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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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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:1302L Straight PLC 18 April 2005 Straight plc Preliminary Announcement for the year ended 31 December 2004 (unaudited) Highlights: * Turnover at #12.8 million - up 26% * Pre tax profits at #711,000 - up 58% * Earnings per share at 7.5p * Adjusted earnings per share up from 4.9p to 7.5p * Acquisition of Blackwall Limited * Order book at record levels Commenting on the results, James Newman, Chairman, said "2004 has been another successful year for the Company. Considerable progress has been made in improving margins on the trade side of the business. Looking forward, once Blackwall has been fully integrated, the Company will continue to look at further ways to expand its business activities." Jonathan Straight, Chief Executive, added "Through 2005, we expect to continue to grow organically and profitably in the waste and recycling container market. We will capitalise on all retail opportunities and maximise both up-selling to existing customers and cross-selling through our trade activity. Finally, we plan to make significant strides forward with our material handing division." Contacts Company: James Newman/Jonathan Straight - 0113 245 2244 Simon Mountford Communications: Simon Mountford - 01347 844844 Durlacher Limited: Matthew Robinson/Katherine Roe - 0207 459 3600 The preliminary announcement was approved by the Board on 18 April 2005 Chairman's Statement 2004 has been another successful year for the Company, this being its first full year following admission to AIM in November 2003. Results Turnover for the year grew significantly by 26% to #12.8m. This growth was achieved despite a disappointing performance from our retail sales campaigns. Trade sales, however, remained buoyant throughout the year and the order book going into 2005 was at record levels. Considerable progress has also been made in improving margins on the trade side of the business with more use of UK suppliers and the benefits starting to accrue from the capital expenditure on new product tooling. Profit before tax at #711,000 was 58% up on 2003's result, after absorbing a full year's costs of being a listed company. Dividend In the year, the Board declared and paid an interim dividend of 0.8p per share. On 17 January 2005 the Board declared a final dividend for the year 2004 of 1.6p per share, making a total dividend for the year of 2.4p per share. This was in line with the statement made in the Prospectus at the time of the flotation in 2003. This final dividend is payable on 27 May 2005 to shareholders on the register at 7 January 2005. Materials Handling Division During the year, our materials handling division was developed in conjunction with our long time US supplier, The Rehrig Pacific Company. Two experienced sales personnel were recruited and are pursuing a number of exciting opportunities in a market place which is significantly larger than our own but has relatively few good UK suppliers. The Board intends to expand this division, being both complementary and having a similar business model, to the company's existing activities. Acquisition of Blackwall and Share Placing In December, the Board announced that it had successfully provisionally placed 3.8m new shares at 130p to fund the acquisition of Blackwall Limited (' Blackwall'), a company also based in Leeds, carrying out similar activities to your company. The total cost of the acquisition was #6.75 million. Following shareholder approval of the placing and acquisition at an Extraordinary General Meeting of the Company on 17 January 2005, the new shares were admitted to AIM on l8 January 2005 and the acquisition completed on 19 January 2005. I am pleased to report that the integration of the two businesses is proceeding ahead of our expectations and that the combination of the Blackwall retail brand name and Straight's high profile in trade and B2B activities has given the Company a strong position in the market place for specialist waste containers. Board and Employees I would like to thank my Board colleagues for their support during a very busy year and all employees for their time and efforts to overcome the many challenges which inevitably arose in a business which has again grown substantially for yet another year. Outlook Much has been achieved in 2004. Looking forward, once Blackwall has been fully integrated, the Company will continue to look at further ways to expand its business activities. Recycling, and especially household recycling, is fast becoming part of the fabric of UK society as it is already in many parts of Europe. The Government continues to make funds available to our customers to expand existing and create new recycling schemes. More funds and fiscal action are, however, still needed in order to achieve the targets the Government has set itself. The Company's unique position in being able to provide products and services in this expanding market, should mean another year of organic growth in 2005 James H Newman Chairman 18 April 2005 Chief Executive's Review Floating Straight onto the AIM market at the end of 2003 was the single most important event in the Company's history. In 2004 the challenge was to deliver on the promises we had made at that time. The goals set out on flotation were to expand the business by developing new products and increase market penetration through the creative use of the funds raised. In addition, we were tasked with building a strong management structure to allow for growth and develop a system of sharing our success across the entire team. Finally, it was necessary to seek out suitable companies for acquisition in order to build on our own organic growth. I am pleased to advise that in many respects these goals have been met. A series of product launches and an increase in our overall marketing activity has resulted in a substantial increase in turnover. Key appointments have strengthened the management structure and helped to build a strong and dynamic team. The culmination of our work through 2004 was the acquisition of Blackwall, long considered our biggest rival. This was concluded earlier this year. Waste and recycling container business During 2004, we maintained our lead in the kerbside box market and consolidated our position as a key supplier of wheeled bins. Innovation in containers for organic waste, bulk sales of home composters and strong sales of our systems for workplace recycling also contributed. Sales in this sector rose 37% from #8.3m to #11.4m. Home and garden products business Our business supplying home composters and water butts failed to make the predicted contribution through 2004 with sales of #1.4m, falling from #1.9m achieved in 2003. Although poor weather led to a flat season for the sector in general, our retail catalogue came out too late in the year to make a real impact. Bulk sales to WRAP also replaced some of the retail activity we may have achieved ourselves. I am pleased to advise that the 2005 catalogue is already being distributed and is being favourably received. Materials handling division Working on the same model as our core activity, the launch of our materials handling division, in partnership with The Rehrig Pacific Company, a world leader in this field, demonstrates a commitment to a long term growth strategy. The appointment of two specialised and experienced sales people has allowed tremendous headway to be made. Whilst this market sector only made a small contribution in 2004, we will shortly be commencing production of a new range of distribution containers and hope to make a number of contract announcements in the coming weeks and months. Acquisitions Despite a growing market, we felt that competitive pressures were likely to continue to restrict progress. There was general agreement amongst the board that a quantum leap was needed in order to propel the Company forward. In the last few years, we have established ourselves as the lead player in the kerbside container market and second in the home composter market. Blackwall was the clear leader in home composters, and recently had made substantial in-roads into the growing kerbside containers market. Furthermore, we both were running water conservation campaigns with UK water companies. The case for making the acquisition was compelling. It would give us the lead in all of our specialist niche markets and would be significantly earnings enhancing. Their existing UK supplier base was an attractive proposition in order to increase our own domestic production and provide a platform for our future expansion. Their well developed retail business also appeared a perfect fit with our own. Finally, a strong middle management team running the business provided the resource to expand the combined operation. To date, we have fully combined the retail side of both businesses with the consolidation of our contact centres and carrier networks. A major investment in IT is now allowing the remaining elements to be integrated. The market has been generally well disposed to this move, especially due to the sense of continuity afforded by the continued involvement of the former Blackwall directors as consultants to the business. Contract awards Significant contract awards in the latter half of 2004 included an #820,000 award from Kettering Borough Council in kerbside boxes, wheeled bins and home delivery services and a #608,000 contract to supply Somerset's councils with kerbside containers for organic waste along with our newly-designed kitchen caddy developed in conjunction with them. A second #1m contract to supply wheeled bins to Northampton Borough Council will help to drive turnover forward in 2005. At the close of 2004, our order book was at a record level. Combined with the Blackwall order book, we entered 2005 with #9m of business to fulfill. Management and employees In April 2004, James Mellor was promoted from Financial Controller to Finance Director, a role which he has since fulfilled with dedication and attention to detail. Of particular note has been his focus on cashflow, which has transformed the financial health of the business. Appointments were made in the logistics, sales and marketing departments. With the acquisition of Blackwall, we have gained five key middle-mangers, who have been successfully integrated into the new enlarged structure. Outlook Through 2005, we expect to continue to grow organically and profitably in the waste and recycling container market. We will capitalise on all retail opportunities and maximise both up-selling to existing customers and cross-selling through our trade activity. Finally, we plan to make significant strides forward with our material handing division. As always, our success is also due to the sterling efforts of my colleagues on the board and all of our staff throughout the organisation. We look forward to 2005 with confidence, as the leader of a growing market, which will allow us to deliver added value to our shareholders. Jonathan M Straight Chief Executive 18 April 2005 Finance Director's Review I am pleased to report that the increase in activity enjoyed by the Company in 2003 has been enjoyed once again in 2004, with overall sales 26% higher. The Company has achieved this growth whilst improving margins and releasing cash from working capital. Operating margins Gross margin has increased from 12.1% in 2003 to 15.3% in 2004. This improvement is attributable to improved management of large contracts following the strengthening of the project team, increased UK manufacture which has reduced carriage inwards costs and a close monitoring of overheads. Operating margin has increased from 4.3% to 5.0%. This improvement has been achieved after accounting for the year on year cost increases of over #200,000 incurred directly as a result of becoming a listed company in late 2003. The Company looks forward with confidence to consolidating its supplier base with that of Blackwall in 2005 in order to further maximise cost reduction opportunities. Operating cashflow During a year of substantially increased turnover, I am pleased to report that we have been able to considerably reduce the amount of cash tied up in working capital. A particular focus on debtors, following a newly introduced and disciplined approach to cash collection, has resulted in a #1.3m reduction in trade debtors. Cash generated from operating activities was #1.5m, up from #0.2m in 2003. Capital expenditure The Company invested #280,000 in tooling and IT during the year. This trend will continue as the Company develops its strategy of maintaining control of products and margins by tool ownership and innovative design, and a desire to offer best service through investment in IT infrastructure. Earnings per share Basic earnings per share were 7.5p (2003: 23.6p). Adjusted earnings per share, reported as though all shares issued at 31 December 2003 had been in issue for the whole of 2003 and 2004, has increased by 53% from 4.9p to 7.5p. Outlook Overall, the Company remains both profitable and cash generative and, as a combined business with Blackwall in 2005, I am confident that this pattern will continue. James D Mellor Finance Director and Company Secretary l8 April 2005 Summarised Profit and Loss Account For the year ended 31 December 2004 (unaudited) 2004 2003 Note #'000 #'000 Turnover 2 12,807 10,180 Cost of sales 3 (10,850) (8,947) _____ _____ Gross profit 1,957 1,233 Operating expenses 3 (1,319) (798) _____ _____ Operating profit 638 435 Interest receivable 4 73 16 _____ _____ Profit on ordinary activities before taxation 2 711 451 Taxation 5 (192) (113) _____ _____ Profit for the financial year 519 338 Dividends 6 (166) - _____ _____ Profit retained and transferred to reserves 353 338 _____ _____ Basic earnings per share (p) 7 7.5 23.6 Diluted earnings per share (p) 7 7.3 23.5 All operations are continuing. There were no recognised gains or losses other than the profit for the financial year. Summarised Balance Sheet At 31 December 2004 (unaudited) 2004 2003 #'000 #'000 Fixed assets Tangible fixed assets 460 290 Investments - - _____ _____ 460 290 Current assets Stocks 312 199 Debtors 2,055 3,303 Cash at bank and in hand 2,915 1,758 _____ _____ 5,282 5,260 Creditors: amounts falling due within one year (3,120) (3,267) _____ _____ Net current assets 2,162 1,993 Total assets less current liabilities 2,622 2,283 Provisions for liabilities and charges (17) (14) _____ _____ Net assets 2,605 2,269 _____ _____ Capital and reserves Called up share capital 69 69 Share premium account 1,158 1,175 Profit and loss account 1,378 1,025 _____ _____ Equity shareholders' funds 2,605 2,269 _____ _____ Summarised Cash Flow Statement For the year ended 31 December 2004 (unaudited) 2004 2003 Note #'000 #'000 Net cash inflow from operating activities 8 1,550 203 _____ _____ Returns on investments and servicing of finance Interest received 58 16 _____ _____ Net cash inflow from returns on investments and servicing of finance 58 16 Taxation (99) (61) Capital expenditure Purchase of tangible fixed assets (280) (267) Disposal of tangible fixed assets 1 - _____ _____ Net cash outflow from capital expenditure (279) (267) _____ _____ Equity dividends (56) - Management of liquid resources Purchase of short term deposits (1,500) - _____ _____ Net cash (outflow) before financing (326) (109) Financing Issue of share capital - 1,524 Costs of share issue (17) (289) _____ _____ Net cash (outflow)/inflow from financing (17) 1,235 _____ _____ (Decrease)/increase in cash (343) 1,126 _____ _____ Notes to the Preliminary Announcement For the year ended 31 December 2004 (un-audited) 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 Company have remained unchanged from those set out in the Company's 2003 Financial Statements. 2. Turnover and profit on ordinary activities before taxation The profit on ordinary activities before taxation is stated after the costs stated below (except for those costs relating to the share issue). 2004 2003 #'000 #'000 Depreciation of owned assets 108 37 Operating lease rentals 62 62 Auditors' remuneration - audit services 13 13 Auditors' remuneration - other services 2 41 3. Cost of sales and operating expenses 2004 2003 #'000 #'000 Cost of sales 10,850 8,947 Operating expenses Distribution costs 442 360 Administrative expenses 877 438 _____ _____ 1,319 798 _____ _____ 4. Interest receivable 2004 2003 #'000 #'000 On bank deposits 55 16 Short term deposits 18 - _____ _____ 73 16 _____ _____ 5. Taxation 2004 2003 #'000 #'000 Corporation tax at an average rate of 27% (2003: 23%) 189 99 Deferred tax 3 14 _____ _____ 192 113 _____ _____ Analysis of current tax charge Profit on ordinary activities before tax 711 451 _____ _____ Profit on ordinary activities multiplied by standard rate of Corporation tax in the UK (30%) (2003: 30%) 213 135 Expenses not deductible for tax purposes 7 17 Capital allowances in excess of depreciation (9) (24) Marginal relief (22) (29) _____ _____ 189 99 _____ _____ 6. Dividends 2004 2003 #'000 #'000 Equity dividends Interim dividend of 0.8p per share paid 10 December 2004 56 - Final declared dividend of 1.6p per share 110 - _____ _____ 166 - _____ _____ The final dividend is payable on 27 May 2005 to all shareholders who were on the register of members at 7 January 2005. 7. Earnings per share Basic and diluted earnings per share Basic 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 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 2004 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 2004. 7. Earnings per share (continued) 2004 2003 Weighted Weighted Earnings average no. Per share Earnings average no. Per share #'000 of shares pence #'000 of shares pence Basic earnings attributable to ordinary shareholders 519 6,903,750 7.5 338 1,431,733 23.6 Dilutive effect of securities options - 159,512 (0.2) - 3,758 (0.1) _____ ________ ____ ____ ________ ____ Diluted earnings per share 519 7,063,262 7.3 338 1,435,491 23.5 _____ ________ ____ ____ ________ ____ Adjusted earnings per share In order to improve comparability with 2003, we have calculated adjusted earnings per share as if all shares issued at 31 December 2003 had been in issue throughout that year. 2004 2003 No. No. Earnings of shares Per share Earnings of share Per share #'000 in issue pence #'000 in issue pence Basic earnings attributable to ordinary shareholders 519 6,903,750 7.5 338 6,903,750 4.9 ____ ________ ___ ____ ________ ___ 8. Reconciliation of operating profit to net cash flow from operating activities 2004 2003 #'000 #'000 Operating profit 638 435 Depreciation 108 37 Loss on sale of tangible fixed assets 1 - Increase in stocks (113) (4) Decrease/(increase) in debtors 1,263 (1,835) (Decrease)/increase in creditors (347) 1,570 _____ _____ 1,550 203 _____ _____ 9. Reconciliation of net cash flow to movement in net funds 2004 2003 #'000 #'000 (Decrease)/increase in cash in the year (343) 1,126 Purchase of short term deposits 1,500 - Net funds at 1 January 1,758 632 _____ _____ Net funds at 31 December 2,915 1,758 _____ _____ 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 sheet at 31 December 2004, the summarised profit and loss account, summarised cash flow statement and associated notes for the year then ended, have been extracted from the Company's financial statements. Those financial statements have not yet been delivered to the Registrar, nor have the auditors reported on them. 11. Annual General Meeting The Annual General Meeting of the Company will be held in Leeds on Monday 4 July 2005. 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 ZELFFEZBEBBZ
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