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| 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 |
From Jul 2019 to Jul 2024
TIDMSWP
RNS Number : 0009A
SWP Group PLC
26 March 2012
SWP Group plc (the "Group")
Half Yearly Results
for the six months ended 31 December 2011
Chairman's Statement
Corporate Review
At the Group's Annual General Meeting on 10(th) January 2012 convened to consider and approve the results for the year to 30(th) June 2011 I highlighted the fact that the Group's activities are largely project dependent and as such we were experiencing periods of low as well as high activity levels due to the timing of product installations over which we have no direct control.
Central to our sales programme for the current year at Ulva was phase II of a large international project for a major oil company where we had successfully completed material supply to phase I back in 2008. Regrettably, due to the expansion of this large project Ulva's role as the specified supplier of materials to reduce Corrosion Under Insulation ("CUI") has been delayed until at least 2014. Whilst this is very frustrating for our Ulva team and is having a very significant impact on Ulva's profits this year there is some comfort that this project is destined to increase in volume terms when the installation gets underway as Ulvashield is specified by name. The supply of material has not been lost but merely deferred until 2014 and beyond when it will once again feature prominently as an important constituent of Ulva's sale programme at that time. In the meantime Ulva continues to be awarded new major projects on an ongoing basis and prospects remain good.
Financial Results
The results for the six month period under review to 31(st) December 2011 can only be described as disappointing. The economic difficulties faced in our key markets have been widely recognised in the media and have translated into reduced sales, intense competition on pricing as well as muted demand as infrastructure projects are either postponed or cancelled as a result of caution on the part of investors or funding problems due to the banking crisis. Sales in the period have fallen to GBP9,006,000 (2010 GBP12,702,000) partly due to the project delay at Ulva referred to above but also low demand in Fullflow UK, France and Spain where market conditions have deteriorated further. Operating profits amount to GBP164,000 (2010 GBP1,429,000) before exceptional expenses and the amortisation of acquired intangible assets. Losses before taxation amount to GBP81,000 as compared to profits of GBP1,154,000 for the comparable period of 2010.
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Unaudited Unaudited
six months six months
ended 31.12.11 ended 31.12.10
GBP'000 GBP'000
Revenue 9,006 12,702
Operating profit before exceptional
costs and amortisation of intangible
assets 164 1,429
(Loss)/profit before tax (81) 1,154
Taxation - 313
(Loss)/profit after tax (81) 841
Earnings per share (0.04p) 0.42p (Note 1)
Note 1. The calculation of earnings per share in respect of the six month period to 31 December 2010 has been restated to take account of the bonus issue declared in 2011 of 10 new ordinary shares for every ordinary share held in the Group ranking pari passu.
These results reflect the interim period between the completion of international projects by Ulva and the commencement of new projects under specification in March 2012. Pleasingly, the results at Crescent are much improved with a welcome return to profit and a significant increase in the profitability at Plasflow where we are a committed supplier to most of the nuclear installations in the UK. The increase in profitability at both these businesses is likely to continue for the remainder of this financial year.
Operational Highlights
Fullflow
The economic climate has not been conducive to the vibrancy of the construction industry where Fullflow is traditionally active. Our markets in Continental Europe have, like the UK, struggled as a consequence of low demand, competitive pressures and a dearth of large scale infrastructure projects where Fullflow tends to thrive.
Having taken steps to eliminate operating costs from the business back in 2010 Fullflow is in a strong position to respond to any improvement in market conditions. Following the recruitment of a new Fullflow Group Managing Director in November 2011 there has been further significant progress in terms of process controls, contract reviews and the management of risks within our entire European business model.
A considerable amount of work has been undertaken to maintain and improve operating margins within the business and focus is now being directed towards efficiencies on site. A series of product development initiatives is currently being researched as part of Fullflow's programme of continuous improvement to both customer service and product offering.
Of most importance within the entire Fullflow organisation, which is now benefitting from improved leadership, is a focused sales and marketing strategy in each of Fullflow's territories designed to improve sales penetration across the board. As a market leader, Fullflow is in an ideal position to innovate and work cohesively with a number of key customers on a project by project basis built on a mutual respect and recognition of what each party expects to derive from such beneficial relationships.
At Plasflow considerable progress has been made with this state of the art supplier to not only the water utility companies but also most of the nuclear installations which operate in the United Kingdom. For Health and Safety reasons, maintenance is an increasingly important driver within the UK and worldwide nuclear industry and Plasflow plays a pivotal role in finding technical solutions to the many engineering challenges which the nuclear plants encounter on a regular if not continuous basis.
Plasflow is on course to record its most profitable result in this financial year and with a strong order book there is every reason to expect this momentum to continue into 2013 and beyond.
Polymer Membrane Division
Ulva
As explained above the activity level for Ulva in this six month period has been below par purely and simply due to gaps between the conclusion and commencement of international projects. A greater level of transparency allied to the award of further nominated specifications by multinational oil and gas companies provides confidence that we are very much on the correct path to success. The number of multinational oil and gas companies who specify Ulva has and continues to grow as they recognise the technical benefits of using the Ulva system backed by a service package designed to ensure that the installed product fulfills customer expectations. This is designed with one aim in mind which is the extension of the useful operating life of the client's installed pipework. Ulva is in the process of expanding its international reach into new countries where on and offshore development features prominently.
DRC
Production of Ulva continues to be undertaken at DRC from where we also sell the Hylam range of polymer based products. We have significant spare capacity and will be able to respond to increased project activity from Ulva's international client base. Management has experienced a number of production difficulties arising from the demonstrable failure of an equipment supplier to install equipment in conformity with an agreed specification. This has called for creative solutions to maintain continuity of supply of our products albeit at increased cost. Plans are now at an advanced stage to procure permanent solutions to what has been a source of considerable inconvenience over an extended period of time.
Hylam Uniroof
In the period since the withdrawal of DuPont from the manufacture of Hypalon, with the resulting increase in the cost of our base material, CSPE, of 140% DRC had been attempting to develop an alternative lower cost mineral paper backed roofing membrane. Despite its best efforts, DRC has been unable to develop a product which aspires to DRC's quality standards. The modular build market, into which the product is supplied, albeit a declining market, is in most instances unable to bear the increased cost associated with the CSPE based product with the consequence that whilst DRC remains active in this market, volumes are now substantially reduced.
Hylam IQ
The spend by water utilities in the AMP5 period to date has been considerably lower than projected. Additionally, there has been evidence that with certain customers and competitors, DRC has not been competing on a level playing field. As a consequence Hylam IQ activity is at this time restricted.
Hylam FPA
The Drinking Water Inspectorate (DWI) approved product continues to enjoy good demand in potable water applications for tank lining and baffle curtains in service reservoirs. This niche product enjoys demand both in the UK and further afield in applications based in the Middle East.
Crescent
Crescent has endured extremely difficult market conditions over the past three years. In anticipation of the downturn in the construction sector and the consequential impact on the demand for steel stairs costs were significantly reduced so as to manage risk and improve the operational gearing of the business as markets begin to show signs of recovery. Whilst it has to be said that there are no perceptible signs of improvement in market conditions as a whole Crescent, under new leadership, has improved its performance considerably and has been restored to profit during the six months under review.
The management at Crescent has shown considerable skill and adaptability in facing the challenges in a market that is characterized by the demise of competitors as well as margin pressures arising from unrealistic pricing on the part of competitors chasing business at all cost. This is not a route which Crescent intends to follow. Further progress in terms of profitability is anticipated in the second half of this financial year and Crescent's prime focus will be in strengthening its sales and marketing initiatives in order to win market share within its targeted fields of broadening expertise.
Staff
In common with many Groups facing difficult challenges in market conditions which remain subdued the Board of SWP recognises the considerable amount of effort that has been, and continues to be, expended in the further development of the Group here in the UK and also abroad. We express our gratitude to all employees who remain dedicated to the delivery of our strategy which remains firmly in place for the future.
Current Trading and Prospects
The current financial year as a whole is destined to be one of disappointment as our two principal brands namely Fullflow and Ulva mark time in conditions which are not conducive to project led businesses which depend on levels of confidence and economic prosperity. In the case of Fullflow we need to see signs of economic growth which in turn lead to a return to public spending and available funding for infrastructure projects. On the other hand Ulva's trading pattern is fortunately very different and, notwithstanding the economic difficulties, Ulva's opportunities continue to excite as the pipeline of future international projects where Ulvashield is specified increases month on month. Specifications from the oil and gas majors remain at encouraging levels.
Strategically our focus has always been fixed very firmly on the achievement of medium to long-term growth and while we do not expect either the general economic environment or conditions in our specific markets to exhibit much improvement in the short term we remain confident that the plans we have for the future ongoing organic development of the Group are those which will deliver profitable growth for shareholders over time.
J A F Walker
Chairman
Unaudited Consolidated Statement of Comprehensive Income
Six months Six months Year
ended 31.12.11 ended 31.12.10 ended
Unaudited Unaudited 30.06.11
GBP'000 GBP'000 Audited
GBP'000
Revenue Note 1 9,006 12,702 24,526
Cost of sales (5,410) (7,692) (14,913)
---------------- ---------------- ----------
Gross profit 3,596 5,010 9,613
Operating expenses (3,413) (3,581) (7,572)
---------------- ---------------- ----------
183 1,429 2,041
Exceptional operating expenses (20) (66) (287)
Amortisation of intangible
assets acquired through business
combinations net of deferred
tax (82) (83) (165)
Share based payment (19) - (38)
---------------- ---------------- ----------
Operating profit before royalty 62 1,280 1,551
Royalty - - (701)
---------------- ---------------- ----------
Operating profit 62 1,280 850
Financial income - - 16
Financial costs (143) (126) (318)
---------------- ---------------- ----------
(Loss)/profit on ordinary
activities before taxation (81) 1,154 548
Income tax charge - (313) (78)
---------------- ---------------- ----------
(Loss)/profit for the period (81) 841 470
---------------- ---------------- ----------
Total comprehensive income
Profit for the period and
total comprehensive income
attributable to equity holders
of the company (81) 841 470
---------------- ---------------- ----------
Basic earnings per share (pence)
Note 2 (0.04)p 0.42p 0.24p
---------------- ---------------- ----------
Diluted earnings per share
(pence) (0.04)p 0.41p 0.24p
---------------- ---------------- ----------
Note 1 Turnover and operating profit all derive from continuing operations.
Note 2. The calculation of earnings per share in respect of the six month period to 31 December 2010 has been restated to take account of the bonus issue declared in 2011 of 10 new ordinary shares for every ordinary share held in the Group ranking pari passu.
Unaudited Consolidated Statement of Changes in Equity
Called Share Capital Re-valuation Retained Total
up share premium reserve reserve earnings
capital account
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2010 92 13,205 41 229 305 13,872
Result for the
period - - - - 824 824
Bonus issue 924 (924) - - - -
Capital reorganisation - (12,281) - - 12,281 -
Purchase of treasury
shares - - - - (154) (154)
---------- --------- --------- ------------- ---------- --------
At 30 June 2010 1,016 - 41 229 13,256 14,542
Result for the
period - - - - 841 841
Share based payment - - 17 - - 17
Purchase of treasury
shares - - - - (152) (152)
---------- --------- --------- ------------- ---------- --------
At 31 December
2010 1,016 - 58 229 13,945 15,248
Result for the
period - - - - (371) (371)
Dividend - - - - (402) (402)
Share based payment - - 21 - - 21
Purchase of treasury
shares - - - - (36) (36)
---------- --------- --------- ------------- ---------- --------
At 30 June 2011 1,016 - 79 229 13,136 14,460
Result for the
period - - - - (81) (81)
Share based payment - - 19 - - 19
Purchase of treasury
shares - - - - (115) (115)
---------- --------- --------- ------------- ---------- --------
At 31 December
2011 1,016 - 98 229 12,940 14,283
---------- --------- --------- ------------- ---------- --------
Unaudited Consolidated Statement of Financial Position
As at As at As at
31.12.11 31.12.10 30.06.11
GBP'000 GBP'000 GBP'000
Non-current assets
Intangible assets 8,430 8,679 8,550
Property, plant and equipment 5,561 5,686 5,635
Trade and other receivables 557 513 587
Deferred tax assets 624 643 624
---------- ---------- ----------
15,172 15,521 15,396
---------- ---------- ----------
Current assets
Inventories and work in progress 3,624 4,338 3,795
Trade and other receivables 6,313 9,066 6,775
----------
9,937 13,404 10,570
---------- ---------- ----------
Total assets 25,109 28,925 25,966
---------- ---------- ----------
Current liabilities
Trade and other payables (3,969) (5,967) (5,046)
Current tax liabilities (153) (226) (189)
Obligations under finance leases (7) (27) (14)
Bank loans and overdrafts (1,455) (2,402) (1,408)
---------- ---------- ----------
(5,584) (8,622) (6,657)
---------- ---------- ----------
Non-current liabilities
Bank loans (2,916) (2,368) (2,488)
Deferred tax liabilities (2,326) (2,682) (2,361)
Obligations under finance leases - (5) -
---------- ---------- ----------
(5,242) (5,055) (4,849)
---------- ---------- ----------
Total liabilities (10,826) (13,677) (11,506)
---------- ---------- ----------
NET ASSETS 14,283 15,248 14,460
========== ========== ==========
Capital and reserve
Called up share capital 1,016 1,016 1,016
Capital reserve 98 58 79
Revaluation reserve 229 229 229
Retained earnings 12,940 13,945 13,136
---------- ---------- ----------
TOTAL EQUITY 14,283 15,248 14,460
========== ========== ==========
Unaudited Consolidated Statement of Cash Flows
Six months Six months Year ended
ended 31.12.11 ended 31.12.10 30.06.11
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Profit after tax (81) 841 470
Adjustments for:
Net finance costs 143 126 302
Corporation tax charge - 313 154
Depreciation of property, plant
and equipment 142 184 294
Amortisation of intangible assets 120 118 249
Profit on disposal of plant and
equipment - (2) (1)
---------------- ---------------- -----------
Operating cash flows before movement
in working capital 324 1,580 1,468
Decrease/(increase) in inventories
and work in progress 171 (646) (103)
Decrease in receivables 492 188 2,492
Decrease in payables (1,166) (1,150) (2,402)
Interest paid (126) (142) (321)
Interest received - - 16
Corporation tax paid (36) (207) (178)
---------------- ---------------- -----------
Net cash inflow from operating
activities (341) (377) 972
---------------- ---------------- -----------
Cash flow from investing activities
Investments - (25) (191)
Purchase of property, plant and
equipment (40) (114) -
Proceeds from disposals of property,
plant and equipment - 6 39
---------------- ---------------- -----------
Net cash outflow from investing
activities (40) (133) (152)
---------------- ---------------- -----------
Cash flow from financing activities
Dividend paid - (402)
Bank loans received - - 450
Bank loans repaid (664) (474) (659)
Purchase of treasury shares (115) (152) (188)
Finance lease repayments, net 21 (16) (34)
---------------- ---------------- -----------
Net cash outflow from financing
activities (758) (642) (833)
---------------- ---------------- -----------
Net increase in cash and bank
overdrafts (1,139) (1,152) (13)
Cash, cash equivalents and bank
overdrafts at
beginning of period (316) (303) (303)
---------------- ---------------- -----------
Cash, cash equivalents and bank
overdrafts at end of period (1,455) (1,455) (316)
================ ================ ===========
Notes to the Interim Report
1. Basis of Preparation
The Interim Financial Statements have been prepared using accounting policies consistent with International Financial Reporting Standards as adopted in the European Union and in accordance with International Accounting Standards (IAS) 34 Interim Financial Reporting.
The financial information for the six month periods ended 31 December 2011 and 31 December 2010 has not been audited by the Group's auditors and does not constitute accounts within the meaning of s240 of the Companies Act 2006. The financial information for the year ended 30 June 2011 is an abridged version of the Group's accounts which received an unqualified auditors' report and did not contain a statement under s237(2) or (3) of the Companies Act 2006 and have been filed with the Registrar of Companies.
The same accounting policies, presentation and methods of computation are followed in these interim financial statements as were applied in the preparation of the Group's financial statements for the year ended 30 June 2011 and which are expected to apply as at 30 June 2012.
2. Taxation
Interim period income tax is accrued based on the estimated average annual effective income tax rate.
3. Segmental Reporting
Rainwater Metal staircases Polymer Corporate Total
management six months membrane six months six
six months ended 31 six months ended 31 months ended
ended 31 Dec 2011 ended 31 Dec 2011 31 Dec 2011
Dec 2011 Dec 2011
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue
External revenues 5,312 980 2,714 - 9,006
Intergroup sales 591 - 344 - 935
------------ ----------------- ------------ ------------ --------------
Total revenues 5,903 980 3,058 - 9,941
Cost of sales (3,998) (630) (1,717) - (6,345)
------------ ----------------- ------------ ------------ --------------
Gross profit 1,905 350 1,341 - 3,596
Operating expenses (2,020) (294) (747) (352) (3,413)
------------ ----------------- ------------ ------------ --------------
(115) 56 594 (352) 183
Exceptional operating
expenses (10) (10) - - (20)
Amortisation of intangible
assets acquired through
business combinations
net of deferred tax - - - (82) (82)
Share Based Payment - - - (19) (19)
Intergroup royalty (charge)/income - - (369) 369 -
Intergroup management
fees - - (114) 114 -
Intergroup rent (charges)/income - - (36) 36 -
Operating (loss)/profit (125) 46 75 66 62
Financial income - - - - -
Financial costs (22) - (7) (114) (143)
Intergroup financial
charges (14) - (25) 39 -
------------ ----------------- ------------ ------------ --------------
(Loss)/profit on ordinary
activities before taxation (161) 46 43 (9) (81)
Income tax charge - - - - -
------------ ----------------- ------------ ------------ --------------
(Loss)/profit for the
period attributable
to equity holders of
the company (161) 46 43 (9) (81)
============ ================= ============ ============ ==============
Rainwater Metal staircases Polymer Corporate Total
management six months membrane six months six months
six months ended 31 six months ended ended 31
ended 31 Dec 2010 ended 31 31 Dec Dec 2010
Dec Dec 2010 2010
2010
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue
External revenues 7,792 957 3,953 - 12,702
Intergroup sales 1,294 - 305 - 1,599
------------ ----------------- ------------ ------------ ------------
Total revenues 9,086 957 4,258 - 14,301
Cost of sales (6,189) (788) (2,314) - (9,291)
------------ ----------------- ------------ ------------ ------------
Gross profit 2,897 169 1,944 - 5,010
Operating expenses (1,952) (370) (963) (296) (3,581)
------------ ----------------- ------------ ------------ ------------
945 (201) 981 (296) 1,429
Exceptional operating
expenses (19) - - (47) (66)
Amortisation of intangible
assets acquired through
business combinations
net of deferred tax - - - (83) (83)
Intergroup royalty (charge)/income - - (492) 492 -
Intergroup management
fees (151) (30) (44) 225 -
Intergroup rent (charges)/income - - (36) 36 -
Operating profit 775 (231) 409 327 1,280
Financial income -
Financial costs (14) - (19) (93) (126)
Intergroup financial
charges (14) - (26) 40 -
------------ ----------------- ------------ ------------ ------------
Profit/(loss) on ordinary
activities before taxation 747 (231) 364 274 1,154
Income tax (charge)/credit (189) 59 (92) (91) (313)
------------ ----------------- ------------ ------------ ------------
Profit/(loss) for the
year attributable to
equity holders of the
company 558 (172) 272 183 841
============ ================= ============ ============ ============
4. Income Tax Expense
Recognised in the income statement
Six months Six months Year
ended 31.12.11 ended 31.12.10 ended 30.06.11
Unaudited Unaudited Unaudited
GBP'000 GBP'000 GBP'000
Current tax expense
Current year - UK corporation
tax - 130 144
Current year - overseas
tax - 90 10
Deferred tax movement - 93 (76)
Total tax expense in income
statement - 313 78
----------------- ---------------- ----------------
5. Earnings Per Share
Earnings per share is calculated on the basis of 203,275,006 shares (2010: 198,305,006) which is the weighted average of the number of shares in issue during the period.
The diluted earnings per share is calculated on the basis of 191,980,006 shares (2010: 202,805,006) which is the weighted average of the number of shares in issue during the period.
6. Copies of Interim Report
Copies of the interim report are available to shareholders electronically via the Group's website or are available on request from the Group head office at Bedford House, 1 Regal Lane, Soham, Ely, Cambridgeshire, CB7 5BA or at http://www.swpgroupplc.com.
For further information or enquiries:
J.A.F Walker D.J Pett R. Kauffer Chairman Director of Finance Peel Hunt LLP
Nominated Adviser & Broker
Tel: 01353 723270 Tel: 01353 723270 Tel: 0207 418 8900 Mobile: 07800 951151 Mobile: 07940 523135
This information is provided by RNS
The company news service from the London Stock Exchange
END
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