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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 |
From Jul 2019 to Jul 2024
TIDMSTT
RNS Number : 9536O
Straight PLC
27 September 2011
Date: 27 September 2011
On behalf of: Straight plc ("Straight" or "the Group")
Embargoed for release at 0700hrs
Straight plc
Interim Results
For the six months ended 30 June 2011
Straight plc (AIM:STT.L), the Environmental Products and Services Group and the UK's leading supplier of recycling containers, announces its interim results for the six months ended 30 June 2011.
Highlights:
-- Underlying operating profit GBP0.13m (H1 2010: GBP0.99m)
-- Loss before taxation of GBP0.1m (H1 2010: profit of GBP0.8m) after exceptional costs
-- Group sales increased 14% to GBP15.0m (2010 H1: GBP13.2m)
-- Adjusted earnings per share 0.7p (H1:2010 6.5p)
-- Basic loss per share after exceptional costs 1.0p (H1 2010: earnings of 6.5p)
-- Trade Business:
o Continued reduced dependence on the UK municipal sector
o 6% fall in operating costs to GBP1.19m (H1 2010: GBP1.27m)
-- Retail Business:
o Turnover increased 37% to GBP1.59m (H1 2010: GBP1.16m)
o Operating profits increased to GBP0.20m (H1 2010: GBP0.03m)
-- Manufacturing:
o Transformation of the Hull site which has been increased in area by two thirds
o Majority of the Group's products now produced at own manufacturing facility
Commenting on the results, James Newman, Chairman of Straight said:
"With the Group transformed into a vertically integrated operation it is now well placed to make further progress in its key markets and also to exploit the demand for its products and services in other sectors".
Chief Executive, Jonathan Straight added:
"The Group now has a substantial asset base to serve its medium term needs and a strong and revitalised brand to capitalise on all available opportunities. We anticipate a much improved performance with the associated generation of cash during the second half of the year".
For further information please contact:
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Straight plc
Jonathan Straight/Jim Mellor 0113 245 2244
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Ivonne Cantu/Christian Hobart 0207 397 8980
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Rebecca Sanders-Hewett/Jenny Bahr 0207 566 6720
straight@redleafpolhill.com
Notes to Editors
-- Straight plc is the UK's leading supplier of specialist kerbside recycling containers as well as being a key supplier of a broad range of waste and recycling container solutions. Founded in 1993 by the current Chief Executive, Jonathan Straight, the business has since supplied more than 25 million kerbside boxes, baskets and caddies to local authorities across the UK, securing its position as the industry leader.
-- The business operates through two commercial divisions and one manufacturing division. The core Trade Business supplies products in bulk to local authorities, utilities, the waste industry, retailers and other businesses and the Retail Business supplies a range of proprietary environmentally friendly consumer products directly to the public, often in partnership with a local authority or a utility. Straight Manufacturing currently produces the majority of the Group's products.
-- In 2010 two acquisitions changed the business model, which previously relied on outsourced manufacture. In March 2010 Straight acquired the business and assets of the UK business of Helesi plc giving it a proprietary position in the wheeled bin market. This was followed in August 2010 by the acquisition of Dyro Holdings, a key supplier of injection moulded products to the group. The factory, in Hull, has since been developed to include a blow moulding capability.
-- In February 2009, Straight added to its portfolio with the acquisition of Harcostar Garden Products, a long established premium brand consisting of water butts, compost bins, watering cans and accessories. This gained new distribution channels for the business in the UK and in Europe.
-- In 2005, Straight acquired Blackwall Limited, the UK's largest supplier of home composters and water butts. Through the Blackwall brand, Straight has delivered more than 3.5 million compost bins and water butts.
-- Straight plc has established diverse overseas sales channels for its products, some of which are manufactured locally to their markets in North America and in Australia. Other markets are serviced from UK production.
Further information about the company and its products can be found at: www.straight.co.uk
CHAIRMAN'S STATEMENT
Further to the recent trading update I am now able to confirm the performance of the Group for the first six months of 2011. The Group has endured difficult trading conditions this year with rapidly increasing raw material prices affecting the performance of the newly acquired manufacturing operation and reducing margins on major contracts.
Early in 2010 the Board recognised the need to reinforce and take greater control of its supply chain and embarked on a programme of vertical integration in order to achieve this. I am pleased to report that this investment is complete with the vast majority of the Group's products now being produced at its own manufacturing facility in Hull. The site has been significantly enlarged and a new management structure is currently being put in place which will enable the Group to meet the needs of its customers from a more efficient cost base.
Results
Group sales increased in the first half of 2011 by 14% to GBP15.0m (2010 H1: GBP13.2m). These sales were bolstered by contributions from the acquisitions made in 2010 and also by a significant increase in sales in the Retail Business.
Underlying operating profit was GBP0.13m (H1 2010: GBP0.99m). The fall in operating profit was attributable to the rapid rise in polymer prices to unprecedented levels during the first part of the year, peaking in May. This rise impacted the profitability of certain contracts accepted prior to the increase in prices and the performance of the recently acquired manufacturing operation.
Trade Business
Underlying operating profit in the Group's Trade Business fell to GBP0.49m (H1 2010: GBP1.64m). This fall was mainly attributable to the rises in polymer prices already noted above and continuing pressure on margins.
The Group has successfully continued to reduce its dependence on the UK municipal sector with sales to local authority customers and their contractors falling to 68.0% of total Trade sales (H1 2010: 72.5%; FY 2010: 77.2%).
Operating costs fell to GBP1.19m (H1 2010: GBP1.27m). The Board expects this reduced cost level to be maintained in the second half.
Included within the exceptional costs of GBP0.18m are the costs associated with the closure and relocation of two distribution facilities.
Retail Business
Sales in the Retail Business increased substantially to GBP1.59m (H1 2010: GBP1.16m). This increase is a reflection of the Group's success in securing sole-supplier status on the National Home Composting Framework and in making further progress in its relationships with utility companies. The Retail Business continues to benefit from the Group's expansion into the manufacture of blow moulded products.
Operating profits increased considerably in the period to GBP0.20m (H1 2010: GBP0.03m), driven by the higher level of sales and reduced distribution costs.
Manufacturing
The period has seen the transformation and enlargement of the Hull site, which has been increased in area by two thirds. This has allowed most of the Group's storage and logistics to be located adjacent to the manufacturing operation thereby reducing external storage costs. In addition, the Board has reviewed the production capacity and headcount at the site. As a consequence the layout of the entire plant has been improved and a redundancy programme is being implemented.
The operating profit from manufacturing operations was GBP0.12m (H1 2010: n/a) but, as a result of the changes being undertaken, performance is expected to improve considerably in the latter months of the year.
Central Costs
Central costs remained unchanged in the period at GBP0.68m despite the expansion of the Group.
Overall Result
After accounting for the exceptional costs of GBP0.18m (H1 2010: GBP0.04m) associated with the consolidation of logistics, and finance costs of GBP0.06m (H1 2010: GBP0.01m), the Group recorded a loss before tax of GBP0.11m (H1 2010: profit of GBP0.85m).
Earnings Per Share
Adjusted earnings per share for the period were 0.7p (H1 2010: 6.5p) with a basic loss per share of 1.0p (H1 2010: earnings of 5.3p).
Acquisitions
The Board has considered a number of acquisition targets and opportunities since the completion of the acquisition of the Dyro business last year. However the focus through the period and into the second half remains with the integration of the newly acquired manufacturing business and once this is complete, the Board will return to its corporate development agenda.
Dividend
The Board remains committed to a policy of paying dividends. However, in view of the trading performance in the current year to date and the substantial cash investment being made into the manufacturing operation, the Board is not recommending an interim dividend at this stage. The Board will review this position when the full year results are known.
Outlook
General economic conditions remain challenging with pressures on margins and material prices continuing to be volatile. The substantial reorganisation required and the additional investment into the Group's manufacturing operation has affected the financial performance in the period.
Nevertheless, with the Group now transformed into a vertically integrated operation it is well placed to make further progress in its key markets and also to exploit the demand for its products and services in other sectors.
James H Newman
Chairman
27 September 2011
OPERATING REVIEW
The business has faced challenges in the first half of 2011. A rapid increase in raw material prices and increasing competitive pressures have impacted on progress. However, despite these setbacks, our market share has remained intact.
Our decision to enter manufacturing has been critical to maintain our leading position in the market. Without a manufacturing capability we believe the business would have encountered difficulties in maintaining continuity in the supply chain. Following the failure of a key blow moulding supplier, we were able to invest in our own equipment in order to enable us to meet ongoing demand for products such as compost bins and water butts
The Group has also undergone a rebranding exercise following a detailed process of market research. The new branding, launched earlier this month, reflects feedback from customers and stakeholders and gives the business a stronger and more recognisable identity for all of its markets.
Trade Business
Municipal Recycling Containers
Sales increased in the first half of 2011 to GBP9.1m (H1 2010: GBP8.9m), allaying any fears that spending cuts would impact the waste and recycling sector in the short term. However, we remain committed to reducing our exposure to the public purse and further progress has been made during the period in expanding our non-municipal business.
Earlier in 2011 the Government published its waste review reinforcing its commitment to recycling and proposing initiatives which will serve to drive the sector forward. The Coalition Government believes that the waste and recycling industry is central to the development of a green economy and will grow at 3-4% per year for the coming few years.
We have had a number of recent contract wins including the provision of wheeled containers and inner caddies to Nuneaton and Bedworth Borough Council and food waste caddies with home delivery to Chelmsford Borough Council. The latter contract included the provision of compostable liners for the kitchen caddies. We continue to make excellent progress in the liner market and have increased our market share.
Corporate Recycling
In the Corporate Recycling market the Ecosort(R) range is now established as a leading office recycling solution with an 8% increase in sales in the period to GBP0.39m (H1 2010: GBP0.36m). The range has recently been extended with several accessory options in order to further boost demand.
Garden and Hardware
Activity in the Garden and Hardware market doubled to GBP3.0m (2010 H1: GBP1.5m) with the inclusion of an additional GBP1.4m of DIY products from the Dyro Holdings acquisition which made no contribution to sales in the same period of 2010.
There is a strong synergy between the two parts of this division with a good cross-pollination of customer interests and potential synergies to be gained going forward.
Overseas Markets
Export and overseas sales increased by 29% to GBP0.9m (H1 2010 GBP0.7m) mainly driven by higher sales in Europe and Australia. US sales decreased but a new distributor who has extensive experience of our core markets has now been recruited and it is anticipated that there will be a significant increase in activity as a result.
Retail Business
The substantial increase in activity in the Retail Business has been achieved as a result of increased sales to members of the public through Council promotions and through the new water saving pack activity running with several water companies. Profitability increased to GBP0.20m (2010 H1: GBP0.03m) as a result of the higher sales, proprietary manufacture and an improved delivery performance.
New water saving packs include a range of products to help householders save water and are issued free of charge by many water companies. The timely acquisition of Tapmagic gave us a key competitive advantage in this area. Further progress in this market is expected with the planned development of a number of new and innovative products.
Manufacturing operations
The Hull site has been enhanced with an overhaul of systems and IT shortly to be concluded. The re-design of the factory layout has facilitated significant cost reductions and further improvements are expected.
The Group achieved full production capacity in blow moulding manufacture during July and this will contribute to its competitiveness in garden and hardware products. A new manufacturing director has been appointed and following the redesign of the factory layout during August considerable efficiency gains are expected.
Cash Generation
Following the significant investments the Group made in the purchase of Dyro Holdings and the expansion of the Hull site, we have a net debt position at the end of H1 2011 of GBP3.7m (H1 2010: net cash GBP0.4m). Bank finance continues to be paid down at the initially agreed rates.
The increase in inventories during the period was attributable to the increased use of recycled polymer and also large quantities of compostable liners sourced from the Far East. These stocks are currently falling and will continue to reduce as the second half of the year progresses.
Outlook
The Group now has a substantial asset base to serve its medium term needs and a strong and revitalised brand to capitalise on all available opportunities. We anticipate a much improved performance with the associated generation of cash during the second half of the year.
Jonathan M Straight
Chief Executive
27 September 2010
Consolidated Income Statement
For the 6 months ended 30 June 2011
Half year to Half year to Year ended
30 Jun 2011 30 Jun 2010 31 Dec 2010
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
Revenue 2 14,992 13,192 30,660
Cost of sales (11,228) (9,917) (23,148)
______ ______ _____
Gross profit 2 3,764 3,275 7,512
Operating costs (3,631) (2,282) (5,576)
______ ______ _____
Underlying operating
profit 133 993 1,936
Corporate development
costs - (92) (308)
Exceptional items 5 (183) (40) (90)
Finance costs (61) (14) (65)
_____ _____ _____
(Loss)/profit before
taxation (111) 847 1,473
Income tax expense 3 - (238) (487)
_____ _____ _____
(Loss)/profit for the
period attributable to
equity holders of the
parent (111) 609 986
_____ _____ _____
Earnings per share for profit attributable to the
equity holders of the Company during the period
Adjusted 6 0.7p 6.5p 12.2p Basic 6 (1.0)p 5.3p 8.6p Diluted Basic 6 (0.9)p 5.2p 8.4p
Consolidated Statement of Changes in Equity
For the 6 months ended 30 June 2011
Half year Half year
to to Year ended
30 Jun 30 Jun 31 Dec
2011 2010 2010
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Balance at start of period 10,292 9,700 9,700
Profit/(loss) for the period
attributable to the equity
holders of the Company (111) 609 986
Arising on grant of share
options 8 8 19
Dividends paid (300) (253) (413)
______ ______ ______
9,889 10,064 10,292
______ ______ ______
Statement of Financial Position
At 30 June 2011
30 Jun 30 Jun 31 Dec
2011 2010 2010
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Assets
Non current assets
Property, plant and equipment 8,333 5,866 7,624
Intangible assets 6,786 4,703 7,583
Investments - 35 -
_____ _____ _____
15,119 10,604 15,207
Current assets
Inventories 3,589 1,880 2,630
Trade and other receivables 4,591 4,914 5,179
Cash and cash equivalents - 1,831 809
_____ _____ _____
8,180 8,625 8,618
_____ _____ _____
Total assets 23,299 19,229 23,825
_____ _____ _____
Liabilities
Current liabilities
Overdraft facility (515) - -
Trade and other payables (6,870) (6,996) (7,257)
Financial liabilities (1,289) (923) (1,125)
Income tax payable (678) (596) (575)
Provisions (515) - (193)
_____ _____ _____
(9,867) (8,515) (9,150)
_____ _____ _____
Non current liabilities
Trade and other payables (775) - (966)
Financial liabilities (1,858) (472) (2,507)
Deferred taxation (493) (178) (493)
Provisions (417) - (417)
_____ _____ _____
(3,543) (650) (4,383)
_____ _____ _____
Total liabilities (13,410) (9,165) (13,533)
_____ _____ _____
_____ _____ _____
Net assets 9,889 10,064 10,292
_____ _____ _____
Equity attributable to
equity holders of parent
Share capital 119 115 119
Reserves 7,412 6,978 7,405
Retained earnings 2,358 2,971 2,768
_____ _____ _____
Total equity 9,889 10,064 10,292
_____ _____ _____
Consolidated Cash Flow Statement
For the 6 months ended 30 June 2011
Half year Half year
to to Year ended
30 Jun 30 Jun
2011 2010 31 Dec 2010
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Profit after tax (111) 609 986
Adjustments for
Depreciation 479 235 656
Profit on sale of property, plant and
equipment - (30) (49)
Intangibles amortisation 44 67 131
Net finance costs 61 15 65
Taxation expense recognised in income
statement - 238 487
Share option costs recognised in income
statement 8 8 19
Increase in inventories (959) (567) (666)
Decrease/(increase) in trade and other
receivables 588 (1,812) (1,159)
Increase in trade and other payables 580 2,995 2,083
____ ____ ____
Cash generated from operations 690 1,758 2,553
Income tax paid - - (492)
____ ____ ____
Net cash generated from operating
activities 690 1,758 2,061
Cash flows from investing activities
Purchase of business combinations net
of cash - - (2,726)
Purchases of intangibles (2) - (600)
Purchases of property, plant and
equipment (1,167) (2,718) (2,233)
Proceeds from sale of property, plant
and equipment - 80 130
____ ____ ____
Net cash used in investing activities (1,169) (2,638) (5,429)
Cash flows from financing activities
Interest paid (61) (15) (65)
Dividends paid (300) (253) (418)
Proceeds from borrowings 100 1,625 3,755
Repayment of borrowings (584) (230) (679)
____ ____ ____
Net cash used in financing activities (845) 1,127 2,593
____ ____ ____
Net (decrease)/increase in cash and
cash equivalents (1,324) 247 (775)
Cash and cash equivalents at beginning
of period 809 1,584 1,584
____ ____ ____
Cash and cash equivalents at end of
period (515) 1,831 809
____ ____ ____
Notes to the Interim Results Announcement
For the 6 months ended 30 June 2011
1. General information
Straight plc "the Group" supplies container solutions for source separated waste in the UK and overseas. The Company is registered in England under company registration number 2923140 and its registered office is No 1 Whitehall Riverside, Leeds, LS1 4BN. As a consequence of its AIM listing, the Group is required to prepare statutory financial statements which comply with accounting standards as adopted for use in the European Union "EU" in respect of its financial year ended 31 December 2011.
These consolidated interim financial statements have been approved for issue by the Board of Directors on 27 September 2011.
The financial information set out in this interim report does not constitute statutory accounts as defined by the Companies Act 2006. The Group's statutory financial statements for the year ended 31 December 2010 have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under Section 498 of the Companies Act 2006.
These interim financial statements have been prepared on the same basis and using the same accounting policies as used in the full financial statements for the year ended 31 December 2010 and are in accordance with IAS 34 'Interim Financial Reporting'. The Board has prepared a working capital forecast based upon trading assumptions and has concluded that the Group remains a going concern.
2. Segmental information
The Group's activities are organised into three segments: Trade; Retail and Manufacturing. These divisions are the basis on which the Group reports its primary segmental information.
Half year Half year
to to Year ended
30 Jun
30 Jun 2011 2010 31 Dec 2010
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Revenue
Trade 13,406 12,032 27,536
Retail 1,586 1,160 2,171
Manufacturing 7,956 - 5,951
Inter-segment sales (7,956) (4,998)
_____ _____ _____
14,992 13,192 30,660
_____ _____ _____
Gross profit
Trade 1,681 2,908 5,874
Retail 595 367 670
Manufacturing 1,488 - 968
_____ _____ _____
3,764 3,275 7,512
Operating costs
Trade (1,195) (1,270) (2,726)
Retail (392) (334) (669)
Manufacturing (1,367) - (768)
Central costs (677) (678) (1,413)
_____ _____ _____
(3,631) (2,282) (5,576)
Underlying operating profit
Trade 486 1,638 3,148
Retail 203 33 1
Manufacturing 121 - 200
Central costs (677) (678) (1,413)
_____ _____ _____
133 993 1,936
____ ____ ____
3. Income tax expense
Half year Half year
to to Year ended
31 Dec
30 Jun 2011 30 Jun 2010 2010
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Current tax - 238 324
Deferred tax - - 163
____ ____ ____
- 238 487
____ ____ ____
4. Dividends
Half year Half year
to to Year ended
31 Dec
30 Jun 2011 30 Jun 2010 2010
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Amounts recognised as equity
distributions in the period 305 253 413
Refund on 2010 dividend paid
to shares held in trust (5) - -
_____ _____ ____
300 253 413
_____ _____ _____
Date dividend paid 03.06.11 30.03.10 30.03.10
04.06.10 04.06.10
17.12.10
Amount paid per share 2.65p 1.5p 1.5p
0.7p 0.7p
1.35p
5. Exceptional items
The exceptional item of GBP183,000 relates mainly to the costs of closure of two distribution sites and the consolidation of the associated distribution activity on the Dyro Holdings site in Hull.
6. Earnings per share
Half year Half year
to to Year ended
30 Jun 30 Jun 31 Dec
2011 2010 2010
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Earnings
Earnings for the purposes
of basic earnings per
share being profit for
the period attributable
to the equity holders
of the Company (111) 609 986
Exceptional items 183 40 90
Corporate development
costs - 92 308
Share scheme charges 8 8 19
____ ____ ____
Earnings for the purposes
of adjusted earnings
per share being the
adjusted profit for
the period attributable
to the equity 80 749 1,403
holders of the company ____ ____ ____
Number of shares
Weighted average number
of ordinary shares for
the purposes of basic
earnings per share 11,499,294 11,499,294 11,499,294
Dilutive effect of share
options 260,071 205,196 254,003
_________ _________ _________
11,759,365 11,704,490 11,753,297
_________ _________ _________
Earnings per ordinary
share
Adjusted 0.7p 6.5p 12.2p
Basic (1.0)p 5.3p 8.6p
Diluted (0.9)p 5.2p 8.4p
7. Business Combinations - Dyro Holdings Limited
The fair value of the identifiable assets and purchase consideration of Dyro Holdings Limited at acquisition has now been determined according to IFRS3(R) giving rise to the change in fair values shown in the table below.
30 Jun
2011 31 Dec 2010
Unaudited Audited
GBP'000 GBP'000
Property, plant and equipment 1,228 1,645
Bank overdraft (643) (643)
Trade and other receivables 2,514 2,514
Inventories 651 651
Trade payables (4,220) (4,220)
Provisions for warranties (515) (610)
Deferred tax liabilities (152) (152)
Provision for capital gains
tax (103) -
______ ______
Total identifiable net liabilities
at fair value (1,240) (815)
Goodwill arising at acquisition 1,493 2,226
______ ______
Total purchase consideration
transferred 253 1,411
______ ______
8. This statement is being sent to the shareholders of the Company and will be available at the Company's registered office at No 1 Whitehall Riverside, Leeds, LS1 4BN.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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