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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Litho Supplies | LSE:LTS | London | Ordinary Share | GB0005196257 | ORD 10P |
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% | 5.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
RNS Number : 2521C Litho Supplies PLC 29 August 2008 LITHO SUPPLIES Plc Results for the six months ended 30 June 2008 OVERVIEW Litho Supplies Plc, the leading supplier of consumable products, analogue and digital equipment and related services to the printing, graphic arts and corporate markets in the UK, announces its results for the six months ended 30 June 2008. Overview: - Pre-tax profits (after the add back of reorganisation costs) of £0.34m (£0.58m). - Sales of £25.38m (£22.41m). - Strong sales and profit performance by Graphic Arts Equipment Limited since its acquisition on 24 January 2008, with exclusive UK distribution rights for the Horizon and Perfecta print finishing ranges of equipment. - The board is recommending an interim dividend of 0.50p per share (2.00p) reflecting current market conditions, recent acquisition payments and the ongoing reorganisation of the business. Litho Supplies Chief Executive Michael Hammond said: "The first half of 2008 has been a challenging environment with the uncertainty in the financial markets affecting the confidence in many industry sectors with the resulting impact on the print market. Despite these conditions, I am pleased to report a good performance from our newly acquired subsidiary, Graphic Arts Equipment Limited, selling exclusively in the UK the Horizon and Perfecta ranges of print finishing equipment. In order to most effectively serve the printing and corporate market, we are continuing with the reorganisation of the Group and addressing the cost base, including the centralisation of our administration to our head office in Breaston, Derbyshire." Contacts: Michael Hammond, Chief Executive Tel: 01332 873921 Eddie Williams, Sales Director Tel: 01332 873921 Gerry Mitchell, Financial Director Tel: 0117 9724455 Mike Coe, Blue Oar Securities Plc Tel: 0117 933 0020 CHAIRMAN'S HALF YEARLY STATEMENT AND INTERIM MANAGEMENT REPORT Unaudited results for the six months ended 30 June 2008 The unaudited half year results for the six months ended 30 June 2008 show pretax profits of £0.34m (£0.58m) after adding back £0.30m (£0.09m) of costs associated with the reorganisation of the business. The profit before tax after reorganisation expenses was £0.04m (£0.49m) and sales for the period were £25.38m (£22.41m). Basic earnings per share for the six months ended 30 June 2008 were 0.16p (1.78p). As a comparison the basic earnings per share before reorganisation costs were 1.52p (2.21p). The uncertainties in the financial markets during the period have affected confidence in many sectors which in turn has impacted on the printing sector making market conditions extremely competitive. The Group has incurred higher fuel costs in the first six months of the year for the distribution of products to our customers. Also, whilst the majority of our purchases are in Sterling, we do have some products settled in Euros and Dollars and, particularly in relation to the Euro purchases, products have increased in price due to currency movements. Against the backdrop of an extremely competitive market, these increased costs have been passed on to customers where possible. In October 2007 we completed the acquisition of Graphica Plus Limited, trading as Andersons, serving the wide format printing, proofing and signage markets. Graphic Arts Equipment Limited (GAE) and Shinohara (UK) Limited (Shinohara) were also acquired in January 2008. GAE sells print finishing equipment, maintenance and support, with sole UK distribution rights for Horizon and Perfecta equipment, and Shinohara sells Shinohara printing presses. 423,602 ordinary shares of 10p each in Litho Supplies Plc were admitted to listing on 31 January 2008 at a price of 47p each as part of the consideration for Payrite Services Limited, the holding company of GAE. The cash consideration and working capital requirements of these acquisitions, together with the reorganisation costs of the business, have had a considerable impact on our bank balance compared to the previous year. Net cash balances at 30 June 2008 were £149,000 (£4.87m). Taking all these points into consideration and the cash costs of further reorganisation of the business that will be carried out in the second half, the board has considered it prudent to declare a reduced interim dividend of 0.50p (2.00p). The dividend will be paid on 31 October 2008 to shareholders on the register on 3 October 2008. The ex-dividend date is 1 October 2008. Trading performance Sales in the UK of consumable and media products which remain, with electronic and wide format equipment sales, the core activity of the business were £16.86m (£16.70m) with the complementary consumable products sold by Graphica Plus Limited, trading as Andersons, providing £1.27m of the total. We are continuing with our policy of the consolidation of end of line analogue products which continue to decline in order to maintain strict controls over stockholding of these products. Progress has been maintained with both telesales and on-line ordering during the period and both functions are extremely important, combined with the ongoing implementation of our new computer system, in order to service our customers as efficiently and cost effectively as possible. Further progress on the implementation of the computer system will be made in the second half. With the present economic conditions, sales of consumable products, including plates, pressroom, flexographic and wide format products, have all been extremely competitive with pressure on gross margins. We have worked hard on the sales mix of products, both to provide effective solutions for our customers and also to maintain gross margins. Sales and margins of pressroom products held up best in comparison to the other consumable products that we distribute. Sales of electronic equipment were £4.12m (£5.37m) with a number of customers deferring their capital investment decisions until confidence in the UK economy improves; whilst other customers have not been prepared to commit to the higher charges being requested by the finance providers. Complementary equipment sales were added by our acquisitions GAE and Shinohara of £4.10m and £299,000 respectively. The integration and reorganisation of Graphica Plus Limited, trading as Andersons, has continued in the first half of 2008. Progress is being made in expanding the active customer base of the company but while we believe the printing sector that Graphica Plus serves, such as the point of sale and signage markets, will display growth in the medium to long term, it has been quiet as the economy has slowed down. Some further reorganisation of Graphica Plus will therefore take place in the second half of the year. GAE has performed extremely well since acquisition in January 2008; it has a quality range of finishing products, a strong management team and has benefited from access to Litho Supplies' customer base. GAE has also had a positive start to the second half of the year. Following continued increases in energy costs and raw materials, many manufacturers are now implementing price increases which we will have to pass on to all of our customers. In April 2008 we exhibited at Sign & Digital UK at the NEC. The sales leads obtained at this exhibition were positive and will provide opportunities in the second half of the year, albeit that the signage and point of sale sectors have been affected by the present economic conditions. We were also in attendance at Drupa 2008, a large European exhibition held in Dusseldorf, Germany in May 2008. This exhibition provided good opportunities for complementary products and new supplier relationships to be identified for the future. Prospects The second half will to a great extent be dependent on confidence returning to the UK economy which, when it happens, should quickly filter through to the printing sector and our customer base. With our portfolio of printing products, including the complementary products, added to by our recent acquisitions, we are well placed to take advantage of increased trading activity. I am pleased to announce that with effect from August 2008, we secured the exclusive UK agency for sales and support of the Hamada range of offset presses. The brand is a market leader in the high street, inplant and commercial print sectors, and sits very nicely alongside our existing Shinohara range of presses and other equipment within our portfolio. We will be holding cost effective open house events at our GAE showroom commencing in September to demonstrate to our customers the full benefits offered by these press systems, together with the automated finishing products that we distribute. From the beginning of August 2008 we have taken on the exclusive UK distribution agreement for CGS, a print software product linked to consumable media sales opportunities. We are constantly reviewing and considering other opportunities in order to grow the business but also at the same time reorganising the Group to address the cost base; this reorganisation will continue in the second half of 2008 and will involve a number of one-off costs. We are also attending Total Print! Expo at Earl's Court in October 2008 with support from our suppliers to promote our full ranges of office equipment and finishing products such as Fastback and Fujipla. The relocation of our central administration and accounting function from Bristol to our Head Office at Breaston will take place at the end of September, at which time we will be appointing a new Finance Director to replace Gerry Mitchell who has held this position for the last 13 years. A further announcement will be made at the appropriate time. There is no doubt that we are operating in much tougher market conditions than we have seen for some time, but I consider that the reorganisation changes we continue to make to the structure of the business will strengthen our platform and enable us to look forward to 2009 with more confidence provided, of course, market conditions do not deteriorate further. As usual, I am extremely grateful to all of our customers and suppliers, both new and longstanding, for their continual support and I thank all of our employees for their loyalty and hard work over the last six months. B C Clark Chairman 29 August 2008 Litho Supplies Plc Responsibility statement We confirm that to the best of our knowledge: The condensed set of financial statements have been prepared in accordance with International Accounting Standard 34. By order of the Board Chief Executive Officer M J HAMMOND 29 August 2008 Litho Supplies Plc Condensed Consolidated Income Statement 6 months 6 months Year Ended ended ended 30 June 30 June 31 Dec 2008 2007 2007 Unaudited Unaudited Audited £'000 £'000 £'000 Continuing operations Revenue Sale of goods 25,385 22,410 43,254 Cost of sales 21,427 18,847 36,599 Gross profit 3,958 3,563 6,655 Distribution costs 1,315 1,094 2,235 Administrative expenses 2,328 2,011 3,888 Reorganisation costs 300 91 211 Profit from continuing operations before tax and net finance income 15 367 321 Finance costs 5 - 1 Finance income 26 122 198 Profit before tax 36 489 518 Income tax expense - 107 (6) Profit for the period 36 382 524 Attributable to: Equity holders of the company 36 382 501 Minority interest - - 23 36 382 524 Earnings per share -basic 0.16p 1.78p 2.33p -diluted 0.16p 1.65p 2.28p Litho Supplies Plc Condensed Consolidated Statement of Recognised Income and Expense 6 months 6 months Year Ended Ended ended 30 June 30 June 31 Dec 2008 2007 2007 Unaudited Unaudited Audited £'000 £'000 £'000 Income and expense recognised directly in equity Actuarial gain for the period (501) 1,732 1,834 Deferred tax credit (charge) 140 (520) (550) Net income recognised directly in equity (361) 1,212 1,284 Profit for the period 36 382 524 Total recognised income for the period (325) 1,594 1,808 Attributable to: Equity holders of the company (325) 1,594 1,785 Minority interest - - 23 (325) 1,594 1,808 Litho Supplies Plc Condensed Consolidated Balance Sheet 30 June 30 June 31 Dec 2008 2007 2007 Unaudited Unaudited Audited £'000 £'000 £'000 Assets Non-current assets Property, plant and equipment 876 410 547 Intangible assets 4,084 1,089 2,393 Deferred tax asset 1,093 966 979 6,053 2,465 3,919 Current assets Inventories 7,493 4,357 4,437 Trade receivables 10,451 10,513 9,260 Income tax receivable 113 26 208 Other current assets 1,880 1,195 1,284 Cash and cash equivalents 786 4,873 3,543 20,723 20,964 18,732 Total assets 26,776 23,429 22,651 Equity Equity attributable to equity holders of the parent Share capital 2,219 2,144 2,177 Share premium 13,744 13,420 13,587 Other reserves 511 511 511 Retained earnings (7,384) (6,554) (6,791) Minority interest in equity - - 23 Total equity 9,090 9,521 9,507 Liabilities Non-current liabilities Interest bearing loans and borrowings 34 2 - Retirement benefit obligation 2,594 3,038 2,531 2,628 3,040 2,531 Current liabilities Trade and other payables 12,095 9,552 9,263 Interest bearing loans and borrowings 827 2 2 Provisions 2,136 1,314 1,348 15,058 10,868 10,613 Total liabilities 17,686 13,908 13,144 Total equity and liabilities 26,776 23,429 22,651 Litho Supplies Plc Condensed Consolidated Statement of Changes in Equity Share Share Retained Other Total capital premium earnings reserves Equity £'000 £'000 £'000 £'000 £'000 At 1 January 2007 2,144 13,420 (7,719) 511 8,356 Actuarial gains - - 1,732 - 1,732 Deferred tax charge - - (520) - (520) Profit for the period - - 382 - 382 Total recognised income for the Period - - 1,594 - 1,594 Dividends - - (429) - (429) At 30 June 2007 2,144 13,420 (6,554) 511 9,521 Actuarial gains - - 102 - 102 Deferred tax charge - - (30) - (30) Profit for the period - - 142 - 142 Minority interest - - (23) - (23) Total recognised expense for the Period - - 191 - 191 Issue of shares 33 167 - 200 Dividends - - (428) - (428) At 31 December 2007 - Audited 2,177 13,587 (6,791) 511 9,484 Actuarial gains - - (501) - (501) Deferred tax credit - - 140 - 140 Profit for the period - - 36 - 36 Total recognized income for the Period - - (325) - (325) Issue of shares 42 157 - - 199 Dividends - - (268) - (268) At 30 June 2008 2,219 13,744 (7,384) 511 9,090 Litho Supplies Plc Condensed Consolidated Cash Flow 6 months 6 months Year ended ended Ended 30 June 30 June 31 Dec 2008 2007 2007 Unaudited Unaudited Audited £'000 £'000 £'000 Cash flows from operating activities Cash flows generated from operations (1,689) 162 17 Income tax paid 94 - - Net cash flows from operating activities (1,595) 162 17 Cash flows from investing activities Proceeds from sale of property, plant and equipment 7 100 12 Proceeds from sale of non-current assets held for sale - - 91 Interest received 32 133 216 Interest paid (5) - (1) Purchase of property, plant and equipment (209) (129) (296) Acquisitions (1,529) (10) (683) Net cash flows from investing activities (1,704) 94 (661) Cash flows from financing activities Payment of finance lease liabilities (11) (2) (4) Finance lease 184 - - Dividends paid to equity holders of the company (268) (429) (857) Net cash flows from financing activities (95) (431) (861) Net decrease in cash and cash equivalents (3,394) (175) (1,505) Net cash and cash equivalents at start of period 3,543 5,048 5,048 Net cash and cash equivalents at end of period 149 4,873 3,543 Notes to the Condensed Financial Statements: 1. The financial information in this half yearly statement for the six months ended 30 June 2008 and the comparative figures for the six months ended 30 June 2007 do not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The financial information for the full preceding year is extracted from the statutory accounts for the financial year ended 31 December 2007, as stated under IFRS as adapted for use in the European Union. Those statutory accounts, upon which the auditors issued an unqualified opinion, have been delivered to the Registrar of Companies. 2. The half yearly condensed financial statements for the six months ended 30 June 2008 have been prepared on the basis of the IFRS expected to be in issue for the year ending 31 December 2008 and in accordance with the consistent use of accounting policies that are disclosed in the audited consolidated financial statements for the year ended 31 December 2007. 3. The business risks disclosed in the directors' report and audited consolidated financial statements for the year ended 31 December 2007 were still applicable for the six months ended 30 June 2008 and the board considers they will still apply for the remainder of the financial year. Further information regarding potential business risks to the Group is disclosed above in the chairman's half yearly statement and interim management report. 4. EARNINGS PER SHARE The earnings per share have been calculated as follows: 6 months 6 months Year ended ended ended 30 June 30 June 31 Dec 2008 2007 2007 Profit available for equity Shareholders £36,000 £382,000 £501,000 Basic: Weighted average number of shares of 10p each in issue 22,122,072 21,436,148 21,499,847 Earnings per share 0.16p 1.78p 2.33p Diluted: Weighted average number of shares of 10p each in issue 22,122,072 23,121,148 21,944,847 Earnings per share 0.16p 1.65p 2.28p Taking into consideration the exercise price of the options, the number of dilutive potential shares from unexercised executive share options granted as at 30 June 2008 was nil and as at 30 June 2007 was 1,685.000. 5. DIVIDENDS The dividends paid in May 2008 and May 2007 were 1.25p per share and 2.00p per share respectively. The board is declaring an interim dividend for 2008 of 0.50p per share to shareholders on the register on 3 October 2008 and will be paid on 31 October 2008. These half yearly results do not reflect this dividend payable. 6. INTEREST BEARING LOANS AND BORROWINGS Effective Maturity June June December Interest rate 2008 2007 2007 % £'000 £'000 £'000 Current Bank loan 7.23 2008 2 - - Obligations under finance leases and hire purchase contracts 9.5 2009 188 2 2 Bank overdraft Base rate On demand +1.5 637 - - 827 2 2 Non-current Obligations under finance leases and hire purchase contracts 11.3 2010 34 - - 7. PROVISIONS FOR LIABILITIES AND CHARGES 6 months 6 months Year ended ended Ended 30 June 30 June 31 Dec 2008 2007 2007 £'000 £'000 £'000 Balance at 1 January 2,531 5,188 5,188 Pension cost for the period (11) 11 33 Contributions during the period (427) (429) (856) Actuarial losses (gains) 501 (1,732) (1,834) 2,594 3,038 2,531 8. ACQUISITIONS On 24 January 2008 Litho Supplies (UK) Limited acquired 100% of the share capital of Payrite Services Limited, its main trading subsidiary Graphic Arts Equipment Limited, and the remaining 49% of the share capital of Shinohara (UK) Limited. The Group already owned 51% of the share capital of Shinohara (UK) Limited, all private companies based in the UK. Graphic Arts Equipment's principal activity is the sale, installation and servicing of leading lines of printing and finishing equipment with exclusive distribution agreements for Horizon and Perfecta in the UK and Ireland. Shinohara (UK) Limited markets, sells and services the Shinohara Printing Press. Details of the aggregate net assets acquired and goodwill for the acquisitions above are as follows: £'000 Purchase consideration: Cash paid 1,400 Direct cost relating to the acquisition 43 Fair value of shares issued 200 Deferred performance - related consideration 600 2,243 Fair value of assets acquired (see below) 651 Goodwill 1,592 2,243 It has not been possible to accurately allocate a fair value to the experienced management, sales and technical team acquired and the customer relationships, therefore the excess of the purchase consideration over the asset and liabilities acquired has been treated as goodwill. The assets and liabilities arising from the acquisitions provisionally determined are as follows: Fair value Net book value £'000 £'000 Cash and cash equivalents 259 259 Property, plant and equipment 230 230 Inventories 1,835 1,835 Trade and other receivables 413 413 Trade and other payables (2,034) (2,034) Borrowings (52) (52) Net assets acquired 651 651 The fair value of the shares issued was based on the average mid-market price of the company's shares over the seven business days immediately preceding the completion date. A total of 423,602 ordinary shares were issued as part of the consideration for Payrite Services Limited and its main trading subsidiary, Graphic Arts Equipment Limited. The acquired business of GAE contributed revenues of £4.10m and net profit of £418,000 (excluding any reorganisation and integration costs) to the Group for the post acquisition period 24 January 2008 to 30 June 2008. Shinohara (UK) Limited contributed revenues of £299,000 and a net loss of £1,000 to the Group for the period 24 January 2008 to 30 June 2008. Marketing and advertising expenditure was incurred in this period to promote the Shinohara range of presses and the trading result above is after charging this expenditure. 9. CASH AND CASH EQUIVALENTS For the purposes of the cash flow statement, cash and cash equivalents comprise the following: 6 months 6 months Year Ended Ended Ended 30 June 30 June 31 Dec 2008 2007 2007 £'000 £'000 £'000 Cash at bank and in hand 786 4,873 3,543 Bank overdraft (637) - - Net cash at bank and in hand 149 4,873 3,543 10. ISSUED CAPITAL 30 June 2008 No.'000 Authorised Ordinary shares of 10p each 32,000 Share capital Share premium No.'000 £'000 £'000 Ordinary shares issued and fully paid At 1 January 2008 21,768 2,177 13,587 Issued during period 423 42 157 At 30 June 2008 22,191 2,219 13,744 The shares issued during the period were part of the consideration for the acquisition of Payrite Services Limited and its 100% subsidiary Graphic Arts Equipment Limited, the shares were admitted to listing on 31 January 2008. 11. RELATED PARTY TRANSACTIONS Company During the period the company received £200,000 from Litho Supplies (UK) Limited for shares issued as part of the consideration for the acquisition disclosed in note 8 above. On 25 April 2008 a dividend was received by Litho Supplies Plc from its subsidiary Litho Supplies (UK) Limited via Litho Supplies Investments Limited. 12. This half yearly statement was approved by the board on 29 August 2008 and copies of this statement together with the accounts for the year ended 31 December 2007 and the interim report for the period ended 30 June 2007, can be obtained from the Company Secretary at the Registered Office:- Unit 2, Chapel Way, Avon Valley Business Park, St Annes Park, Bristol, BS4 4EU. The 2008 half yearly statement is also available with other financial information on the company's website www.litho.co.uk, under the corporate section. This information is provided by RNS The company news service from the London Stock Exchange END IR SEDFIASASEIA
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