![](/cdn/assets/images/search/clock.png)
We could not find any results for:
Make sure your spelling is correct or try broadening your search.
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 |
RNS Number:7527G SWP Group PLC 22 December 2004 SWP Group PLC Preliminary results for the year ended 30 June 2004 CHAIRMAN'S STATEMENT Corporate Review The year which ended on 30 June 2004 produced the worst result in your Company's history. Problems at Fullflow Group, our largest subsidiary, proved to be even more deep-seated and serious than we first realised and their dramatic slide from a position of reasonable profitability into one of large-scale losses had a major impact on the Group's overall performance. As we go on to describe below we have addressed this situation by initiating major changes to Fullflow's organisation and strategy and we believe that these will have a very positive effect in terms of revitalising the business, restoring staff morale and, most importantly, returning the company to the twin tracks of growth and profitability from which it was derailed. Elsewhere there was further disappointment at DRC and a less than impressive result at Crescent. Both these businesses are capable of producing much better results and their management teams are very much aware of the need for them to deliver improvement. The fund-raising exercise which we undertook in May produced in broad terms the outcome which we were seeking and we are pleased to welcome a number of new shareholders to our register. We thank them, and also those existing shareholders who subscribed to the Open Offer, for their support. The influx of new equity meant that despite the large loss which we are reporting for the year our balance sheet at the year-end showed an improvement compared to the previous year. Results For the year to 30 June 2004 the Group recorded an overall loss of #2,717,000 (2003: #714,000 loss) on sales of #15,006,000 (2003: #18,359,000). At the operating level an underlying loss of #1,816,000 was incurred (2003: #52,000 profit) and exceptional operating costs added a further #292,000 to this figure (2003: #225,000). As debt continued to rise and interest rates rebounded from the lows touched during the year, finance costs rose to #612,000 (2003: #544,000). Review of Operations The Group continues to operate through three principal subsidiaries each of which is a supplier of specialist products to the construction industry. Fullflow Group, which is based in Sheffield and has subsidiary operations in Paris, Madrid and Rotherham, designs, manufactures and installs rainwater management systems with a particular emphasis on syphonic roof drainage systems for large buildings. Through its Rotherham operation it also manufactures and distributes pipework fittings and fabrications to a wide range of customers operating mainly in the gas, water and petrochemical industries. Crescent of Cambridge is based in St Ives, Cambridgeshire and is the UK's leading manufacturer of spiral and other specialist steel staircases. DRC Polymer Products, which is also based in Cambridgeshire, produces polymer-based sheet materials for use in structural waterproofing applications and other more specialist markets such as fireproofing and soundproofing. Fullflow Group As reported above the year under review produced a sharp reversal in Fullflow's fortunes. In previous statements to shareholders we have consistently extolled the virtues of this business and over the years we had been happy to grant considerable autonomy to the Company's management team led by the Company's founder and erstwhile SWP Group Director, John Smith: we now know that we allowed this situation to prevail for longer than we should have done. In retrospect the problems are all too easy to identify - the pursuit of too many major development projects at the same time, a management team which became too thinly spread and the assembly of a series of overhead structures predicated on anticipated sales levels which failed to materialise. These basic problems were exacerbated by poor strategic decision-making, too many personnel changes at senior level and some personal difficulties experienced by John Smith himself. The consequences speak for themselves: despite the continuing benefit of the huge Madrid Airport project Fullflow Group sales actually fell by some 25%. At the same time, however, the cost base continued to rise until it became clear that the Group's finances could not sustain any further pressure. Action was then initiated in the form of a major overhead reduction programme which continues even now as more and more cost is taken out of the business. As is often the case this was a difficult process: towards the end of the financial year John Smith felt it appropriate to tender his resignation and it was agreed that he should leave more or less immediately. Group Director Alan Smith (no relation) assumed the position of Fullflow Group Managing Director and he will continue in this role for the foreseeable future. He has had many years experience of running a similar business in the construction industry and we are confident in his ability to bring focus and control to Fullflow's activities. A number of significant changes have already been implemented and there is growing evidence to suggest that the business can be restored to profitability without the need for further radical change. In the UK syphonic business, small projects are being eschewed in favour of larger ones which provide the scope for greater efficiency and productivity. Although the market is now more competitive than ever, Fullflow's experience, flexibility and technical expertise give it a head's start, particularly on more complex roof designs, and the Company remains the only one in the UK with independent system accreditation and quality assurance. Fullflow continues to enjoy the confidence of the country's leading architects, consultants and contractors and is currently working on projects such as Heathrow Terminal 5, the refurbishment of St Pancras Main Line Station, and the redevelopment of the Vauxhall End at the Oval. These projects sit along side the bread-and-butter work of distribution warehouses, factories, hotels and offices which provide the bulk of Fullflow's business. Since the end of August order intake levels have been strong and these should underpin higher levels of turnover in the coming months. In addition there are some very high profile projects in the pipeline and we hope to be in a position to comment on these in our 2004/5 interim report. In France sales increased for the fourth year running to stand at just less than #3 million. Fullflow is already perceived to be a leading player in the French market and has increased its share at the expense of some of the larger, more established suppliers who are not in a position to provide the turnkey service which is such an important feature of Fullflow's offer. A new General Manager has been appointed from within the French business to provide local leadership and we are confident that he and his team have the energy, commitment and ability to build on what has been achieved so far. In Spain the management team has continued to attempt to use the publicity generated by the Company's involvement in the construction of the huge new terminal at Madrid Airport to create a broad business base throughout the country. Over the last year enquiry levels have increased significantly and while order intake has been somewhat disappointing there is now positive evidence that this situation is likely to change. The concept of syphonic roof drainage systems is not nearly as well developed in Spain as it is in France and the UK and gravity systems continue to be our biggest competitor. However there is now much more interest on the part of architects and developers than previously and we are attempting to exploit this trend both directly and through a recently established network of sales agents. As in France a new General Manager has recently been appointed from within the existing management team and we are confident in his ability to provide the level of energy and leadership required if a new business is to flourish. As with the UK there are some very significant projects in the pipeline and if at least a few of these can be converted into orders, the operation ought to achieve profitability. Plasflow, Fullflow's Rotherham-based fittings and fabrications operation, had another disappointing year, with sales to third parties falling well below expectations. At least part of the problem here can be attributed to the frequent changes which have occurred in the composition of the sales team and we have addressed this issue by appointing a highly experienced individual to the position of Sales Manager. His efforts are being focused very clearly on the markets for which the business was set up in the first place and we are optimistic that in due course sales will build towards the levels which were used to justify the sizeable investment which we have made in this business. For Fullflow Group as a whole there is no doubt that the problems of the past year have represented a chastening experience but there remains a real belief that, following the various changes which have been implemented, the underlying quality of the business will resurface and deliver the sort of results which have been achieved in the past. Crescent of Cambridge Crescent experienced another year of relative disappointment albeit that it was the only one of the Group's subsidiaries to register a profit. Competition continued to affect the company's ability to achieve its targeted sales levels and this situation was compounded by the surge in steel prices which led to a squeeze in margins. The net result was that sales ended up around 5% lower than the record level attained in the previous year and although operating profit did show an increase it nevertheless fell well short of budget. The challenge for Crescent's management team is to break out of the #3-4 million sales range in which it has been operating for some years and if they can find a way of doing this the Group will reap a significant benefit in the form of increased profits. In this context a number of initiatives and plans are being appraised and it is encouraging to report that Crescent has been selected to supply a major multi-site Ministry of Defence project which is expected to run for a number of years. The company has also achieved some progress in the market for helical (sweeping) staircases and is currently engaged in the installation of the largest such staircase it has ever produced. On this and many other projects the new machinery which was commissioned during the previous financial year has really started to prove its worth and this augurs well for the future. DRC Polymer Products The year under review was a mixed one for DRC. In terms of results there was further disappointment: turnover fell, albeit by a small amount, and this meant that another sizeable loss was recorded, although once again the loss was lower than for the previous year. Of particular disappointment was the lack of progress achieved in sales of the soundproofing material which we have highlighted in previous reports. Given the potential which this product appears to have we are at a loss to understand why sales have not accelerated as projected but since we are two steps removed from the prospective customer base it is not easy for us to obtain comprehensive feedback. On the other hand there were a number of positive developments on the new business front. Following discussions with the proprietors of a similar business located on the same industrial estate, DRC have assumed responsibility for the production of a material used for tanking to underground concrete structures. This product is well established in a number of international markets and after a slow start sales have accelerated rapidly in recent months. DRC's role is essentially one of labour and management, with the raw materials being provided on a free-issue basis and ownership of the machinery and premises continuing to vest in the customer. This novel arrangement appears to operate successfully for both parties. DRC has also been instrumental in the development of a new material targeted at the water industry. This product features an in-built leak detection capability and appears to have considerable potential for reservoir roofs in particular where it offers a significant cost advantage compared to alternative solutions. Final testing is under way and all being well we hope that in an order for at least one project will follow almost immediately. DRC is also involved in the development of two other new products aimed at the commercial and industrial roofing markets and if either of these achieves the sales levels which have been discussed during the development phase the impact on DRC's top and bottom lines could be significant. We anticipate that when we next report to shareholders we will be in a position to provide much more detailed commentary on these initiatives. Finance As mentioned in the Corporate Overview, the Open Offer which we implemented in May provided an acceptable result in terms of funds raised. New equity subscriptions amounted to #3,091,000 net of expenses. These funds have been instrumental in enabling the Group to survive the impact of the losses detailed above. In addition, and in line with the terms of the underwriting agreement, a further #1,344,000 of shareholder loans were capitalised at the Open Offer Price. The effect of this transaction is that the Group's debts were reduced but that the total share of the Concert Party, as defined within the Open Offer document, in the Company increased to 47.43%. At 30 June, with the proceeds of the Open Offer having been received, net bank debt amounted to #5,524,000 although this level has since increased as we have settled certain creditors who had agreed to accept payment by instalment. As part of our efforts to stabilise the Group's position each of the Group's Directors (including the Chairman elect) has agreed to a salary waiver. This arrangement came into effect at the end of May and will continue until the Group is making sustainable net profit after all costs including interest. We have also placed a deferral notice on all capital expenditure throughout the Group. Where appropriate company vehicles and computers will be replaced but no new expenditure of any significance will be approved unless it relates to a Health and Safety requirement. Litigation The litigation referred to in last year's Report and Accounts was settled substantially in the Group's favour. More recently, having issued proceedings against one of the professional advisers employed in relation to the DRC acquisition, the Group has agreed to settle its claims through a process of mediation which resulted in an agreement that compensation be paid to the Group in the sum of #420,000. These monies will be treated as "exceptional proceeds" in the accounts to 30 June 2005. The proceeds which have now been received and will be used to pay down debt and for working capital purposes as the Group expands into 2005. No other litigation of a material nature is either in process or planned. Employees The Group's greatest asset is its employees and we thank them on your behalf for their commitment, resourcefulness and energy. Wherever possible it is our policy to promote from within and provide career enhancing opportunities to those who are ready and willing to accept the challenges involved. Current Trading Trading in the first four months of the new financial year has been broadly in line with expectations. The losses at Fullflow have been reduced and both Crescent and DRC are within relatively close reach of their targets. Even so the Group continues to register losses, largely as a result of the cost of servicing our debt levels which remain higher than we would like. Future Prospects As a Board we have to accept that in previous years hindsight has shown expected prospects have not been achieved although every opinion we have expressed has represented an entirely honest appraisal of the future as we saw it. As we look to the future now, we start from a position where, if nothing else, the Group's overhead costs are much more in line with current business levels meaning that if we can generate sales growth the Group will move into profit. In relation to Fullflow we continue to believe that real potential for growth does exist. In addition to the opportunities available to the company in the markets where it is already established further possibilities are emerging elsewhere in Europe and also in Asia. It is as yet too early for us to offer any considered view as to what Fullflow can achieve in these areas but we will certainly be looking to exploit all situations which offer a real prospect of profitable growth without undue risk. There are also genuine reasons to believe that growth can be achieved at DRC . Their development pipeline is as exciting as at any time in the past five years and the signs are that sales in the second half of the financial year will be well beyond the break even level. Hopefully that will represent not just a turning point in the company's history but also the start of a period of steady expansion and success. For Crescent growth may prove to be more elusive. The company is already the market leader in its chosen area of business and although it may be possible for the company to increase its market share either by extending its sales reach or through more competitive pricing it would be unrealistic to expect Crescent to grow exponentially. What we can expect is that the management team will continue to drive efficiency improvements and thereby produce an enhanced profit stream and a strong positive cash flow. Overall therefore we feel able to say that the Group is at least reasonably well placed to put the disappointments of previous years behind it and produce sustainable profits. Overhead costs are under control and the focus in each of our businesses is on revenue growth. The future of the Group will be shaped by the success which we achieve in this area. Board of Directors It is now some considerable time since I announced my intention to retire as Chairman of the Group and at the forthcoming AGM it is my intention to pass the reins of office to Mr. Francis (Frank) Bell who is by some margin the Group's largest shareholder. I know Frank will make a positive contribution to the Group's future. He has achieved much in his business career and will bring new impetus towards the Group's drive to profitability. I have been disappointed that my own tenure as Chairman has coincided with such a poor trading performance but I am in no doubt that in terms of strategy, organisation, risk awareness and financial control the Group is in a considerably better position than it was when I was invited to take the Chair some six years ago. I wish the Group and its employees every success in the future. R M Muddimer Chairman Consolidated Profit and Loss Account Year ended 30 June 2004 2004 2003 Notes #'000 #'000 Turnover 2 15,006 18,359 Cost of sales (9,806) (10,830) -------- -------- Gross profit 5,200 7,529 ------------------------------------------------------------------------------- Administrative expenses before exceptional items (7,016) (7,477) Exceptional items (292) (225) ------------------------------------------------------------------------------- Total administrative expenses (7,308) (7,702) -------- -------- ------------------------------------------------------------------------------- Operating loss before exceptional items (1,816) 52 Exceptional items 3 (292) (225) ------------------------------------------------------------------------------- Total operating loss (2,108) (173) Interest receivable 3 3 Interest payable and similar charges (612) (544) -------- -------- Loss on ordinary activities before taxation 2 (2,717) (714) Taxation on loss on ordinary activities - - -------- -------- Loss on ordinary activities after taxation being loss for the financial year (2,717) (714) ======== ======== Basic loss per share (pence) 4 (0.70)p (0.21)p ======== ======== Diluted loss per share (pence) 4 (0.70)p (0.21)p ======== ======== The results are wholly derived from continuing operations in both years. Statement of Total Recognised Gains and Losses Year ended 30 June 2004 The Group 2004 2003 #'000 #'000 Loss for the financial year (2,717) (714) Revaluation of fixed assets - 184 -------- -------- Total losses recognised since last annual report (2,717) (530) -------- -------- Note of Historical Cost Profit and Losses ------------------------------------------------------------------------------- Year ended 30 June 2004 2004 2003 The Group #'000 #'000 Loss on ordinary activities before taxation (2,717) (714) Difference between a historical cost depreciation charge and the actual depreciation charge of the year calculated on the revalued amount 20 17 -------- -------- Historical cost loss on ordinary activities before taxation (2,697) (697) ======== ======== Historical cost loss for the financial year (2,697) (697) ======== ======== Reconciliation of Movements in Shareholders' Funds Year ended 30 June 2004 The Group 2004 2003 #'000 #'000 Loss for the financial year (2,717) (714) Revaluation of fixed assets - 184 New share capital subscribed, net of expenses 3,091 - -------- -------- Net increase/(decrease) to shareholders' funds 374 (530) Opening shareholders' funds 183 713 -------- -------- Closing shareholders' funds 557 183 -------- -------- Consolidated Balance Sheet At 30 June 2004 2004 2003 #'000 #'000 #'000 #'000 Fixed assets Intangible assets 27 29 Tangible assets 3,906 4,412 -------- -------- 3,933 4,441 Current assets Stocks 2,731 2,644 ------------------------------------------------------------------------------- Debtors falling due within one year 4,766 5,275 Debtors falling due after more than one year 249 199 ------------------------------------------------------------------------------- Total debtors 5,015 5,474 -------- -------- 7,746 8,118 Creditors: amounts falling due within one year (7,888) (9,653) -------- -------- Net current liabilities (142) (1,535) -------- -------- Total assets less current liabilities 3,791 2,906 ======== ======== Financed by: 3,437 2,926 Creditors: amounts falling due after more than one year Provision for liabilities and charges (203) (203) Capital and reserves Called up share capital 79 6,827 Share premium account 11,134 1,295 Capital reserve 41 41 Revaluation reserve 671 691 Profit and loss account (11,368) (8,671) -------- -------- Equity shareholders' funds 557 183 -------- -------- 3,791 2,906 ======== ======== The financial statements were approved by the Board of Directors on 21 December 2004 and were signed on its behalf by J.A.F. Walker Director of Finance Consolidated Cash Flow Statement Year ended 30 June 2004 2004 2003 Notes #'000 #'000 #'000 #'000 Net cash (outflow)/inflow from operating activities 5(a) (224) 503 Returns on investments and servicing of finance Interest received 3 3 Bank and loan interest paid (487) (433) Hire purchase interest (51) (72) ------- ------- (535) (502) Capital expenditure and financial investment Payments to acquire tangible fixed assets (179) (349) Payments to acquire intangible fixed assets (13) (2) Receipts from sales of tangible fixed assets 144 14 ------- ------- (48) (337) ------- ------- Net cash outflow before financing (807) (336) Financing Issue of ordinary share capital net of expenses 3,091 - Bank loans received 129 - Bank loan repayments (250) (500) Other loan repayments (1,046) - Capital element of finance lease and hire purchase payments (327) (350) ------- ------- 1,597 (850) ------- ------- Increase/(decrease) in cash after financing 5(b) 790 (1,186) ======= ======= Parent Company's Balance Sheet At 30 June 2004 2004 2003 #'000 #'000 #'000 #'000 Fixed assets Tangible assets 625 630 Investments 8,151 9,653 -------- -------- 8,776 10,283 Current assets Debtors 6,712 6,382 Creditors: amounts falling due within one year (3,678) (6,229) -------- -------- Net current assets 3,034 153 -------- -------- Total assets less current liabilities 11,810 10,436 -------- -------- Financed by: 2,925 2,250 Creditors: amounts falling due after more than one year Capital and reserves Called up share capital 79 6,827 Share premium account 11,134 1,295 Profit and loss account (2,328) 64 -------- -------- Equity shareholders' funds 8,885 8,186 -------- -------- 11,810 10,436 ======== ======== The financial statements were approved by the Board of Directors on 21 December 2004 and signed on its behalf by J.A.F. Walker Director of Finance Notes to the Financial Statements 1. ACCOUNTING POLICIES The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the Group's financial statements. Basis of preparation The financial statements have been prepared in accordance with applicable accounting standards and under the historical cost accounting rules modified to include the revaluation of certain fixed assets. 2. 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: 2004 2003 Profit/ Profit/ (loss) (loss) Turn- before Net Turn- before Net over taxation assets over taxation assets #'000 #'000 #'000 #'000 #'000 #'000 Syphonic drainage 8,809 (1,535) (646) 11,843 362 1,539 Staircases 3,632 94 1,240 3,838 66 1,718 Polymer sheet 2,565 (252) 55 2,678 (272) (115) materials ------- -------- ------- ------- ------- ------- 15,006 (1,693) 649 18,359 156 3,142 ------- ------- Operating exceptional costs (292) (225) Other charges/ liabil (123) (92) (104) (2,959) ities -------- ------- Loss before interest (2,108) (173) Net interest payable (609) (541) -------- ------- Loss before taxation (2,717) (714) -------- ------- ------- ------- Total net assets 557 183 ======= ======= The Group operates predominantly within the United Kingdom. The geographical analysis of the Group's turnover by destination is as follows:- 2004 2003 #'000 #'000 United Kingdom 10,019 13,793 Europe 4,848 4,540 North America 72 - Far East 45 - Africa and Middle East 22 26 ---------- ---------- 15,006 18,359 ---------- ---------- 3. EXCEPTIONAL ITEMS Exceptional items comprise the following: 2004 2003 #'000 #'000 Direct costs and legal expenses in respect of the litigation 96 172 with the principal vendor of DRC Holdings Ltd Provision against debt assigned from subsidiary company now - 53 divested Rationalisation costs in respect of Fullflow's activities in 142 - UK, France and Spain Legal costs in respect of termination of agency 54 - agreement ------- ------- 292 225 ======= ======= Included within 2003 costs is #72,000 for non-audit services relating to forensic services. 4. LOSS PER SHARE The loss per share calculation for the year ended 30 June 2004 is based on the weighted average of 386,523,706 (2003: 341,319,198) ordinary shares in issue during the year and the loss of #2,717,000 (2003: loss of #714,000). The company's share options are not dilutive for loss per share calculations. 5. NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT (a) Reconciliation of operating profit to net cash (outflow)/inflow from operating activities 2004 2003 #'000 #'000 Operating loss (2,108) (173) Depreciation charges 569 583 Amortisation of trade names and patents 15 15 Loss/(profit) on sale of tangible fixed assets 8 (11) (Increase)/decrease in stocks (87) 14 Decrease/(increase) in debtors 459 (872) Increase in creditors 920 947 -------- ------- (224) 503 ======== ======= (b) Reconciliation of net cash flow to movement in net debt 2004 2003 #'000 #'000 Increase/(decrease) in cash in period 790 (1,186) Cash outflow from increase in debt and lease financing 448 850 ------- ------- Change in net debt resulting from cash flows 1,238 (336) New finance leases (36) (756) ------- ------- Movement in net debt in period 1,202 (1,092) Net debt at 30 June 2003 (7,158) (6,066) ------- ------- Net debt at 30 June 2004 (5,956) (7,158) ======= ======= (c) Analysis of net debt At At 30 June Cash Non cash 30 June 2003 Flow changes 2004 #'000 #'000 #'000 #'000 Overdrafts (2,935) 790 - (2,145) Debt due within one year (1,000) 871 - (129) Debt due after one year (2,500) (750) - (3,250) Finance leases and hire (723) 327 (36) (432) purchase ------- ------- -------- -------- Total (7,158) 1,238 (36) (5,956) ======= ======= ======== ======== The 2004 figures have been abridged from the audited statutory accounts for the year which will be posted to shareholders on 23rd December 2004. The figures for 2003 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 Tel: 020 7379 7181 This information is provided by RNS The company news service from the London Stock Exchange END FR BUBDDCXDGGSD
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