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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:6317G Chemetall PLC 27 January 2003 On behalf of: Chemetall PLC Date: 27 January 2003 Chemetall PLC Annual Results Year Ended 30 September 2002 Chairman's statement In common with many UK oriented manufacturing businesses, the Group has had to endure a tough business year. Customers operating within the key industry sectors serviced by our product portfolio are taking 7.5% less than one year ago. Additionally several of our larger customers have announced their closure. We have been able to offset the fall in demand and the closure effect by winning significant amounts of new business. Results and dividends In the twelve months to 30 September 2002 turnover fell by 6% to #13.8 million (2001: #14.7million). This produced an operating result before exceptional items of #0.3 million (2001: #0.9 million). An exceptional profit of #0.4 million arose mainly on the sale of the ex-Brent International head office property. The Group generated a profit on ordinary activities before taxation of #2.5 million (2001: #5.6 million). The result includes #1.9 million of interest, net of exchange movements, earned on loans held by members of the Group with Chemetall GmbH or one of its subsidiaries. An interim ordinary dividend of 0.009p per share (2001: nil) was paid in the year to our ordinary shareholder, Chemetall GmbH. Preference dividends continue to be paid on the normal due dates. Operational Review Our success in winning new business has enabled us to offset the economic downturn and the effect of customer closures. Approximately 15% of turnover in the year ended 30 September 2002 was achieved as a result of new business won within the past eighteen months. We continue to grow our Performance Products Division (service industries), particularly in the mass passenger transport (road and rail cleaning chemicals) and hard surface hygiene sectors. Gross profit margins recovered well from our poor first-half position mainly due to better raw material buying and some price improvement. We have continued to keep tight control of our other operating expenditure. We have also reduced group headcount by 9% over the course of the financial year in order to keep the business lean enough to withstand the pressures on productivity that have come as a result of reduced demand in the UK manufacturing sector. Outlook The current economic outlook indicates that there will be a slight improvement in industrial sector demand for our products in 2003. We are also confident of winning new business especially in our Aerospace and Performance Products Divisions. The Middle East market for which we are also responsible is showing significant sales growth. For these reasons, Chemetall PLC is anticipating modest sales growth for 2003 and beyond. People On behalf of the board, I would like to thank all our employees for their dedication and professionalism throughout the year which has enabled us to perform well in difficult trading conditions. It is at times like this when good employees and good trading partners can ensure success. Alec Daly CBE Chairman Operating and financial review Results Turnover for the year was #13.8 million, a decrease of 6% over last year. This was principally due to the continuing downturn in the UK manufacturing sector. Profit on ordinary activities before taxation was #2.5 million (2001: #5.6 million). This fall was due to several factors, most significantly the decrease in turnover, the effect of adverse exchange movements, and a reduction in rates of interest on the loans held by members of the Group with Chemetall GmbH or its subsidiaries. The Group held loans, including interest accrued thereon, totalling #74.7 million at the 30 September 2002 (2001: #72.4 million). Interest earned on these loans was #2.7 million in the year (2001: #4.0 million). The reduction in interest earned compared to last year was mainly due to the decrease in interest rates and the repayment and restructuring of some of the loans. Exchange rates had an adverse impact of #0.8 million loss on the net interest receivable for the year compared to an exchange gain of #0.8 million in 2001. This was largely due to a weaker Dollar, only partially offset by a stronger Euro. An exceptional profit of #0.4 million arose from the disposal of two freehold properties, the ex-Brent International head office at Iver and St Helens. Only one freehold-interest now remains, that of land at Stanton, classified as current asset investment with a net book value of #40,000. Cash Flow The net cash inflow from operating activities was #0.3 million (2001: #0.4m). Net cash inflow of #1.6 million arose as a result of the disposal of freehold properties. Capital expenditure payments increased to #99,000 (2001: #1,000). Taxation The Group showed a net tax charge of #1.1 million (2001: #1.7 million, restated). 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 Standards The Group has adopted FRS19, Deferred Taxation. FRS19 requires full provision for deferred taxation in relation to all future obligations not dealt with as current tax. The consequent prior year adjustment is detailed in note 4 to the accounts. Consolidated profit and loss account for the year ended 30 September 2002 Note Restated 2002 2001 #000 #000 Group turnover 2 13,794 14,688 Cost of sales (6,516) (6,487) Gross profit 7,278 8,201 Selling and distribution costs (5,232) (5,179) Administrative expenses (1,811) (3,346) Other operating income 82 1,189 Operating profit 317 865 Profit on sale of properties held for resale 357 - Profit on ordinary activities before interest 674 865 Net interest receivable and similar income 1,871 4,741 Profit on ordinary activities before taxation 2,545 5,606 Taxation on profit on ordinary activities (1,053) (1,725) Profit for the financial year 1,492 3,881 Dividends on equity and non equity shares 3 (1,699) (1,080) Retained (loss)/profit for the year (207) 2,801 The results for the current and preceding financial year are derived from continuing operations. Consolidated balance sheet at 30 September 2002 Restated Note 2002 2002 2001 2001 #000 #000 #000 #000 Fixed assets Intangible assets 3,267 3,458 Tangible assets 1,630 1,789 4,897 5,247 Current assets Investments 40 1,319 Stocks 1,177 1,103 Debtors 80,241 81,525 Cash at bank and in hand 3 171 81,461 84,118 Creditors: amounts falling due within one year (4,788) (7,652) Net current assets 76,673 76,466 Total assets less current liabilities 81,570 81,713 Provisions for liabilities and charges (758) (1,155) Net assets 80,812 80,558 Capital and reserves Called up share capital 18,889 18,889 Share premium account 29,757 29,757 Profit and loss account 32,166 31,912 Shareholders' funds 4 80,812 80,558 Equity 68,812 68,558 Non-equity 12,000 12,000 80,812 80,558 Consolidated cash flow statement for the 12 month period ended 30 September 2002 Note 2002 2001 #000 #000 #000 #000 Net cash inflow from operating activities 6 257 394 Returns on investments and servicing of finance Interest received - 123 Interest paid (28) (44) Dividends paid on non-equity shares (1,080) (1,080) Net cash outflow from returns on investments and servicing of finance (1,108) (1,001) Taxation (993) (483) Capital expenditure and financial investment Purchase of tangible fixed assets (99) (1) Purchase of intangible fixed assets (30) - Sale of properties for resale 1,636 - Net cash inflow/(outflow) from capital 1,507 (1) expenditure Net cash outflow before financing (337) (1,091) Financing Debt due within one year: Repayment of short-term borrowings - (2,110) Repayment of loans due from group undertakings - 2,818 Net cash inflow from financing - 708 Decrease in cash in the period 8 (337) (383) Consolidated statement of total recognised gains and losses for the 12 months ended 30 September 2002 Restated 2002 2001 #000 #000 Profit for the financial year 1,492 3,881 Exchange difference on the retranslation of net investments and related 461 1,516 borrowings Total recognised gains and losses relating to the year 1,953 5,397 Prior period adjustment 963 Total gains and losses recognised since last annual report 2,916 Notes 1 Accounting policies Basis of preparation and accounting The unaudited preliminary results for the year ended 30 September 2002 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 nine months ended 30 September 2001. The Group has adopted FRS 18 "Accounting Policies" and FRS 19 "Deferred Tax". The comparative figures have been restated accordingly. Basis of consolidation The consolidated financial statements include the financial statements of the company and its subsidiary and associated undertakings made up to 30 September 2002. 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 and associated undertakings are adjusted to conform to the Group's accounting policies. 2 Segmental information All activities are derived from the development, manufacture and marketing of specialised industrial chemicals. The table below sets out information for each of the group's geographic areas of operation. Restated 2002 2001 Profit before Profit Turnover taxation Net Assets Turnover before Net Assets taxation #000 #000 #000 #000 #000 #000 UK 13,375 674 3,810 14,501 865 3,779 Middle East 419 - - 187 - - Continental Europe - - - - - - Total continuing operations 13,794 674 3,810 14,688 865 3,779 Net interest receivable - 1,871 - - 4,741 - Cash, loans and overdrafts - - 74,500 - - 73,720 Unallocated assets - - 2,502 - - 3,059 13,794 2,545 80,812 14,688 5,606 80,558 Turnover by destination is not materially different from the turnover by origin stated above. Notes (continued) 3 Dividends and other appropriations 2002 2001 #000 #000 10p ordinary shares Interim dividend 619 - 9% redeemable reference shares Dividend payable 1,080 1,080 1,699 1,080 4 Reconciliation of movements in shareholders funds Restated 2002 2001 #000 #000 At beginning of the year 80,558 73,682 Prior period adjustment - 2,559 Restated opening shareholders' funds 80,558 76,241 (Loss)/profit for the year (207) 2,801 Other recognised gains and losses in the year (net) 461 1,516 At end of the year 80,812 80,558 The group has adopted FRS 19 "Deferred Tax" in these financial statements. The adoption of this Financial Reporting Standard has given rise to a prior year adjustment and accordingly a restatement of comparatives. The impact of the restatement on the results of the current year for the company and group is an increase in the tax charge of #264,000 (2001: increase in tax charge of #325,000) and an increase in reported net assets of #699,000 (2001: increase of #963,000). 5 Contingent liabilities The Company has contingent liabilities in the form of performance guarantees totalling #1,451,215 (2001: #1,430,960) which expire within 12 months. The Company received from Weir Technology Limited in March 1999 notice of claims pursuant to the sale by Brent International BV (and the Company as Guarantor) of Verbeeck-Marien NV, part of the Imaging Management business sold to Weir in October 1998. Weir issued an Arbitration Notice on 30 July 2002 which alleges misrepresentation and seeks damages which Weir quantifies at approximately #7.2m. After taking advice, the Directors are defending the claim in its entirety. In addition, the Company received from Weir in October 2001 notice of claims relating to 1995 and 1996 under a tax indemnity in the sale agreement. The claims notified amount to approximately #300,000. The Directors will be defending elements of these claims. Weir intend to notify the Company in due course of claims under the tax indemnity relating to 1997 and 1998. Notes (continued) 6 Reconciliation of operating profit to operating cash flows 2002 2001 #000 #000 Operating profit 317 865 Depreciation, amortisation and impairment charges 478 573 Exchange (loss)/gain on loans to subsidiary undertakings (842) 817 Decrease in restructuring provision (100) (1,503) Increase in stocks (74) (99) Decrease in debtors 773 125 Decrease in creditors and other provisions (295) (384) Net cash inflow from operating activities 257 394 7 Analysis of net debt At the beginning Exchange At the end of the year Cash flow movement Other of the year #000 #000 #000 #000 #000 Cash at bank 171 (168) - - 3 Bank loans and overdrafts - (169) - - (169) Loans to group undertakings 69,682 - (415) 5,458 74,725 Loans from group undertakings (4,352) - - 4,352 - Net funds 65,501 (337) (415) 9,810 74,559 8 Reconciliation of net cash flow to movement in net debt 2002 2001 #000 #000 Decrease in cash in the year (337) (383) Cash inflow from financing - (708) Changes in net debt resulting from cash flows (337) (1,091) Non-cash movements on loans (see below) 9,810 - Translation differences (415) 2,016 Movement in net funds in the year 9,058 925 Net funds at beginning of the year 65,501 64,576 Net funds at the end of the year 74,559 65,501 Non-cash movements on loans consist of accrued and current interest being rolled up into the principal amounts on existing loan to group undertakings. Notes (continued) 9 Declaration The results for the year ended 30 September 2002 are unaudited. The results for the year ended 30 September 2001 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 30 September 2002 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 01908 361 817 John Coyle Clerkenwell Communications 0207 713 0900 07770 687 370 07699 727 796 (pager) This information is provided by RNS The company news service from the London Stock Exchange END FR BCGDBSDDGGXS
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