Intnl Tool & Supply - Interim Results

RNS No 8999a
INTERNATIONAL TOOL & SUPPLY PLC
31st October 1997
 

International Tool & Supply PLC ("ITS")
Interim Results
for six months ended 30th September 1997
Chairman's Statement
 
I am pleased to announce the financial results of International
Tool & Supply plc for the six months to 30 September 1997.  The
Company's continuing operations recorded a profit on ordinary
activities before interest of $1.2 million compared to a loss of
$0.8 million in the same period last year.  After deducting
interest and taxes the Company's profit from continuing
operations was $1.0 million.
 
The Company disposed of its Environmental division on 25
September 1997 for cash proceeds of $1.34 million, which was
approximately equal to its net book value.  The division had made
a loss of $0.7 million in the current half year, reducing the
Company's total profit to $0.3 million for the six month period. 
In the first half of the preceding year, the Company's total
profit was $1.3 million, however that included a gain of $2.1
million on redemption of convertible loan notes.
 
Turnover from continuing operations for the six months to 30
September 1997 amounted to $40.4 million ($41.5 million including
discontinued operations) compared to total turnover of $21.0
million for the first half last year, an increase of
approximately 92%.  The first half increase represented an across
the board improvement in turnover from each of the Company's
three remaining divisions.
 
Administrative expense from continuing operations increased
approximately 11% in the first 6 months of the year.  This
compares favourably to the 92% increase in turnover. 
Nevertheless, the Company's ongoing cost containment programme
is focussed on rationalising the administrative cost structure
to the maximum extent possible.

Operating profit from continuing operations was especially
encouraging and represented a significant turnaround from the
prior period.  Each division, other than Environmental,
contributed positively to first half results.  Moveover, the
trading outlook in oilfield services has improved significantly
this fiscal year, particularly for selected products and market
areas.
 
The disposal of the Environmental division is part of the
Company's strategic plan to focus operations on these more
lucrative activities.  In this plan, operations with higher
profit margins and those with dominant positions in niche markets
will be favoured.  This will allow the Company to concentrate its
resources in the most effective manner and maximise the return
on invested capital.
 
We believe that shareholder value will be best realised by
combining a profitable operation with a simplified and cohesive
business strategy.  As we move through the second half of the
fiscal year and beyond, we will adhere to this business strategy
and seek all opportunities to implement it to the benefit of our
shareholders.
 
Howard Wolf
Chairman
 
                 International Tool & Supply PLC
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 1997
                  (US$)
                  Continuing  Discontinued
                  operations  operations     Total     Total 
                  Period      Period         Period    Period
                  ended       ended          ended     ended
                  30.9.97     30.9.97        30.9.97   30.9.96
                  $000        $000           $000      $000
 
TURNOVER          40,355      1,110         41,465      21,023
Cost of Sales    (34,552)      (902)       (35,454)    (17,691)
                  --------     ------         -------     -------
GROSS PROFIT       5,803        208          6,011       3,332
 
Administration
expenses          (4,615)       (814)         (5,429)     (4,141)
                 --------    -------        -------     -------
OPERATING PROFIT/
(LOSS)             1,188        (606)            582        (809)
 
EXCEPTIONAL ITEMS
Loss on
disposal of
discontinued
operations         -            (44)           (44)        -
                 --------    --------       -------     -------
 
PROFIT/(LOSS)
ON ORDINARY
ACTIVITIES BEFORE
INTEREST             1,188        (650)           538       (809)
 
Interest 
receivable
and similar
income                143        -              143        136
Interest payable
and similar
charges               (233)        (70)          (303)       (55)
Gain on loan
notes redeemed (3)   -           -              -        2,059
                    --------    --------       -------    -------
 
PROFIT/(LOSS)
ON ORDINARY
ACTIVITIES BEFORE
TAXATION            1,098         (720)         378      1,331
 
Tax on profit/
(loss) on 
ordinary 
activities             (65)       -               (65)       (50)
                    --------    --------       -------    -------
PROFIT/(LOSS)
ON ORDINARY
ACTIVITIES AFTER
TAXATION            1,033         (720)         313      1,281
                    --------    --------       -------    -------
EARNINGS PER
ORDINARY SHARE
(US CENTS)                                      0.1        0.5
                                             -------    -------
DIVIDENDS PER
SHARE (US CENTS)                                -         -
                                              -------    -------
 
Notes:

(1) Earnings per Ordinary Share is calculated on the profit for
the period and based on the weighted average number of shares
currently in issue.

(2) The currency of the primary economic environment in which the
Group operates and generates its net cash flow is US Dollars and
therefore this interim statement is prepared in US Dollars.

(3) US $3 million of the Company's Convertible Loan Notes were
repurchased for approximately 31% of their normal value in 1996. 
The repurchase price represents an amount less than the
cumulative remaining interest due on the debt.

(4) The financial information given above does not constitute
statutory accounts within the meaning of Section 240 of the
Companies Act of 1985. The statutory accounts of the Group for
the year ended 31 March 1997 on which the auditors gave an
unqualified report have been filed with the Registrar of
Companies.

(5) Copies of this announcement will be posted to shareholders
and are available at the Company's registered office: 61 Woodside
Road, New Malden, Surrey, KT3 3AW.
 
END

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