) Exceptional operating items (800) (850) Operating loss (1,019) (1,402) Depreciation, amortisation and impairment charges 576 672 (Increase)/decrease in stocks (42) 95 Decrease in debtors 800 1,243 Increase/(decrease) in creditors and other provisions 356 (630) Net cash inflow/(outflow) from operating activities 671 (22) 9. Analysis of net funds At the Cash flow Exchange Other At the end of beginning of movement the year the year #000 #000 #000 #000 #000 Cash at bank 203 97 - - 300 Loans to group undertakings 80,866 (1,503) 50 2,948 82,361 Net funds 81,069 (1,406) 50 2,948 82,661 10. Reconciliation of net cash flow to movement in net funds 15 months ended 31 December 31 December 2004 2003 #000 #000 Increase in cash in the period 97 369 Cash flow from movement in funds in the period (1,503) (1,982) Change in net funds resulting from cash flows (1,406) (1,613) Non-cash movements on loans (see 2,948 4,040 below) Translation differences 50 4,083 Movement in net funds in the 1,592 6,510 period Net funds at beginning of the 81,069 74,559 period Net funds at the end of the 82,661 81,069 period Non-cash movements on loans consist of accrued and current interest being rolled up into the principal amounts on existing loan to group undertakings. 11. Declaration The results for the year ended 31 December 2004 are unaudited. The results for the fifteen months ended 31 December 2003 are an extract from the full accounts for that period and have been delivered to the Registrar of Companies; the report of the auditors on those accounts was unqualified. The accounts for the year ended 31 December 2004 will be posted to all shareholders shortly. The report of the auditors on those accounts is expected to be unqualified. The financial information in this statement does not constitute full statutory accounts within the meaning of section 240 of the Companies Act 1985. Ends For further information, please contact: Rob Rydings, Chemetall PLC Tel: 01908 361817 This information is provided by RNS The company news service from the London Stock Exchange END FR BDGDXXUBGGUB
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