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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Straight | LSE:STT | London | Ordinary Share | GB0033695486 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 77.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:5329A Straight PLC 28 March 2006 The following replaces the Final Results announcement released today at 0700 under RNS number 4662A. Please be advised that the Directors have declared a final dividend of 2.5p (2004: 1.6p), making a total for the year of 3.5p per share (2004: 2.4p). This dividend will be paid on 26 May 2006 to shareholders on the register at 28 April 2006, not 26 April 2006 as previously stated. All other details remain unchanged and the full amended text appears below. Straight plc Preliminary Announcement for the year ended 31 December 2005 Highlights * Turnover up 90% from #12.8m to #24.3m * Gross margins up 9.8% from 15.3% to 16.8% * Operating margins up 50% from 5.0% to 7.5% * Headline EBITDA up 179% to #2.1m * Profit before tax up 112% from #0.7m to #1.5m * Headline earnings per share up 68% from 7.5p to 12.6p * Earnings per share up 16% from 7.5p to 8.7p * Blackwall acquisition fully and successfully integrated * Significant Materials Handling orders Commenting on the results, James Newman, Chairman, said "2005 has been another successful year for the Group. Much has been achieved and the Board believes 2006 will be another year of continued growth as our new markets and new products begin to contribute to the business." Jonathan Straight, Chief Executive, added "With the recent publication of the Draft Waste Strategy from DEFRA, we anticipate rising recycling targets, which will require container solutions. We expect home composting to continue to be high on the environmental agenda and water shortages in some parts of the country will keep up the demand for water butts. The recent acquisition of the "Cloudburst" brand from Titan Environmental will give us access to new retail and export markets and there are a number of exciting materials handling projects in the pipeline. The outlook for Straight plc remains very positive indeed." Contacts Company: James Newman/Jonathan Straight - 0113 245 2244 Simon Mountford Communications: Simon Mountford - 01347 844844 Panmure Gordon: Andrew Godber - 0207 459 3600 The preliminary announcement was approved by the Board on 28 March 2006 Chairman's Statement I am delighted to report that significant further progress has been achieved during 2005, following the acquisition of Blackwall at the beginning of the year. Results Turnover at #24.3m was almost double that of 2004, both as a result of the Blackwall acquisition and continued organic growth in the original business. Both retail and trade sales were buoyant and, in their first full year of operations, our growing fulfillment and contact centre services performed well. We also successfully delivered our first major order in our Materials Handling Division. Overall, gross profit margins increased from 15.3% to 16.8% as a result of more efficient production and buying and better controls over distribution costs. Synergies were achieved from integrating the two businesses, although these were partly offset by reorganisation costs. Operating profit for the year, before goodwill and reorganisation costs, was up by 186% to #1.8m (2004: #0.6m). Profit before tax was up by 112% at #1.5m. Dividend During the year, the Board declared an interim dividend of 1.0p (2004: 0.8p) per share. The Directors have declared a final dividend of 2.5p (2004: 1.6p), making a total for the year of 3.5p per share (2004: 2.4p). This dividend will be paid on 26 May 2006 to shareholders on the register at 28 April 2006. Strategic developments The acquisition of Blackwall was completed in January and the integration of the two businesses was successfully completed during the first half of the year. Straight's high profile in trade and B2B markets and Blackwall's strong retail brand has delivered growth and consolidated the Group's position as the UK's leading supplier of specialist waste and recycling containers. In January 2006, the Group announced the purchase of the 'Cloudburst' garden products division of Titan for #150,000, thus adding to the Group's portfolio of good quality products and brand names. Whilst sales in the Materials Handling Division were modest in 2005, our strategic alliance with our US partner, Rehrig Pacific, has started to create some excellent sales and product opportunities. It is expected that this division will grow significantly in 2006. Board I am pleased to announce the appointment of Simon Shepherd as Director of Sales and Marketing from 6 March 2006. Simon comes to us from Mono Pumps Limited, where he was European Sales and Marketing Manager. He will be an excellent addition to the executive management team. It is anticipated that Simon will join the Board from 1 July 2006. Tom Musgrove, Operations Director, who has been with the Company since 1996, will step down from the Board as from 30 June 2006. On behalf of the Board, I would like to thank Tom for his contribution to the business over the last 10 years. I am delighted that Tom will be staying with the Group as Director of National Accounts. Outlook The Government and its agencies are still looking at ways to achieve the various waste and recycling targets they and Europe have set themselves. These targets will be hard to achieve unless funding to our major customers continues to be made available. The Group is well placed to support this effort. 2005 has been another successful year for the Group. Much has been achieved and the Board believes 2006 will be another year of continued growth as our new markets and new products begin to contribute to the business. James H Newman Chairman 28 March 2006 Chief Executive's Review 2005 began with the acquisition of Blackwall Limited, a key rival for many years. A rapid and smooth integration of this business was essential in order to sustain our position as the UK's leading supplier of kerbside recycling containers, home compost containers and water butts. I am delighted that all of this was achieved. The Blackwall business proved to be an excellent fit with Straight's core activities. As old adversaries became good friends, a successful new management structure was created with the full co-operation and assistance of the outgoing directors. The new management team has, therefore, been able to take from the best of both businesses ensuring that we made significant progress in each of our key sectors during the year. Markets In our core market of waste and recycling containers we continued to grow our sales and customer base. Although major new contracts were won through the year, we also noticed a trend for repeat business from both existing Straight and our new Blackwall customers. This demonstrated our ability to provide excellent service in both quality and price. The profitability of our wheeled bin business, traditionally one of low margins, improved due to better buying and selling, as well as an increase in the supply of customised product. General recycling containers for the B2B market, which was a particular focus for our internal sales team, increased in sales volume and profitability. Sales of garden products continued to grow with deliveries of compost bins to WRAP at a record level. By working with almost all the water companies in the UK, we ensured a strong year on retail sales of water butts. An attractive new catalogue allowed us to maximise the selling opportunities to every retail customer. The former Blackwall contact centre, expanded and transformed by new investment in up to date technology, handled a record number of calls both for ourselves and also for third party clients such as Exel Logistics. Our Materials Handling Division began to make headway in this lucrative market area. A range of attached lid containers, introduced in the early part of the year, gained support from a number of leading retailers and orders were obtained and delivered successfully during the year. We also developed an innovative new nest/stack container for the warehouse systems market. This container is specially designed to work with automated handling systems, and has been chosen by automated materials handling solution specialist FKI Logistex, who have placed an initial order for #359,000 of the new crates. We are currently working on a number of very large projects and expect to announce several contract wins over the next few months. Blackwall Integration Key to our strategy was to maintain good relationships with both the suppliers and customers of Blackwall. Having assured our new expanded supplier base that it was "business as usual", it was important to give comfort to our newly enlarged trade customer base. In every case we took a long term view and customers did not experience significant changes in prices or terms of trade, and hence their confidence grew in dealing with the new combined organisation. Having expected an approximate customer fall-out rate of 10%, I am pleased to advise that not one single significant customer stopped dealing with the business. New Product Development Product development, a key part of our strategy, continued, including the integration of the Blackwall product range. Our new 5 litre Kitchen Caddy started production in February 2005 and has run almost continuously since then. A new kerbside box divider delivered much improved margins. A great deal of development work has been done in respect of future product launches. Prototypes of the innovative Recycle Station and the Wheeled Bin Caddy secured sufficient interest to merit ordering tooling. Both of these products will come to market in 2006. Contract awards 2005 saw significant awards from WRAP for home compost bins, from Manchester City Council for wheeled bins, from Somerset County Council for kitchen caddies and kerbside baskets and from Cleanaway for recycling boxes. Management and staff All of the achievements of the past year would not have been possible without the tremendous efforts of the new management team and all other staff. In order to reward hard work and success, we have implemented new pay scales, a bonus scheme for the management team and a contributory pension scheme. Further share options were issued in 2005, ensuring that most permanent staff now have a potential equity interest in the business. Outlook With the recent publication of the Draft Waste Strategy from DEFRA, we anticipate rising recycling targets, which will require container solutions. We expect home composting to continue to be high on the environmental agenda and water shortages in some parts of the country will keep up the demand for water butts. The recent acquisition of the "Cloudburst" brand from Titan Environmental will give us access to new retail and export markets and there are a number of exciting materials handling projects in the pipeline. The outlook for Straight plc remains very positive indeed. Jonathan M Straight Chief Executive 28 March 2006 Finance Director's Review I am pleased that following the successful integration of the Blackwall business, the Group's financial position continues to grow in strength. Turnover Turnover at #24.3m was 90.1% higher than in 2004. Whilst the acquisition of Blackwall contributed greatly to this, the underlying organic growth in sales of the combined business was just over 10%. This increase in activity extended across both the waste and recycling containers and home and garden products businesses. Operating margins By being able to combine the best performing suppliers from both Blackwall and Straight, gross margin has increased from 15.3% in 2004 to 16.8% in 2005. In addition we have been able to migrate a large proportion of our supply base to the UK, thus saving on the cost of inward carriage. These improvements were achieved as a result of the investment which the business has made in both its middle management team and in its IT infrastructure. However, despite this investment, the net operating margin of the Group has also improved, rising from 5.0% in 2004 to 7.5% in 2005, assisted by early synergy gains arising from the successful and timely integration of Blackwall. Operating cashflow Cash balances as the end of 2005 amounted to #2.0m, #0.9m down on 2004, but after the outlay during the year of #1.0m in cash to pay for the balance of the acquisition price of Blackwall not covered by the share placing. Working capital levels increased by #1.2m during the year, driven in part by increased turnover levels, but more importantly, as a result of a deliberate policy of using excess cash to take advantage of early settlement discounts from certain key suppliers. Capital expenditure The Group's capital expenditure amounted to almost #0.5m, up from #0.3m in 2004, and included investment in both new products tooling and in IT. Continued investment in tooling has enabled the business to continue its strategy of maintaining control of its products and margins by tool ownership and innovative design. The installation of a new group-wide IT platform during the year has enabled the business to significantly improve customer service and operational efficiency. Earnings per share Headline earnings per share, based upon profit for before goodwill amortisation and reorganisation costs, increased by 68% from 7.5p to 12.6p. Basic earnings per share were 8.7p (2004: 7.5p). Fully diluted earnings per share were 8.4p (2004: 7.3p). Management of financial risk The Group has continued to generate significant amounts of surplus cash which it has placed on deposit so that the maximum return can be obtained consistent with the Group's need to access the cash. The Group has maintained its policy of managing foreign exchange risk by purchasing currency forward when it is notified that a contract bid has been successful. We have again successfully avoided bad debt by continuing our policy of rigorously credit checking all new customers and keeping existing customers under review. Outlook The Group remains both profitable and cash generative and expects to make further progress on earnings and margins in 2006. James D Mellor Finance Director and Company Secretary 28 March 2006 Summarised Consolidated Profit and Loss Account For the year ended 31 December 2005 Headline Goodwill Total Total performance Amortisation and reorganisation costs 2005 2005 2005 2004 Note #,000 #,000 #,000 #,000 Turnover 2 24,343 - 24,343 12,807 Cost of sales 3 (20,243) - (20,243) (10,850) ____ ____ ____ ____ Gross profit 4,100 - 4,100 1,957 Operating expenses 3 (2,275) (442) (2,717) (1,319) ____ ____ ____ ____ Operating profit 1,825 (442) 1,383 683 Interest receivable 4 125 73 ____ ____ Profit on ordinary activities before taxation 2 1,508 711 Taxation 5 (547) (192) ____ ____ Profit for the financial year 961 519 ____ ____ Headline earnings per share (p) 6 12.6 7.5 Diluted headline earnings per share (p) 6 12.3 7.3 Basic earnings per share (p) 6 8.7 7.5 Diluted earnings per share (p) 6 8.4 7.3 All operations are continuing. There were no recognised gains or losses other than the profit for the financial year. Summarised Balance Sheets At 31 December 2005 Group and Group Company Company Restated 2005 2005 2004 #'000 #'000 #'000 Fixed assets Intangible 5,490 - - Tangible 882 882 460 Investments - 6,902 - ____ ____ ____ 6,372 7,784 460 Current assets Stocks 415 415 312 Debtors 5,489 5,489 2,055 Cash at bank and in hand 2,036 2,036 2,915 ____ ____ ____ 7,940 7,940 5,282 Creditors: amounts falling due within one year (5,364) (7,290) (3,010) ____ ____ ____ Net current assets 2,576 650 2,272 Total assets less current liabilities 8,948 8,434 2,732 Provisions for liabilities and charges (37) (37) (17) ____ ____ ____ Net assets 8,911 8,397 2,715 ____ ____ ____ Capital and reserves Called up share capital 113 113 69 Share premium account 5,827 5,827 1,158 Merger reserve 744 744 - Profit and loss account 2,227 1,713 1,488 ____ ____ ____ Equity shareholders' funds 8,911 8,397 2,715 ____ ____ ____ Summarised Consolidated Cash Flow Statement For the year ended 31 December 2005 2005 2004 Note #'000 #'000 Net cash (outflow)/inflow from operating activities 7 (160) 1,550 _____ _____ Returns on investments and servicing of finance Interest received 125 58 _____ _____ Net cash inflow from returns on investments and 125 58 servicing of finance Taxation (514) (99) Capital expenditure Purchase of tangible fixed assets (457) (280) Disposal of tangible fixed assets 4 1 _____ _____ Net cash outflow from capital expenditure (453) (279) Net cash outflow from acquisitions (4,362) - Equity dividends (222) (56) Management of liquid resources Purchase of short term deposits - (1,500) _____ _____ Net cash outflow before financing (5,586) (326) Financing Issue of share capital 5,000 - Costs of share issue (293) (17) _____ _____ Net cash inflow/(outflow) from financing 4,707 (17) _____ _____ Decrease in cash (879) (343) _____ _____ Notes to the Preliminary Announcement For the year ended 31 December 2005 1. Basis of preparation The preliminary announcement has been prepared under the historic cost convention in accordance with applicable accounting standards. The principal accounting policies of the Group have remained unchanged from the previous year except that FRS21, "Events after the Balance Sheet Date", has been adopted. Prior period figures have been restated as appropriate. 2. Turnover and Group profit The turnover and profit on ordinary activities before taxation are attributable to the principal activities of the Group as set out below. Gross Gross Turnover profit Turnover profit 2005 2005 2004 2004 #'000 #'000 #'000 #'000 Waste and recycling containers 19,913 3,328 11,363 1,765 Home and garden products 4,208 738 1,439 190 Materials Handling 222 34 5 2 _____ _____ _____ _____ 24,343 4,100 12,807 1,957 _____ _____ _____ _____ It is not possible to separate the profit before tax or net assets of these operating segments. Due to the full and early integration of the Blackwall business into the Group, and also the overlap in customers and products, the Board are unable to identify the element of turnover, gross profit and operating expenses which relate to the acquisition. The profit on ordinary activities before taxation is stated after the costs below. 2005 2004 #'000 #'000 Depreciation of owned assets 256 108 Goodwill amortisation 289 - Operating lease rentals 119 62 Auditors' remuneration - audit services 20 13 Auditors' remuneration - other services* 3 2 * In addition to the above, Grant Thornton were paid #10,000 for work done in relation to the acquisition of Blackwall Limited. 3. Cost of sales and operating expenses 2005 2004 #'000 #'000 Cost of sales 20,243 10,850 ______ _____ Operating expenses Distribution costs 1,397 442 Administrative expenses 1,320 877 _____ _____ 2,717 1,319 _____ _____ Adminstrative expenses of #1,320,000 include #289,000 of goodwill amortisation and reorganisation costs of #153,000. There were no goodwill amortisation or reorganisation costs in 2004. 4. Interest receivable 2005 2004 #'000 #'000 On bank deposits 56 55 Short term deposits 69 18 _____ _____ 125 73 _____ _____ 5. Taxation 2005 2004 #'000 #'000 Corporation tax at an average rate of 35% (2004: 27%) 535 189 Over provision in prior years (11) - _____ _____ 524 189 Deferred tax 23 3 _____ _____ 547 192 _____ _____ Analysis of current tax charge Profit on ordinary activities before tax 1,508 711 _____ _____ Profit on ordinary activities multiplied by standard rate of Corporation tax in the UK (30%) (2004: 30%) 452 213 Expenses not deductible for tax purposes 88 7 Capital allowances in excess of depreciation - (9) Marginal relief (5) (22) Over provision in respect of prior years (11) - _____ _____ 524 189 _____ _____ 6. Earnings per share Basic and diluted earnings per share Basic earnings per share are calculated on the basis of profit for the financial year after tax divided by the weighted average number of shares in issue for the year. Diluted earnings per share are calculated on the basis of profit for the year after tax divided by the weighted average number of shares in issue for 2005 plus the weighted average number of shares which would be issued if all the options granted were exercised. All options were dilutive at 31 December 2005. 2005 2004 Weighted Weighted average average Earnings number Per share Earnings number Per share #'000 of shares pence #'000 of shares pence Basic earnings 961 11,096,585 8.7 519 6,903,750 7.5 attributable to ordinary shareholders Dilutive effect of - 303,771 (0.3) - 159,512 (0.2) share _____ _________ ____ ____ ________ ____ Diluted earnings per 961 11,400,356 8.4 519 7,063,262 7.3 share _____ _________ ____ ____ ________ ____ Headline earnings per share Headline earnings per share is calculated on the basis of the headline profit for the year, defined as the profit for the financial year before the amortisation of goodwill and reorganisation costs, divided by the weighted average number of shares in issue in the year of 11,096,585. The headline earnings per share reflects the Group's recurring trading profitability. The comparative is calculated by reference to the weighted average number of shares in issue in 2004 of 6,903,750. 2005 2004 Number Number Earnings of shares Per share Earnings of share Per share #'000 in issue pence #'000 in issue pence Headline earnings 1,403 11,096,585 12.6 519 6,903,750 7.5 attributable to ordinary shareholders Dilutive effect of - 303,771 (0.3) - 159,512 (0.2) share options _____ _________ ____ ____ ________ ____ Diluted headline 1,403 11,400,356 12.3 519 7,063,262 7.3 earnings per share _____ _________ ____ ____ ________ ____ 7. Reconciliation of operating profit to net cash flow from operating activities Group Group 2005 2004 #'000 #'000 Operating profit 1,383 638 Depreciation 256 108 (Profit)/loss on sale of tangible fixed assets (4) 1 Goodwill amortisation 289 - Decrease/(increase) in stocks 115 (113) (Increase)/(decrease) in debtors (2,320) 1,263 Increase/(decrease) in creditors 121 (347) _____ _____ Net cash inflow from operating activities (160) 1,550 _____ _____ 8. Reconciliation of net cash flow to movement in net funds 2005 2004 #'000 #'000 Decrease in cash in the year (879) (343) Purchase of short term deposits - 1,500 Net funds at 1 January 2,915 1,758 _____ _____ Net funds at 31 December 2,036 2,915 _____ _____ 9. Post balance sheet events On 5 January 2006, the Group acquired the trade and assets associated with the Cloudburst range of garden products from Titan Environmental Limited for consideration of #150,000. On 28 March 2006, the Company declared a dividend of 2.5p per share. This will be paid on 26 May 2006 to all shareholders on the register at 26 April 2006. 10. Publication of non statutory accounts The financial information set out in this preliminary announcement does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The summarised balance sheets at 31 December 2005, summarised consolidated profit and loss account, summarised consolidated cash flow statement and associated notes for the year then ended, have been extracted from the Company's financial statements upon which the auditors opinion is unqualified and does not include any statement under section 237 of the Companies Act 1985. Those financial statements have not yet been delivered to the Registrar. 11. Annual General Meeting The Annual General Meeting of the Company will be held in Leeds on Thursday 22 June 2006. Full details will be included in the published Annual Report and Financial Statements which will be sent to shareholders in due course. This information is provided by RNS The company news service from the London Stock Exchange END FR FGGZFDRKGVZM
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