Interim Results

RNS Number:5600A
SWP Group PLC
29 March 2006


                                 SWP Group PLC


                              Interim report 2005

                   for the six months ended 31 December 2005



Highlights


   * Sales for 6 months to 31st December 2005 up by 22% compared to last
     year.

   * Operating profits of #302,000 for 6 months to 31st December 2005
     compared to operating losses of #325,000 a year ago.

   * Order books in all three businesses at record levels with growth likely
     to be maintained.

   * Fully integrated management teams at Fullflow in the UK, Spain and
     France focused on top line growth and enhanced service delivery

   * Crescent of Cambridge has strengthened its market position as the UK's
     leading manufacture of spiral and straight steel staircases.

   * The successful introduction of DRC's patented leak detection system for
     use by the water utilities offers great potential for DRC's future growth
     aspirations.

   * Cost base very much under control and aligned to the assessed needs of
     each business.

   * Successful financial restructuring completed. Strong future cash flows
     in each business area should lead to rapid reduction of debt.

   * Group management anticipates strong growth in terms of sales and
     operating profits going forward.





"In recent years each of our businesses has had to wrestle with major problems
and challenges of one sort or another. Now, however, they are all well
positioned in their respective markets with clearly defined growth plans in
place and the dedicated management and resources with which to achieve them.


We look forward to reporting further significant progress later in the year."



Alan Walker
Chairman


Chairman's Statement


Results

As presaged in the Annual Report and Financial Statements published in December,
the first half of the new financial year witnessed a continuation of the
recovery programme which has been under way since the middle of 2004.
Accordingly we are pleased to report that on sales of #9,472,000 (2004:
#7,748,000) we recorded an operating profit of #302,000 which compares very
favourably with the operating loss of #335,000 which we reported in 2004. With
interest costs reducing slightly to #260,000 (2004: #273,000) the overall result
was a net profit of #42,000 (2004: #188,000 loss after exceptional items), the
first for some time.


Review of Operations

The most important feature of our results was the 22% increase which we achieved
in turnover. This significant rate of growth serves to demonstrate the momentum
which we are building throughout the Group and this is a trend which we expect
to continue. In each of our businesses the delivery of top line growth is the
single most important objective and we believe that there is plenty of
additional scope for us to exploit the opportunities which we have identified in
the markets which we serve.


Fullflow Group

Nowhere is this potential more evident than at Fullflow Group. Here progress was
achieved on all fronts, with the French and Spanish operations both delivering
sales growth in excess of 80% and Plasflow more than doubling its sales to third
parties. Even the UK syphonic business, which is the leading company in what is
an increasingly competitive market sector, managed to produce sales growth of
over 12%.


In each of the markets in which it operates, Fullflow is continuing to build a
reputation for professionalism, quality and reliability, and with developers,
architects, engineers and contractors continually striving to achieve design
efficiencies, programme acceleration and high quality standards from their
chosen specialist subcontractors, Fullflow is well placed to achieve further
growth. From time to time Fullflow will of course encounter an element of
price-based competition but in what is an increasingly fast-paced and
professional industry it is service levels and overall value which will be the
determinants of success and Fullflow will continue to focus hard on achieving
the highest possible standards in these areas, as well as further improvements
in process efficiencies and margin levels.


Fullflow is now a well-established, organized business with a clearly-defined
management structure, efficient systems and, most importantly, a team of young,
resourceful managers and we are in no doubt that they have the drive, and
commitment and ambition to take the company forward to the next level.


Crescent of Cambridge

The strong trading performance of this sector leader has continued throughout
the period with sales ahead by more than 8%. Operating profits were ahead of
budget expectations primarily due to higher margins which were derived partly
from improved production efficiencies and partly from reduced overheads
following the streamlining of the management structure within the business.

The Company has continued to increase its share of the market for straight
staircases where the sophistication of Crescent's CNC machines offers
substantial scope for achieving productivity gains.


The potential for further increases in activity levels remains very positive and
although price-based competition will continue to make it difficult to achieve
further margin improvement, there is every reason to believe that Crescent will
maintain and possibly even enhance its position as market leader.



DRC Polymer Products

Longstanding shareholders will be aware that ever since DRC was acquired by the
Group, it has struggled to achieve both critical mass and underlying
profitability.


However at long last there are definite signs that this situation is about to
change. In the six months to December sales exhibited an increase of nearly 5%
but based on what we now regard as the major potential of DRC's patented Hylam
IQ product we believe that the company is on the threshold of much more
significant success. Since its initial introduction to the market last year this
product has generated considerable interest on the part of specifiers in the
water industry and it is increasingly being seen as the most cost-effective
option for lining reservoir roofs. DRC's management is now intent on marketing
the product to a much wider audience both within the United Kingdom and abroad
and there is every reason for us to be confident that this process will create a
number of major new business income streams.


The remainder of DRC's core business is operating broadly in line with
expectations. Much of DRC's output is accounted for by a series of strategic
alliances where DRC's production and technical expertise is complemented by its
partners' sales and marketing reach in what can best be described as global
niche markets.


DRC has significant spare production capacity and is therefore well placed to
cope with the extra demand which we anticipate Hylam IQ will generate. Indeed if
this demand reaches the levels which we consider to be realistically achievable
the Company's prospects will be transformed.


Financial

Shareholders will be aware that in May 2004 we raised #3,091,000 net of expenses
by way of an open offer. Whilst this fund-raising exercise was essential for the
Group's survival our level of borrowing has remained at a higher level than we
believe is appropriate for a Group of our size. Last month, therefore, we
decided in to take advantage of the recent strength in our share price to raise
a further #750,000 net of expenses by way of a placing. The new shares were
subscribed for at a price of 60p per share compared to 37.5p in May 2004 and the
new equity will be used to reduce debt and fund the increased working capital
requirements associated with our planned expansion.


Current Trading

As is generally the case, trading in the second half of the year has begun on a
relatively quiet note with seasonal factors contributing to lower activity
levels. However across the Group order intake has continued to exhibit a
positive trend which augurs well for the period ahead.


Future Prospects

Whilst we are pleased by the recovery which we have managed to effect in the
Group's performance we believe that in each of our business areas there are
further significant opportunities for us to exploit.


Importantly we now have in place the management structures and systems which are
essential if growth is to be efficiently managed and our management teams
contain the right blend of experience, energy and ambition. At Group level we
were pleased to announce the appointment of Martin Bell and David Pett to the
Board and their collective initiative and experience will provide further
support to the implementation of our expansion plans.


Accordingly we believe that we are well placed to realise the potential which
exists throughout the Group and we look forward to reporting further significant
progress later in the year.


J.A.F. Walker
Chairman

28th March 2006





Consolidated Profit and Loss Account

Six months ended 31 December 2005



+-------------------------------------------+--------+--------+----------+
|                                           |     Six|     Six|Year ended|
|                                           |  months|  months|  30.06.05|
|                                           |   ended|   ended|          |
|                                           |31.12.05|31.12.04|          |
+-------------------------------------------+--------+--------+----------+
|                                           | #'000  | #'000  |   #'000  |
+-------------------------------------------+--------+--------+----------+
|                                           |        |        |          |
+-------------------------------------------+--------+--------+----------+
|Turnover                                   | 9,472  | 7,748  |  16,007  |
|                                           |--------|--------|  --------|
+-------------------------------------------+--------+--------+----------+
|                                           |        |        |          |
+-------------------------------------------+--------+--------+----------+
|Operating profit/(loss) before exceptional |   302  |  (335) |    (325) |
|items                                      |        |        |          |
|                                           |        |        |          |
+-------------------------------------------+--------+--------+----------+
|Net operating income - exceptional items   |     -  |   420  |     373  |
|                                           |--------|--------|  --------|
+-------------------------------------------+--------+--------+----------+
|Operating profit                           |   302  |    85  |      48  |
|                                           |        |        |          |
+-------------------------------------------+--------+--------+----------+
|                                           |        |        |          |
+-------------------------------------------+--------+--------+----------+
|Net interest payable and similar charges   |  (260) |  (273) |    (569) |
|                                           |--------|--------|  --------|
+-------------------------------------------+--------+--------+----------+
|                                           |        |        |          |
+-------------------------------------------+--------+--------+----------+
|Profit/(loss) on ordinary activities before|    42  |  (188) |    (521) |
|taxation                                   |        |        |          |
+-------------------------------------------+--------+--------+----------+
|Taxation                                   |     -  |     -  |       -  |
+-------------------------------------------+--------+--------+--------+-+
|                                           |        |        |        | |
|                                           |--------|--------|--------| |
+-------------------------------------------+--------+--------+--------+-+
|Retained profit/(loss)                     |    42  |  (188) |    (521) |
|                                           |--------|--------|  --------|
+-------------------------------------------+--------+--------+--------+-+
|Earnings/(loss) per share -basic           |  0.27p | (1.19)p| (3.30)p| |
|                                           |--------|--------|--------| |
+-------------------------------------------+--------+--------+--------+-+
|                              -diluted     |  0.27p | (1.19)p|   (3.30)p|
|                                           |--------|--------|  --------|
+-------------------------------------------+--------+--------+----------+
|                                           |        |        |          |
+-------------------------------------------+--------+--------+----------+



Consolidated Balance Sheet

As at 31 December 2005

+----------------------------------------------+--------+--------+--------+
|                                              |   As at|   As at|   As at|
|                                              |31.12.05|31.12.04|30.06.05|
+----------------------------------------------+--------+--------+--------+
|                                              | #'000  | #'000  | #'000  |
+----------------------------------------------+--------+--------+--------+
|                                              |        |        |        |
+----------------------------------------------+--------+--------+--------+
|Fixed assets                                  |        |        |        |
|                                              |        |        |        |
+----------------------------------------------+--------+--------+--------+
|Intangible assets                             |    19  |    25  |    19  |
+----------------------------------------------+--------+--------+--------+
|Tangible assets                               | 4,272  | 3,739  | 4,423  |
|                                              |--------|--------|--------|
+----------------------------------------------+--------+--------+--------+
|                                              | 4,291  | 3,764  | 4,442  |
|                                              |--------|--------|--------|
+----------------------------------------------+--------+--------+--------+
|                                              |        |        |        |
+----------------------------------------------+--------+--------+--------+
|Current assets                                |        |        |        |
|                                              |        |        |        |
+----------------------------------------------+--------+--------+--------+
|Stocks                                        | 2,783  | 2,668  | 2,829  |
+----------------------------------------------+--------+--------+--------+
|Debtors                                       | 5,423  | 5,348  | 5,819  |
|                                              |--------|--------|--------|
+----------------------------------------------+--------+--------+--------+
|                                              | 8,206  | 8,016  | 8,648  |
+----------------------------------------------+--------+--------+--------+
|                                              |        |        |        |
+----------------------------------------------+--------+--------+--------+
|Creditors: amounts falling due within one year|(8,521) |(8,259) |(9,123) |
|                                              |--------|--------|--------|
+----------------------------------------------+--------+--------+--------+
|Net current liabilities                       |  (315) |  (243) |  (475) |
|                                              |--------|--------|--------|
+----------------------------------------------+--------+--------+--------+
|Total assets less current liabilities         | 3,976  | 3,521  | 3,967  |
|                                              |--------|--------|--------|
+----------------------------------------------+--------+--------+--------+
|Creditors: amounts falling due after more than| 3,069  | 3,152  | 3,103  |
|one year                                      |--------|--------|--------|
+----------------------------------------------+--------+--------+--------+
|                                              |        |        |        |
+----------------------------------------------+--------+--------+--------+
|Capital and reserves                          |        |        |        |
|                                              |        |        |        |
+----------------------------------------------+--------+--------+--------+
|Called up share capital                       |    79  |    79  |    79  |
+----------------------------------------------+--------+--------+--------+
|Share premium account                         |11,134  |11,134  |11,134  |
+----------------------------------------------+--------+--------+--------+
|Capital reserve                               |    41  |    41  |    41  |
+----------------------------------------------+--------+--------+--------+
|Revaluation reserve                           | 1,479  |   671  | 1,479  |
+----------------------------------------------+--------+--------+--------+
|Profit and loss account                       |(11,826)|(11,556)|(11,869)|
|                                              |        |        |        |
|                                              |--------|--------|--------|
+----------------------------------------------+--------+--------+--------+
|                                              |   907  |   369  |   864  |
|                                              |--------|--------|--------|
+----------------------------------------------+--------+--------+--------+
|                                              |        |        |        |
+----------------------------------------------+--------+--------+--------+
|                                              | 3,976  | 3,521  | 3,967  |
|                                              |--------|--------|--------|
+----------------------------------------------+--------+--------+--------+
|                                              |        |        |        |
+----------------------------------------------+--------+--------+--------+



Consolidated Cash Flow Statement

Six months ended 31 December 2005



+---------------------------------------------+---------+---------+--------+
|                                             |      Six|      Six|    Year|
|                                             |   months|   months|   ended|
|                                             |    ended|    ended|30.06.05|
|                                             | 31.12.05| 31.12.04|        |
+---------------------------------------------+---------+---------+--------+
|                                             |  #'000  |  #'000  | #'000  |
+---------------------------------------------+---------+---------+--------+
|                                             |         |         |        |
+---------------------------------------------+---------+---------+--------+
|Net cash inflow/(outflow) from operating     |    468  |   (503) |  (614) |
|activities                                   | --------| --------|--------|
|                                             |         |         |        |
+---------------------------------------------+---------+---------+--------+
|                                             |         |         |        |
+---------------------------------------------+---------+---------+--------+
|Returns on investments and servicing of      |         |         |        |
|finance                                      |         |         |        |
+---------------------------------------------+---------+---------+--------+
|Net interest paid                            |   (231) |   (249) |  (474) |
+---------------------------------------------+---------+---------+--------+
|Hire purchase interest                       |    (16) |    (36) |   (37) |
|                                             | --------| --------|--------|
+---------------------------------------------+---------+---------+--------+
|                                             |   (247) |   (285) |  (511) |
|                                             | --------| --------|--------|
+---------------------------------------------+---------+---------+--------+
|                                             |         |         |        |
+---------------------------------------------+---------+---------+--------+
|Investing activities                         |         |         |        |
|                                             |         |         |        |
+---------------------------------------------+---------+---------+--------+
|Payments to acquire fixed assets             |    (56) |    (51) |  (115) |
+---------------------------------------------+---------+---------+--------+
|Receipts from sales of tangible fixed assets |      7  |      -  |    20  |
|                                             | --------| --------|--------|
+---------------------------------------------+---------+---------+--------+
|                                             |    (49) |    (51) |   (95) |
|                                             | --------| --------|--------|
+---------------------------------------------+---------+---------+--------+
|                                             |         |         |        |
+---------------------------------------------+---------+---------+--------+
|                                             |         |         |        |
+---------------------------------------------+---------+---------+--------+
|Financing                                    |         |         |        |
|                                             |         |         |        |
+---------------------------------------------+---------+---------+--------+
|Bank loan repayments                         |      -  |    (27) |  (129) |
+---------------------------------------------+---------+---------+--------+
|Capital element of finance leases and        |   (105) |   (118) |  (260) |
|purchase payments                            | --------| --------|--------|
+---------------------------------------------+---------+---------+--------+
|                                             |   (105) |   (145) |  (389) |
|                                             | --------| --------|--------|
+---------------------------------------------+---------+---------+--------+
|Net increase/(decrease) in cash              |     67  |   (984) |(1,609) |
|                                             | --------| --------|--------|
+---------------------------------------------+---------+---------+--------+
|                                             |         |         |        |
+---------------------------------------------+---------+---------+--------+



Notes to the Interim Report



1 Financial information

The interim results are unaudited and do not constitute statutory accounts. The
comparative information contained in this report for the year ended 30th June
2005 does not constitute the statutory accounts for that financial year. Those
accounts have been reported on by the Group's auditor and delivered to the
Registrar of Companies. The report of the Auditor was unqualified and did not
contain a statement under Section 237(2) or (3) of the Companies Act.


2 Taxation

There is no charge in the profit and loss account for taxation due to the fact
that the Group has tax loss capacity to shelter the profits in the period under
review.


3 Earnings per share

Earnings per share is calculated on the basis of shares 15,770,000 (2004:
15,770,000), which is the weighted average of the number of shares in issue
during the period.

The Company's share options are not dilutive for earnings per share calculations
because the share options' exercise prices are greater than the current market
price.


4 Dividends

The Directors are not recommending the payment of an interim dividend


5 Copies of interim report

Copies of the interim report are being circulated to shareholders. Further
copies are available from the Company's registered office at SWP Group plc, 4th
Floor, Bedford House, 3 Bedford Street, London WC2E 9HD.




                      This information is provided by RNS
            The company news service from the London Stock Exchange

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