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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Omega Intl | LSE:OME | London | Ordinary Share | GB00B00J0S40 | 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% | 106.50 | 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:3766P Omega International Group PLC 05 March 2008 Immediate Release 5 March 2008 OMEGA INTERNATIONAL GROUP PLC PRELIMINARY RESULTS Omega International Group PLC, a leading UK manufacturer of branded kitchen furniture, today announces its preliminary results for the year ended 31 December 2007. FINANCIAL HIGHLIGHTS 2007 2006 --- ------ ------ * Revenue + 19% £33.7m £28.3m * Operating profit + 28% £8.0m £6.3m * Pre tax profit + 27% £8.1m £6.4m * Basic earnings per share + 26% 20.3p 16.1p * Total ordinary dividends per share + 28% 3.2p 2.5p * Net assets per share + 43% 92.3p 64.5p *Final dividend of 2.3p per share proposed payable on 4 July 2008 to shareholders recorded on the register on 6 June 2008, making a total of 3.2p for the year (2006: 2.5p). Commenting on the results Chairman, Bob Murray, said: "Omega has had another excellent year in all respects and I am delighted to be reporting these strong results today. During 2007 we have focused on ensuring we have the right infrastructure in place to double the size of the business by 2010. The third phase extension to our freehold factory is now completed and this investment, along with our continued strong financial performance, is a solid foundation for achieving this target" For further information, please contact: Omega International Group plc: Tel: 01405 743 333 Francis Galvin: Group Chief Executive Buchanan Communications: Tel: 020 7466 5000 Mark Edwards Nicola Cronk e-mail: nicolac@buchanan.uk.com Susanna Gale Notes to editors: The Group's core business is the design, manufacture and marketing of branded kitchen furniture through three main brands: Sheraton, Omega and Chippendale. These three brands are sold throughout the UK, mainly to independent retailers. The Group's manufacturing, distribution and sales facilities are located in its purpose built factory complex in Thorne, Doncaster, adjacent to the M18 motorway. CHAIRMAN'S STATEMENT Meeting objectives I am delighted to report an excellent fourth full year's results as an AIM listed company. Having realised our initial target at float of doubling pre tax profit by 2006 ahead of schedule, we set our next objective to double the size of the business by 2010. Full year 2007 actual results have laid a solid foundation for achieving that objective. Exceeding expectations Sales for the year to 31 December 2007 grew by 19% to £33.7 million (2006: £28.3 million) during a period which some in the industry continued to regard as testing. We implemented a price increase in the first half of 2007 and this, combined with firm management of costs and economies of scale enabled us to increase operating margin to 23.9% (2006: 22.2%). This was achieved against a background of rising interest rates, energy and material prices, and the much vaunted 'credit crunch'. Operating profit rose by an impressive 28% to £8.0 million from £6.3 million and earnings per share advanced 26% to 20.3p (2006: 16.1p). Net cash inflow from activities increased by £2.8 million. After capital expenditure of £3.3 million, corporation tax payments of £2.3 million, and dividends of £0.7 million, along with proceeds from the issue of share capital of £0.5 million, we ended the year with a strong cash balance of £3.8 million. An independent revaluation of our freehold property was undertaken at the year end valuing it at £20 million. This assisted in increasing assets per share by 43% to 92.3p (2006: 64.5p). The group remains debt free. Growing dividends Given our strong results and the Board's confidence in the future of the business, we propose to increase the level of ordinary dividend by 28% compared with 2006. This results in a proposed final ordinary dividend of 2.3p a share (2006: 1.8p) after payment of the interim ordinary dividend of 0.9p a share (2006: 0.7p). Board of Directors Peter Walker was appointed a Non Executive Director in June 2007. He brings with him a wealth of experience and provides support and guidance for the finance function of the Group. As announced on 4 January 2007 Martin Levitt, Finance Director, took early retirement and left the Company on 30 June 2007 in order to pursue personal interests abroad. Growing the business Our declared intention is to double the size of the business by 2010. To facilitate this, construction of the 108,000 sq ft third phase extension to our freehold production complex was completed on time, within budget and with all disruption costs absorbed within these results. The factory complex now covers 315,000 sq ft on 16.2 acres of freehold land. Further investment in plant and machinery took place with the addition of state of the art cutting, handling and drilling equipment providing us with the benefit of the latest European technology as we increase our capacity for the future. Plant investment will continue throughout 2008 and will be funded from our own cash resources. I am also pleased to announce the acquisition of freehold land adjacent to our factory, which will take our total site area to 21 acres. This provides us with the option to construct an additional 95,000 sq ft of factory space taking the freehold production complex up to 410,000 sq ft as our growth plans require it. Current trading is in line with expectations and the Directors are confident that the product launches in the coming weeks and months, together with improved distribution, will help us to achieve our growth targets and to deliver our stated intentions. On behalf of the Group, I would again like to thank all of our customers and suppliers for their support, as well as our own talented team for their professionalism, commitment and energy throughout the year. BOB MURRAY CBE FCCA CHAIRMAN 4 March 2008 BUSINESS REVIEW Introduction Omega designs, manufactures and markets quality kitchen furniture in the mid to upper market segments. Its three kitchen brands, Sheraton, Omega and Chippendale are distributed and sold through a national network of specialist kitchen outlets, the majority of which are independent retailers. We believe that the unbroken record of growth in turnover and pre tax profits over the last decade has been founded on this proven and robust route to market. The brands Sheraton is our factory assembled, rigid kitchen brand, which is made to order and aimed at the mid upper market. It was launched in 1996 and today it is one of the most comprehensive kitchen ranges available. Dealers sell this range as a bespoke option and we deliver on their behalf to the consumer's home on a two to four week delivery schedule. Our two ready to assemble kitchen brands, Omega and Chippendale, were launched in 2001 and 2002 respectively and are aimed at the lower mid market upwards. Given that complete kitchens are available from our stock within 24 hours and can be delivered to the consumer or dealer showrooms within seven days, an exceptionally efficient service is offered. Factory expansion During the first half of 2007 we completed the third phase of our factory extension, consisting of an additional 108,000 sq ft taking the facility up to 315,000 sq ft, an increase in floor space of over 50%. This major project was completed on time, within the approved capital expenditure budget and with minimal disruption to our operations. All associated disruption overheads were absorbed within these 2007 results. Our 16.2 acre freehold site is now developed providing a significant increase in manufacturing capacity to support our medium term growth plans. Additional leading edge plant and machinery purchases in 2007 facilitated an increase in capacity. In particular, a new angle plant has doubled our cutting capacity, and automated materials handling equipment has been introduced with the two-fold benefit of improving efficiency and increasing safety for employees. The installation of a second automated rigid assembly line in 2008 will allow us to double output. Alongside this, we are installing bespoke drilling and packaging machinery. All this new technology is due to be commissioned during the first half of 2008. A reorganisation of the warehouse and distribution facilities has been successfully completed which will lead to increasing efficiency in this key area of customer service. Future expansion We have exchanged contracts on the purchase of further freehold land adjacent to our existing facilities, which will increase our total site area to 21 acres and provide further expansion opportunities in due course. Indicative plans show that the factory complex could potentially be increased by an additional 95,000 sq ft taking the freehold operation to 410,000 sq ft. Investment in the dealer network The Group continued with its investment in expanding and strengthening its display base for all three existing brands by taking on new display dealers as well as adding new kitchen range displays within existing outlets. We also continued to increase our focus on new sales opportunities, particularly in the South of England where historically our distribution has not been as concentrated. This ongoing initiative is gaining sales momentum and is making an ever-increasing contribution to the business. Our continued success relies on our ability to cater to the needs of our dealer base. These include a substantial profit margin, leading designs and extensive choice, excellent value for money, a comprehensive home delivery service which is on time first time, specialised training and support and a full after sales service. We shall continue to focus on our ability to provide all of these in order to maximise dealer loyalty and to grow repeat business. New product development continues to be a key area of growth for the Group. Six new kitchens were launched into the Sheraton brand and eight new kitchens into the Omega and Chippendale brands in March 2007. Cutting-edge design helps to improve yields per outlet as well as refreshing the mix of kitchens on display nationally. Omega continues to work closely with its displaying outlets, utilising its enlarged national sales force to motivate an ever increasing number of dealers and their staff, as well as constructing tailored marketing packages including showroom layouts, staff training, CAD planning and quotations, product promotions and support materials. As part of our mission to offer the best service possible, a dealer forum took place in September 2007 during which trade customers were encouraged to air their views on everything from service to product packaging. This was the first such forum Omega has run and it was a success for all parties. It was agreed that the dealer's comments would be carefully considered as part of our future development programme and that further dealer forums would be arranged. Key performance indicators The Group's key performance indicators include sales growth year on year, gross and operating margin rates and service delivery. Sales growth and margins are discussed further below. The delivery service performance indicator of the number of kitchens delivered complete on time, first time averaged 97% (2006: 97%) for the year. Principal risks and uncertainties The principal risks and uncertainties faced by the Group are those that are typical for a design led manufacturing company operating solely in the UK from a single site. These are fire and flood risk for the factory, retention of the customer base, a stable technological infrastructure, continued access to raw materials and the availability of an appropriately skilled workforce. Management considers that it has in place appropriate measures to mitigate these risks. Employee, environmental and social issues Since opening our factory at Thorne, Doncaster in 1996, the Group has created over 250 new jobs for the local economy. The average number employed rose to 253 in 2007 from 217 in 2006. By 31 December 2007, employment had risen to 260 positions. Most of our staff live locally and we see the creation of good quality employment with appropriate rewards, job growth opportunities, training and advancement potential, as an important social contribution to the area around our factory. As part of our ongoing commitment to developing the skills of our workforce, many of our employees have undergone NVQ level 2 training in Business Improvement Techniques. Our modern premises and machinery allow us to limit our environmental impact with electricity and gas costs together amounting to less than 1% of sales in 2007. We continually monitor and upgrade our dust extraction equipment enabling us to provide a safe, clean working environment for our employees. Purchasing practices and procedures include a focus on recyclable packaging and an appropriate timber sourcing policy. Our policies are set out in more detail on our website www.omegaplc.co.uk Trends and future performance The Group continues with its successful formula into 2008, targeting additional new display outlets and further strengthening the existing display network. In addition, 13 new kitchens are being launched into the Sheraton brand in April 2008 bringing the total offer to 70. The Omega and Chippendale brands will each see a further five kitchens being added in June, bringing their total combined offer to 46 kitchens. We believe that the quality of our business model combined with our management expertise and modest existing market share will allow us to continue with our growth plans even if overall market growth is constrained. Omega PLC Board of Directors The Board of Directors of Omega PLC (the Group's trading subsidiary), which was formed two years ago, is now well established, is working effectively and assisting the Group in meeting its performance targets. Trading Revenue grew by 19% to £33.7 million in 2007 (2006: £28.3 million). Increased sales together with improved cost controls allowed gross margin to reach 51% up from 50% in 2006. Similarly operating margins improved to 24% (2006: 22%) whilst net interest income in 2007 allowed pre tax profit to rise to £8.1 million (2006: £6.4 million) representing a margin of over 24% (2006: 23%). Over the last five years, the average annual compound growth rates in revenue, operating profit and pre tax profits were 17%, 30% and 32% respectively. Despite the impact of rising interest rates, energy and material prices, the Group has been able to negate much of this recent pricing pressure by improving terms through both re-sourcing and by generating incremental business. We have announced price increases of 5% on our brands. Sheraton increases will take effect from 1 April 2008, whilst Omega and Chippendale prices will increase from 1 June 2008. Our competitors' prices were raised much earlier and in many instances by a higher percentage, positioning our brands attractively within the market. Cash flow Conversion of profits into operating cash flows was again impressive with the net cash inflows from operating activities, before tax payments, exceeding the level of operating profits, at £8.5 million (2006: £6.2 million). Capital expenditure increased to £3.3 million (2006: £2.5 million), representing the culmination of the extension to our factory facilities and the introduction of new production equipment. Corporation tax payments at £2.3 million (2006: £2.4 million) reflected two quarterly payments as well as the final payment for 2006. Dividend payments were £0.7 million (2006: £2.7 million), leaving a year end cash balance of £3.8 million (2006: £1.1 million). Balance sheet Our balance sheet remains exceptionally strong and we remained debt free at the end of 2007. Net assets per share are now 92.3p, compared with 64.5p a year ago, assisted by the revaluation of our freehold property at £20 million. Treasury The Group maintains cash in bank accounts bearing variable rates of interest. Money market deposits are made if these generate better returns. An unsecured overdraft facility of £1.5 million is available to the Group. Approximately 45% of the Group's purchases of material are made in Euros. It is the Group's policy to purchase Euros using forward options when rates are favourable, though this hedging policy usually covers less than the next year's purchases. The responsibility of hedging is delegated to the Operations Director working in conjunction with the Finance Director of Omega PLC. Summary The Group enters the new financial year with continued confidence and optimism, despite the current economic uncertainty, having laid the foundations for enhanced growth in volumes, quality and margins. The future is positive and exciting. We are grateful for the support and commitment of all stakeholders and we look forward to delivering further success in the year ahead. F Galvin N Winfield Chief Executive Operations Director ----------------- --------------------- 4 March 2008 CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2007 Notes Audited Audited -------- -------- 2007 2006 -------- -------- £'000 £'000 -------- -------- Revenue 2 33,650 28,273 Cost of sales (16,629) (14,023) -------- -------- Gross profit 17,021 14,250 Other operating expenses (8,975) (7,976) -------- -------- Operating profit 8,046 6,274 Finance income - bank 49 140 Finance costs - bank (6) - -------- -------- 46 140 -------- -------- Profit before income tax 8,089 6,414 Income tax expense 3 (2,401) (1,937) -------- -------- Profit for the financial year 5,688 4,477 ======== ======== Earnings per share (pence) 5 Basic 20.3 16.1 Diluted 20.2 16.0 -------- -------- All results presented above arise from continuing operations and are wholly attributable to the equity shareholders of the company. There is no material difference between reported and historical cost profits and losses. CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENENSE FOR THE YEAR ENDED 31 DECEMBER 2007 Audited Audited 2007 2006 £'000 £'000 Profit for the financial year 5,688 4,477 Deferred tax on share-based payments (240) 203 Deferred tax on revaluation of freehold land and buildings (877) (96) Remeasurement of deferred tax charge for change in UK tax rate 250 - -------- -------- Unrealised surplus on revaluation 3,221 - of freehold land and buildings -------- -------- Total recognised income for the year 8,042 4,584 ======== ======== BALANCE SHEET AT 31 DECEMBER 2007 Note Audited Audited --------- --------- 2007 2006 ------ ------ £'000 £'000 Non-current assets Intangible assets 135 124 Property, plant and equipment 22,969 17,743 ------- ------- 23,104 17,867 ------- ------- Current assets Inventories 4,546 3,642 Trade and other receivables 5,192 5,126 Cash and cash equivalents 3,804 1,051 ------- ------- 13,542 9,819 ------- ------- Total assets 36,646 27,686 ------- ------- Liabilities Non-current liabilities Other non-current liabilities 25 51 Deferred income tax liabilities 3,604 2,647 ------- ------- 3,629 2,698 ------- ------- Current liabilities Trade and other payables 6,216 6,089 Current income tax liabilities 722 997 ------- ------- 6,938 7,086 ------- ------- Total liabilities 10,567 9,784 ------- ------- Net assets 26,079 17,902 ======= ======= Equity Ordinary shares 2,824 2,776 Share premium account 2,058 1,563 Other reserves 10,963 8,390 Retained earnings 10,234 5,173 ------- ------- Total equity 6 26,079 17,902 ======= ======= CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2007 Notes Audited Audited --------- --------- 2007 2006 ------ ------ £'000 £'000 Cash flows from operating activities Cash generated from operations 7 8,476 6,202 Interest received 42 142 Interest paid (6) - Income tax paid (2,299) (2,375) -------- -------- Net cash inflow from operating activities 6,213 3,969 -------- -------- Cash flows from investing activities Purchase of property, plant and equipment (3,328) (2,540) Proceeds from sale of property, plant and equipment 19 3 -------- -------- Net cash used in investing activities (3,309) (2,537) -------- -------- Cash flows from financing activities Proceeds from issue of ordinary shares 543 - Equity dividends paid to shareholders (694) (2,721) -------- -------- Net cash used in financing activities (151) (2,721) -------- -------- Net increase/(decrease) in cash in the year 2,753 (1,289) Cash and cash equivalents at 1 January 1,051 2,340 -------- -------- Cash and cash equivalents at end of the year 3,804 1,051 ======== ======== NOTES TO THE PRELIMINARY ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2007 1. BASIS OF PREPARATION The preliminary announcement for the year ended 31December 2007 has been prepared, for the first time, on the basis of International Financial Reporting Standards ("IFRS") adopted for use in the European Union. In preparing the Group's 2007 annual financial statement, management has amended certain accounting, valuation and consolidation methods applied in the 2006 UK GAAP financial statements to comply with IFRS. The comparative figures in respect of 2006 were restated to reflect these adjustments. The financial information included in this announcement has been extracted from the audited financial statements for the years ended 31 December 2007 and 2006. The content of this announcement has been agreed with the Company's auditors. This preliminary announcement does not constitute the Group's statutory accounts within the meaning of Section 240 of the Companies Act 1985. The Group's 2007 Annual Report and Financial Statements, on which the Company's auditors, PricewaterhouseCoopers LLP, have given an unqualified opinion in accordance with Section 235 of the Companies Act 1985, are to be delivered to the Registrar of Companies. The Group's 2006 accounts, which contain an unqualified audit report, have been filed with the Registrar of Companies. Copies of the Group's 2007 Annual Report and Financial Statements will be posted to all shareholders during March 2008. 2. REVENUE Revenue, operating profits and net assets are derived from within the United Kingdom and are from the Group's principal activity of the manufacture and marketing of branded consumer products. 3. INCOME TAX EXPENSE a) Analysis of charge in year Audited Audited --------- --------- 2007 2006 ------ ------ £'000 £'000 Current tax UK corporation tax on profit for the year 2,340 1,984 Adjustment for prior years (29) (4) -------- -------- 2,311 1,980 -------- -------- Deferred tax Deferred tax at 30% 95 (51) Impact of change in UK tax rate (7) - Adjustment for prior years 2 8 -------- -------- 90 (43) -------- -------- Income tax expense 2,401 1,937 ======== ======== NOTES TO THE PRELIMINARY ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2007 3. TAX ON PROFIT ON ORDINARY ACTIVITIES (continued) b) Factors affecting tax charge for the year The Income tax expense assessed for the year differs from the standard rate of 30% as set out below: Audited Audited --------- --------- 2007 2006 ------ ------ £'000 £'000 Profit on ordinary activities before taxation 8,089 6,414 ------- -------- Profit on ordinary activities multiplied by the 2,427 1,924 standard rate of corporation tax in the UK of 30% (2006 - 30%) Expenses not deductible for tax purposes 23 24 Impact of small companies and marginal rate of tax (15) (15) Adjustments for prior years (27) 4 Remeasurement of deferred tax for change in UK tax rate (7) - ------- -------- 2,401 1,937 ======= ======== During the year as a result of the change in UK corporation tax rates, which will be effective from 1 April 2008, deferred tax balances have been remeasured. Deferred tax relating to temporary timing differences have been measured at 30% or 28% depending on the date at which the difference is expected to reverse. c) Factors that may affect future current tax charges Future tax charges are expected to approximate to profit multiplied by the standard rate of corporation tax. 4. DIVIDENDS Audited Audited --------- --------- 2007 2006 ------ ------ £'000 £'000 Equity - Final dividend of 1.3p per share for 2005 - 361 - Special dividend of 8.0p per share in 2006 - 2,221 - Interim dividend of 0.7p per share for 2006 - 194 - Final dividend of 1.8p per share for 2006 500 - - Interim dividend of 0.9p per share for 2007 254 - ------- -------- Total Dividends 754 2,776 ======= ======== The Directors have proposed a final dividend of 2.3p per share payable on 4 July 2008, making a total of 3.2p per share for 2007 (2006: 2.5p per share). NOTES TO THE PRELIMINARY ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2007 5. EARNINGS PER SHARE (continued) Audited Audited --------- --------- 2007 2006 ------ ------ Earnings per share Basic 20.3p 16.1p Diluted 20.2p 16.0p Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of shares in issue during each period. Diluted earnings per share reflect the adjustment of the weighted average number of ordinary shares in issue to assume conversion of all dilutive potential ordinary shares, being certain outstanding share options. Weighted average number of shares: Audited Audited --------- --------- 2007 2006 ------ ------ For basic earnings per share 28,001,307 27,761,150 Share options dilution 95,913 291,157 --------- -------- For diluted earnings per share 28,097,220 28,052,307 ========= ======== 6.EQUITY Audited Audited --------- --------- 2007 2006 ------ ------ £'000 £'000 Profit for the financial year 5,688 4,477 Ordinary and special dividends (754) (2,776) Share option expense 59 68 Tax on exercise of share options 287 - Issue of share capital 543 - Revaluation of freehold land and buildings 3,221 - Deferred tax movement (1,117) 107 Remeasurement of deferred tax for change in UK tax rate 250 - ------- ------- Net addition to equity shareholders' funds 8,177 1,876 At 1 January 17,902 16,026 ------- ------- At 31 December 26,079 17,902 ======= ======= NOTES TO THE PRELIMINARY ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2007 7. CASH GENERATED FROM OPERATIONS Audited Audited --------- --------- 2007 2006 ------ ------ £'000 £'000 Operating profit 8,046 6,274 Adjusted for: Depreciation and amortisation 566 578 Loss/(profit) on disposal of property, plant and equipment 17 (2) Share option expense 59 68 Grant released from deferred income (27) (26) Changes in working capital: Increase in inventories (904) (622) Increase in trade and other receivables (187) (778) Increase in trade and other payables 906 710 ------- -------- Cash generated from operations 8,476 6,202 ======= ======== This information is provided by RNS The company news service from the London Stock Exchange END FR UUUUUWUPRGRC
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