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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:8131V Chemetall PLC 25 February 2004 Chemetall PLC Preliminary Results for the fifteen months ended 31 December 2003 Chairman's statement The past fifteen months have proved to be challenging for the group due to the continued weak trading environment within the UK manufacturing sector. However, this has not deflected us from our strategic plan and we have been able to offset some of the fall in demand and customer closures in our Automotive and General Industry business by significant gains in the Aerospace and Performance Products divisions. Furthermore, our Middle East business has shown continued growth. Results and dividends Despite the continuing difficult trading conditions, the Group generated a profit on ordinary activities before taxation of #3.2 million (twelve months ended 30 September 2002: #2.5 million) with a turnover for the fifteen months of #16.8 million (twelve months ended 30 September 2002: #13.8 million). The Group continues tohold substantial loan assets of #80.9 million (30 September 2002: #74.7 million) with other Chemetall GmbH group companies which generate interest income and exchange profits or losses, further details of which are provided in the Operating and financial review. Preference dividends continue to be paid on the normal due dates. Change of ultimate parent undertaking In October 2003 we announced that our ultimate holding company, mg technologies ag ('mg') intends to sell its chemical business, Dynamit Nobel ('DN'), of which Chemetall PLC is a part. 'mg' has taken the decision to concentrate on its engineering businesses. The change is seen as positive as both 'DN' and Chemetall groups are strong performers in their own right. The outcome of the bidding process is likely to take several months and in the meantime Chemetall PLC continues with "business as usual". Litigation costs - Weir In October 1998, before Chemetall GmbH acquired Brent International PLC (now Chemetall PLC), the former Brent International disposed of its Imaging Management business to Weir Technology Ltd ('Weir'). Subsequently, the Group received claims from Weir for damages for alleged misrepresentation and claims under a tax indemnity in the sale agreement. The Group defended elements of these claims and #0.9 million was paid during the period to meet the claim and discharge the liability. Outlook The outlook for the business in 2004 and beyond is positive. The project list is strong which, together with an expected easing of market conditions as the year progresses, strengthens our optimism for the future. We are in the process of restructuring our sales divisions in order to help us to target our markets and improve our responsiveness to changes in them. We will continue to tightly control and monitor our personnel and other operating overheads. People The Group remains committed to the full development and training of its employees. Flexibility and multi-skilling are seenas an important element in order to develop and grow the business. Alec Daly CBE Chairman Operating and financial review Divisional analysis The Aerospace Division's activities continue to thrive. Aerospace and defence sales inthe fifteen months to 31 December 2003 were 25% above the comparable previous fifteen-month period. Demand continues to grow for our range of aluminium cleaning and deoxidising materials and we continue to act as a preferred supplier of speciality chemicals for Rolls Royce Aerospace Engines. Automotive Division sales suffered during 2003 mainly as a consequence of the closures in 2002 of the Ford plant at Dagenham and the Vauxhall plant at Luton. We have recruited a new business development manager to enable us to redirect our approach to this important market sector. We have set a modest growth target for 2004 and early indications are positive. Our Advanced Technologies Division took the brunt of the downturn in demand and customer closures. However, we were able to offset some of this effect through some key new business gains particularly in the automotive components, heavy equipment, plastic fascia and general industrial market areas. The Performance Products Division (PPD), which targets service-orientated industries, has performed well in the latter half of 2003. Over 150 smaller customers were added to our portfolio in 2003 and significant success was achieved in the bottled water cleaning, industrial coolant and road transport cleaning sectors. Chemetall PLC has recently been accredited with the ISO9000:2000 quality standard. This is a difficult accreditation to win and one that should provide us with a competitive edge. Furthermore, we are anticipating approval by March 2004 for the new automotive industry standard ISO TS16949/9000:2000. Profit performance and analysis Turnover for the fifteen month period to 31 December 2003 was #16.8 million (twelve months ended 30 September 2002: #13.8 million) with profit on ordinary activities before taxation being #3.2 million (twelve months ended 30 September 2002: #2.5 million). The increased profit before taxation over the previous twelve-month period is attributable mainly to the effect of favourable exchange movements on the substantial loans held by members of the Group with Chemetall GmbH or its subsidiaries. At 31 December 2003 the Group held loans, including interest accrued thereon, totalling #80.9 million (30 September 2002: #74.7 million). Interest earned on these loans in the fifteen-month period totalled #3.3 million (Twelve months ended 30 September 2002: #2.7 million). Favourable exchange movements in the euro, partially offset by a weaker dollar, resulted in a #1.2 million gain for the period (compared to an exchange loss of #0.8 million in the twelve months to 30 September 2002). The Group paid #0.9 million to discharge a claim from Weir Technology Limited ('Weir') following arbitration concerning the disposal bythe Group to Weir of its Imaging Management business in October 1998. This cost is disclosed as an exceptional operating item due to its size. During the period, the Group disposed of it's one remaining freehold-interest, that of land at Stanton for #46,000. Cash flow and financing The net cash inflow from operating activities before exceptional operating items was #0.9 million (twelve months ended 30 September 2002: #0.3 million). Exceptional operating items of #850,000 related to the Weir Litigation costs mentioned above. Cash inflow of #2.0 million was received from Chemetall GmbH for payment of part of the interest accrued on the loans. 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 period end, the Group had net cash balances of #0.2 million. Taxation The Group showed a net tax charge of #0.6 million (Twelve months ended 30 September2002: #1.1 million) benefiting from the adjustments and deductions relating to prior years and increase in deferred tax asset mainly arising from losses brought forward from prior periods. 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. Consolidated profit and loss account for the 15 month period ended 31 December 2003 15 months ended Year ended Note 31 December 30 September 2003 2002 #000 #000 Group turnover 2 16,820 13,794 Cost of sales (8,492) (6,516) ----------- ----------- Gross profit 8,328 7,278 Selling and distribution (6,325) (5,232) costs Administrative expenses (3,530) (1,811) Other operating income 125 82 ----------- ----------- Operating (loss)/profit before exceptional operating items included in administration expenses (552) 317 Exceptional operating item - (850) - litigation costs ----------- ----------- Operating (loss)/profit (1,402) 317 Profit on sale of properties 6 357 held for resale ---------- ----------- (Loss)/profit on ordinary (1,396) 674 activities before interest Net interest receivable and 4 4,568 1,871 similar income ---------- ----------- Profit on ordinary 3 3,172 2,545 activities before taxation Taxation on profit on (628) (1,053) ordinary activities ---------------- ---------------- Profit for the financial 2,544 1,492 period Dividends on equity and non 5 (1,350) (1,699) equity shares ---------------- ---------------- Retained profit/(loss) for 1,194 (207) the period ================ ================ The results for the current and preceding financial period are derived from continuing operations. Consolidated balance sheet at 31 December 2003 Note 31 December 31 December 30 September 30 September 2003 2003 2002 2002 #000 #000 #000 #000 Fixed assets Intangible 2,906 3,267 Tangible 1,443 1,630 --------------- -------------- 4,349 4,897 Current assets Investments - 40 Stocks 1,082 1,177 Debtors 85,500 80,241 Cash at bank 203 3 and in hand -------------- --------------- 86,785 81,461 Creditors: (3,838) (4,788) amounts falling due within one year -------------- --------------- Net current assets 82,947 76,673 --------------- -------------- Total assets less 87,296 81,750 current liabilties Provisions for (667) (758) liabilities and charges --------------- -------------- Net assets 86,629 80,812 =============== ============== Capital and reserves Called up share capital 18,889 18,889 Share premium account 29,757 29,757 Profit and loss account 37,983 32,166 --------------- -------------- Shareholders' 6 86,629 80,812 funds =============== ============== Equity 74,629 68,812 Non-equity 12,000 12,000 --------------- -------------- 86,629 80,812 =============== ============== Consolidated cash flow statement for the 15 month period ended 31 December 2003 Note 15 months ended 31 December Year ended 30 September 2003 2002 #000 #000 #000 #000 Net cash 7 (22) 257 (outflow)/ inflow from operating activities Returns on investments and servicing of finance Interest received 2,056 - Interest paid (73) (28) Dividends paid on (1,080) (1,080) non-equity shares ------------- ------------- Net cash inflow/(outflow) from returns on investments and servicing of finance 903 (1,108) Taxation (434) (993) Capital expenditure and financial investment Purchase of tangible (118) (99) fixed assets Purchase of intangible (6) (30) fixed assets Sale of properties 46 1,636 for resale ------------- ------------- Net cash (outflow)/ (78) 1,507 inflow from capital expenditure ------------- ------------- Increase/ 9 369 (337) (decrease) in cash in the period ============= ============= Consolidated statement of total recognised gains and losses for the 15 months ended 31 December 2003 15 months ended Year ended 31 December 30 September 2003 2002 #000 #000 Profit for the financial period 2,544 1,492 Exchange difference on the 4,623 461 retranslation of net investments and related borrowings ---------------- ---------------- Total recognised gains and losses 7,167 1,953 relating to the period Prior period adjustment - 963 ---------------- ---------------- Total gains andlosses recognised 7,167 2,916 since last annual report ================ ================ Notes to the prliminary announcement 1. Accounting policies Basis of preparation The unaudited preliminary results for the fifteen months ended 31 December 2003 have been prepared in accordance with UK generally accepted accounting principles. The accounting policies applied are those set out inthe Group's Annual Report and Accounts for the year ended 30 September 2002. The Group has followed the transitional arrangements of FRS17 "Retirement Benefits". Basis of consolidation The consolidated financial statements include the financial statements of the Company and its subsidiary and associated undertakings made up to 31 December 2003. The acquisition method of accounting has been adopted. Under this method the results of subsidiary undertakings acquired or sold during the period 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. 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 #850,000 to discharge a claim from Weir Technology Limited ('Weir') following arbitration concerning the disposal by the Group to Weir of its Imaging Management business in October 1998. 4. Net interest receivable and similar income 15 months ended Year ended 31 December 30 September 2003 2002 #000 #000 Interest receivable and similar income Wholly receivable within fiveyears: Loans to group undertakings 3,335 2,739 On cash balances 74 2 Exchange gain/(loss) on loans to 1,232 (842) group undertakings ---------------- ---------------- 4,641 1,899 Interest payable and similar charges Wholly repayable within five years: Bank overdrafts (73) (28) ---------------- ---------------- Net interest receivable 4,568 1,871 ================ ================ 5. Dividends and other appropriations 15 months ended Year ended 31 December 30 September 2003 2002 #000 #000 10p ordinary shares Interim dividend - 619 9% redeemable preference shares Dividend payable 1,350 1,080 ---------------- ---------------- 1,350 1,699 ================ ================ 6. Reconciliation of movements in shareholders funds 31 December 30 September 2003 2002 #000 #000 At beginning of the period 80,812 80,558 Profit/(loss) for the period 1,194 (207) Other recognised gains and losses 4,623 461 in the period (net) ---------------- ---------------- At end of the period 86,629 80,812 ================ ================ 7. Reconciliation of operating profit to operating cash flows 15 months ended Year ended 31 December 30 September 2003 2002 #000 #000 Operating (loss)/profit before (552) 317 exceptional operating items Exceptional operating item - (850) - litigation costs paid ---------------- ---------------- Operating (loss)/profit (1,402) 317 Depreciation, amortisation and 672 479 impairment charges Exchange (loss)/gain on loans to - (843) subsidiary undertakings Decrease/(increase) in stocks 95 (74) Decrease in debtors 1,243 773 Decrease in creditors and other (630) (395) provisions ---------------- ---------------- Net cash (outflow)/inflow from (22) 257 operating activities ================ ================ 8. Analysis of net funds At the beginning Exchange At the end of the period Cash flow movement Other of the period #000 #000 #000 #000 #000 Cash at bank 3 200 - - 203 Bank loans and overdrafts (169) 169 - - - ------ 369 Loans to group 74,725 (1,982) 4,083 4,040 80,866 undertakings ----------- -------- ------- ------ --------- Net funds 74,559 (1,613) 4,083 4,040 81,069 =========== ======== ======= ======= ========= 9. Reconciliation of net cash flow to movement in net funds 15 months ended Year ended 31 December 30 September 2003 2002 #000 #000 Increase/(decrease) in cash in 369 (337) the period Cash flow from movement in funds (1,982) - in the period ---------------- ---------------- Change in net funds resulting (1,613) (337) from cash flows Non-cash movements on loans (see 4,040 9,810 below) Translation differences 4,083 (415) ---------------- ---------------- Movement in net funds in the period 6,510 9,058 Net funds at beginning of the period 74,559 65,501 ---------------- ---------------- Net funds at the end of the period 81,069 74,559 ================ ================ Non-cash movements on loans consist of accrued and current interest being rolled up into the principal amounts on existing loan to group undertakings. 10. Declaration The results for the fifteen months ended 31 December 2003 are unaudited. The results for the year ended 30 September 2002 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 fifteen months ended 31 December 2003 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 newsservice from the London Stock Exchange END FR BXGDDDGDGGSU
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