We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register to chat with like-minded investors on our interactive forums.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Swp Grp. | LSE:SWP | London | Ordinary Share | GB00B010NX28 | ORD 0.5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 8.75 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
Hot Features
Premium
RNS Number:2530E
SWP Group PLC
26 November 2002
Preliminary Announcement
For the year ended 30 June 2002
CHAIRMAN'S STATEMENT
Corporate Review
On the whole the year under review can be regarded as having been a positive one
for your Company. Sales increased sharply, underlying operating profit (ie
before exceptional items) moved ahead strongly and across the Group a range of
initiatives was implemented which should provide the basis for profitable growth
in the months and years ahead.
Much less satisfactory were the outcomes of two legal actions in which the Group
has been engaged for some considerable time. In both instances legal opinion
went against us with the inevitable consequences in terms of cost and expense.
However the Group is now entirely free from the legacies of the past and any
further litigation will relate to issues where we will be the plaintiff rather
than the defendant and where expert legal opinion suggests that we have a good
chance of success.
Meanwhile our focus is very firmly on maintaining and developing the growth
momentum which exists in each of our operating companies. Despite the financial
strictures under which the Group continues to operate, we have been able to find
sufficient funds to support major investments in two of our three subsidiaries
and we believe that each of our companies is well placed to grow significantly
from its present position. We are committed to providing whatever further
support they require to achieve their full potential and will actively encourage
them to exploit the opportunities available to them.
Results
In the year to 30th June 2002 the Group recorded an overall loss of #640,000
(2001: #35,000 loss) on sales of #16,347,000 (2001: #13,316,000).
This result was heavily impacted by a number of exceptional items and had it not
been for these the Group would have reported a profit, the first such result for
many years.
On sales which were up by nearly 23%, underlying operating profit increased by
36% to #586,000 (2001: #432,000) which, even after increased financing costs of
#458,000 (2001: #409,000), would have been sufficient to leave the Group in
profit at the pre-tax level.
However a number of items combined to give rise to total exceptional operating
expenses of #770,000. We have already made brief reference to the two matters
which were the subject of litigation. The first of these related to the
acquisition of DRC Polymer Products Limited which, as many shareholders will be
aware, has suffered large losses ever since and is only now in the process of
being turned round. It was our view that the Group had been seriously misled
by the principal vendor of DRC as to the short and medium-term prospects for the
Company and when that individual initiated legal action to recover the balance
of monies owed to him by the Group, we registered a counterclaim based on the
overall losses incurred by the Group as a result of the acquisition. For a
variety of reasons our legal team believed that we had a reasonable chance of
success but the opinion of the Judge was very much based on the principle of '
caveat emptor' and he found against us. We are still debating what implications
this judgment has for the other parties involved in the transaction. This case
gave rise to a cost of around #440,000 in the year and we also had to issue
additional shares in satisfaction of the Convertible Loan Stock held by the
vendor.
The second case concerned the supply by DRC of material for a roofing project in
Carrickfergus, Northern Ireland, in September 1997. Certain difficulties had
been experienced when the material came to be fixed but it was our view that the
problems were attributable in the main to a combination of poor quality
installation and exceptionally adverse weather conditions. The original claim
by the plaintiffs (the main contractor and the roofing contractor) amounted to
nearly # 600,000 but during the run-up to trial they put forward a settlement
proposal which required DRC to pay an amount not much more than 10% of that sum
and although we ourselves regarded even this amount as unreasonably high our
legal team felt strongly that the risks involved in proceeding to trial made it
desirable to negotiate an out-of-court settlement. The result was that in
addition to the sum paid to finish the action we had to settle our own legal
costs. In the year the total cost to the Group was around #120,000.
Further exceptional costs were incurred in the form of a loan facility
redemption fee which followed the decision of the Board to negotiate new banking
facilities with the Bank of Scotland rather than continue with Natwest Bank.
Relations with the latter had become much more difficult following its
acquisition by the Royal Bank of Scotland.
Finally some #70,000 of abortive costs were incurred following the decision of
Fullflow not to proceed with the development of a new facility on land adjacent
to its existing units at Holbrook, Sheffield. Whilst this is a substantial
amount it is relatively small compared to the ongoing savings achieved by
acquiring the alternative premises referred to later in this statement.
Review of Operations
The Group continues to operate through three autonomous trading subsidiaries
each of which is a supplier of specialist products to the construction and
engineering industries. Fullflow Group, which is based in Sheffield, designs,
manufactures and installs syphonic roof drainage systems and distributes
pipework and fittings to the gas, electricity and water industries; Crescent of
Cambridge is based in St Ives and is the UK's leading manufacturer of spiral and
helical staircases; and DRC Polymer Products, which is based in Soham, is a
supplier of polymer-based sheet materials for use in roofing and structural
waterproofing applications and other more specialised markets such as
fireproofing, soundproofing and animal welfare.
Fullflow Group
The year was one of significant change for Fullflow.
Most encouragingly the embryonic French business achieved strong sales growth.
A new office and pipework fabrication facility was opened on the outskirts of
Paris and this, plus a strengthening of the local management team, enabled the
French operation to take on a growing number of substantial projects throughout
France and beyond. Fullflow's belief that the French market would be receptive
to the comprehensive turn-key service which it offers has been confirmed and
sales out of the Paris office are already approaching half of those achieved in
the UK. In terms of both customer and geographical reach a broad platform has
been created in a very short period and although the operation is not yet
profitable on account of start-up costs and an understandable degree of
inefficiency, it is now poised to achieve the extra growth required to produce a
significant contribution to Fullflow Group earnings.
In Spain Fullflow's ambitions were given a huge boost when it was awarded two
contracts covering the whole of the new development at Madrid (Barajas) Airport.
Together these contracts are worth around #3 million and will provide an
important source of revenue well into the 2003/4 financial year. Given that
Fullflow had only just established itself in Spain, the fact that the company
was able to convince the Spanish Airport Authority to approve its system for use
in such an important national project speaks volumes and underlines the
reputation which Fullflow has earned for the quality of its design and
workmanship.
It goes without saying that the bulk of Fullflow's efforts in Spain will be
geared towards ensuring that the Barajas project is an operational and financial
success but with all of Spain's leading contractors working on the project there
exists a tremendous platform on which to create a broadly based Spanish
business.
In the UK Fullflow maintained its position of pre-eminence in the syphonic roof
drainage market and completed a number of significant projects for a wide range
of major clients including IKEA, Railtrack, Sainsbury, Pfizer and HM Treasury.
To date much of the emphasis in the UK has centred on Plasflow, whose main focus
in the past has been the fabrication and assembly of pipework and fittings for
the syphonic operation. However it had become increasingly clear to Fullflow's
management that an opportunity existed to create a standalone business
specializing in the manufacture and distribution of high quality fittings for
the pipework industry and it was decided the time was right to initiate such a
move. After a false start, the impact of which has been referred to earlier,
approval was given for the purchase and refurbishment of premises near Junction
33 of the M1. One of the main benefits of this site is the large external
storage area which will enable Plasflow to stock a wide range of different pipe
sizes and specifications and thus facilitate rapid response times in what is
seen to be a service-oriented market.
A substantial number of new cutting and welding machines have been purchased and
Plasflow now has one of the best equipped fabrication facilities in the whole of
the UK. A new but experienced sales team has been recruited and it is
anticipated that sales will move ahead strongly during the months ahead.
Against a background of such change and development it is perhaps not surprising
that Fullflow's operating profits exhibited a slight dip but much has been
achieved in terms of creating the foundation for future expansion.
Crescent of Cambridge
Following the disappointing ending to the previous financial year, Crescent
bounced back strongly to register a satisfactory result for the year under
review.
Sales of spiral staircases reached a record high with a significant number of
developers keen to make them a feature in both warehouse conversions and newly
built properties.
Sales of helical staircases also showed a marked increase and reinforced
Crescent's view that a market does exist for the sort of staircase which acts as
the visual centrepiece of a public area, whether it be in a car showroom, pub or
prestigious office.
However the main feature of Crescent's year was the acquisition of a new plasma
cutter and press brake, together with lifting equipment to move components more
efficiently in this area of the factory. These state-of-the-art CNC machines
have the potential not only to significantly increase productivity in certain
important aspects of Crescent's operations but also to increase the company's
capacity to produce geometrically complex staircases and at the same time
improve accuracy levels still further and reduce erection times on site.
Payback is expected to be rapid and Crescent is now equipped to compete even
more successfully in the marketplace.
Crescent finished the year with an order book which, at only just short of #2
million, represented almost six months worth of forward commitments.
DRC Polymer Products
Although DRC once again recorded a loss for the year the extent of the loss was
much reduced and with sales ahead by nearly 30% there were at last some real
signs of progress.
Although sales of the company's traditional products, mainly those for the
roofing and structural waterproofing industries, continue to provide a solid
base, the future of the company depends on its ability to play a creative,
technically innovative and commercially astute role in the development of
partnership arrangements with users and distributors of specialist products.
In recent months the omens have appeared to be good: three such arrangements
already exist and they accounted for all of the sales growth achieved by the
company. Each of them fits the characteristics which DRC is seeking: a
knowledgeable, committed distributor with no manufacturing ambitions, a niche
market, a product (or range of products) which requires at least a degree of
technical and engineering competence and a genuine partnership based on mutual
trust and shared ambitions.
By themselves these three arrangements should provide the basis for substantial
revenue growth in the future but there is a need for DRC to broaden its base
still further and it is in this area where much of DRC's effort is focused. In
this context it is pleasing to report that there are other products in the
pipeline and although these may take some time to reach commercial fruition one
in particular appears to have huge potential.
If, as we are now confident will be the case, DRC can achieve this extra degree
of sales momentum then the support which we have provided to the company since
its acquisition will prove to have been justified.
Finance
The losses recorded by the Group in recent years have had an inevitable and
significant impact on the Group's reserves and borrowings.
We have received the benefit of positive support from our new bankers and this
gives the Directors confidence that the Group has sufficient working capital to
meet its existing obligations and those for the foreseeable future. However in
order for the Group to fully realise its expansion plans mentioned previously we
may revert to shareholders for additional funding in early 2003.
Litigation
Fullflow Group has been notified of the likelihood of a substantial claim being
made against one of its subsidiaries in connection with the alleged failure of a
system installed as long ago as 1994. It is our view that for a variety of
reasons this potential claim is without merit and no provision has been made in
respect of it.
Employees
As ever the Group depends on its employees to deliver the strategies and budgets
which we agree with our trading subsidiaries and we wish to place on record our
appreciation of their efforts in what can often be a frustrating and pressured
environment.
In any business stability, experience and commitment are prerequisites of
success and right across the Group we believe that the teams which we have in
place possess these characteristics in large measure.
Whilst it is generally not our policy to refer to individuals in this report it
would be remiss of us not to congratulate John Smith, Chief Executive of
Fullflow Group, on his selection as South Yorkshire Businessman of the Year, an
award which he received from Patricia Hewitt, Secretary of State for Trade and
Industry. Having invented the Fullflow self-priming syphonic system himself,
John has been the driving force behind Fullflow's successful expansion and this
award recognizes his achievements and reflects the fact that Fullflow is now a
well known and widely respected name in the construction industry throughout
Europe and beyond.
Current Trading and Future Prospects
Overall the Group has had a reasonably positive start so far to the new
financial year. To date the markets served by our businesses have shown few if
any signs of weakness and although some commentators anticipate at least the
possibility of a downturn next Spring we believe that each of our subsidiaries
has enough momentum behind them for any such lessening of activity not to
represent a serious threat.
The budgets which we have agreed with our subsidiaries are challenging but
achievable and reflect the optimism which our management teams themselves feel
about their prospects and potential. In each of our companies there is a real
belief that they have the overall wherewithal to achieve significant levels of
growth and we look to the future with a considerable degree of confidence.
Accordingly it is our view that if we do have to raise additional equity we will
be doing so as a business which is on a healthy growth path and is well on the
road to producing value for shareholders.
R.M. Muddimer
Chairman
18 November 2002
Consolidated Profit and Loss Account
Year ended 30 June 2002 Restated
2002 2001
Notes #'000 #'000
Turnover
Continuing operations 1 16,347 13,316
Cost of sales (9,445) (7,832)
Gross profit 6,902 5,484
Net operating expenses (6,316) (5,052)
Operating profit before exceptional items 586 432
Net operating expenses - exceptional items 2 (770) (274)
Operating (loss) / profit (184) 158
Interest receivable 2 2
Interest payable and similar charges (458) (409)
Loss on ordinary activities before taxation (640) (249)
Taxation on loss on ordinary activities - 214
Loss on ordinary activities after taxation (640) (35)
Dividends - -
Retained loss for the financial year (640) (35)
Basic loss per share (pence) 3 (0.20)p (0.01)p
Diluted loss per share (pence) 3 (0.20)p (0.01)p
Statement of Total Recognised Gains and Losses
Year ended 30 June 2002
The Group
2002 2001
#'000 #'000
Loss for the financial year (640) (249)
Prior year adjustment in respect of adoption of FRS19 - 214
Restated loss for the financial year (640) (35)
Goodwill written off (158) -
Total losses recognised since last annual report (798) (35)
Note of Historical Cost Profit and Losses
2002 2001
#'000 #'000
Loss for the financial year (640) (249)
Prior year adjustment in respect of adoption of FRS19 - 214
Restated loss for the financial year (640) (35)
Difference between a historical cost depreciation charge and the actual
depreciation charge of the year calculated on the revalued amount
18 17
Historical cost loss on ordinary activities before taxation (622) (18)
Historical cost loss for the year retained after taxation, minority interests,
extraordinary items and dividends (622) (18)
Reconciliation of Movements in Shareholders' Funds
2002 2001
#'000 #'000
Loss for the financial year (640) (249)
Prior year adjustment in respect of adoption of FRS19 - 214
Restated loss for the financial year (640) (35)
Goodwill written off (158) -
New share capital subscribed or to be subscribed 555 8
Net decrease to shareholders' funds (243) (27)
Opening shareholders' funds 956 983
Closing shareholders' funds 713 956
Goodwill written off directly to the profit and loss account relates to the
acquisition of DRC Holdings Ltd in 1998.
Consolidated Balance Sheet
At 30 June 2002 Restated
2002 2001
#'000 #'000 #'000 #'000
Fixed assets
Intangible assets 42 14
Tangible assets 3,709 2,942
3,751 2,956
Current assets
Stocks 2,658 1,746
Debtors falling due within one year 4,339 3,928
Debtors falling due after more than one year
263 188
7,260 5,862
Creditors: amounts falling due within one year (6,824)
(4,573)
Net current assets 436 1,289
Total assets less current liabilities 4,187
4,245
Creditors: amounts falling due after more than 3,677 3,493
one year
Provision for liabilities and charges (203) (204)
Capital and reserves
Share capital 6,827 6,352
Share premium account 1,295 1,215
Capital reserve 41 41
Revaluation reserve 524 542
Profit and loss account (7,974) (7,194)
Equity shareholders' funds 713 956
4,187 4,245
Consolidated Cash Flow Statement
Year ended 30 June 2002
2002 2001
Notes #'000 #'000 #'000 #'000
Net cash outflow from operating activities 4(a) (207) (273)
Returns on investments and servicing of finance
Interest received 2 2
Bank and loan interest paid (330) (320)
Hire purchase interest (48) (45)
(376) (363)
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (981) (261)
Payments to acquire intangible fixed assets
(33) -
Receipts from sales of tangible fixed assets 56 21
(958) (240)
Acquisitions and disposals
Purchase of minority interest - (55)
- (55)
Net cash outflow before financing (1,541) (931)
Financing
Issue of ordinary share capital 397 8
Bank loans received 4,000 3,500
Bank loan repayments (3,500) (1,844)
Capital element of finance lease and hire purchase
payments (256) (188)
641 1,476
(Decrease)/increase in cash 4(b) (900) 545
Parent Company's Balance Sheet
At 30 June 2002 2002 2001
#'000 #'000 #'000 #'000
Fixed assets
Tangible assets 635 640
Investments 9,653 7,153
10,288 7,793
Current assets
Debtors 5,201 5,607
Creditors: amounts falling due within one year (4,206) (2,362)
Net current assets 995 3,245
Total assets less current liabilities 11,283 11,038
Creditors: amounts falling due after more than one 3,150 3,350
year
Capital and reserves
Share capital 6,827 6,352
Share premium account 1,295 1,215
Profit and loss account 11 121
Equity shareholders' funds 8,133 7,688
11,283 11,038
Notes to the Financial Statements
1 SEGMENTAL ANALYSIS BY CLASS OF BUSINESS
The analysis by class of business of the Group turnover, result before
taxation and net assets is set out below:
2001
2002 Profit/ Profit/
(loss) before (loss) before
taxation taxation
Turn-over Net assets Turn-over Net assets
#'000 #'000 #'000 #'000 #'000 #'000
Syphonic drainage 9,907 696 1,865 7,601 747 2,226
Staircases 3,418 240 1,858 3,351 141 1,610
Polymer sheet material 3,022 (284) 34 2,364 (642) (2,083)
16,347 652 3,757 13,316 246 1,753
Operating exceptional costs
(770) (274)
Common credits and net
liabilities (66) (3,044) 186 (797)
(Loss)/profit before interest (184) 158
Net interest payable (456) (407)
Loss before taxation (640) (249)
Total net assets 713 956
The Group operates predominantly within the United Kingdom. The geographical
analysis of the Group's turnover by destination is as follows:-
2002 2001
#'000 #'000
United Kingdom 13,278 12,419
Europe 3,023 826
Africa and Middle East 46 71
16,347 13,316
2. EXCEPTIONAL ITEMS
Exceptional items comprise the following:
2002 2001
#'000 #'000
Direct costs and legal expenses in respect of the litigation with the 442 149
principal vendor of DRC Holdings Ltd
Costs of settlement of claim against DRC Polymer Products Ltd in respect 118 -
of supply of roofing materials in 1997
Abortive costs in respect of proposed expansion of Fullflow's new 71 -
facility on land adjacent to its existing units
Bank loan facility redemption fee 139 -
Surrender premium paid in disposing of a medium term occupational lease -
no longer required 125
770 274
3. LOSS PER SHARE
The loss per share calculation for the year ended 30 June 2002 is based on
the weighted average of 320,500,250 (2001: 317,441,423) ordinary shares in
issue during the year and the loss of # 640,000 (2001: loss of #35,000).
The company's share options are not dilutive for loss per share
calculations.
4. NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
(a) Reconciliation of operating profit to net cash (outflow) from operating
activities
2002 2001
#'000 #'000
Operating (loss)/profit (184) 158
Depreciation charges 433 402
Amortisation of trade names and patents 5 24
Profit on sale of tangible fixed assets (35) (5)
Increase in stocks (912) (451)
Increase in debtors (486) (492)
Increase in creditors 972 91
(207) (273)
(b) Reconciliation of net cash flow to movement in net debt
2002 2001
#'000 #'000
(Decrease)/increase in cash in period (900) 545
Cash inflow from increase in debt
and lease financing (244) (1,468)
Change in net debt resulting from cash flows (1,144) (923)
New finance leases (240) (146)
Movement in net debt in period (1,384) (1,069)
Net debt at 30 June 2001 (4,682) (3,613)
Net debt at 30 June 2002 (6,066) (4,682)
(c) Analysis of net debt
At 30 June Cash Non cash At 30 June
2001 Flow changes 2002
#'000 #'000 #'000 #'000
Overdrafts (849) (900) - (1,749)
Debt due within one year (150) (350) - (500)
Debt due after one year (3,350) (150) - (3,500)
Finance leases and hire purchase (333) 256 (240) (317)
Total (4,682) (1,144) (240) (6,066)
5. DIVIDEND
The Directors are not recommending the payment of a dividend.
The 2002 figures have been abridged from the audited statutory accounts for the
year which will be posted to shareholders on 27th November 2002. The figures
for 2001 have been abridged from the audited statutory accounts for that year
which have been delivered to the Registrar of Companies. The reports of the
auditor on the statutory accounts were unqualified. Further copies of the
accounts are available from the Company's registered office at SWP Group Plc,
4th Floor, Bedford House, 3 Bedford Street, London WC2E 9HD.
For further information or enquiries please contact:
J. A. F. Walker
Director of Finance
Telephone: 020 7379 7181
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR BLBDBXUDGGDU
1 Year SWP Group Chart |
1 Month SWP Group Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
