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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 : 8279A
SWP Group PLC
26 March 2013
Half Yearly Results
for the six months ended 31 December 2012
SWP Group plc (the "Group")
Half Yearly Results
for the six months ended 31 December 2012
Chairman's Statement
Corporate Review
The period covered by these half yearly results for the six months to 31(st) December 2012 has demonstrated the sharp contrast in the performance of a number of the Group's businesses. In the case of Ulva which is a leading niche supplier of materials to reduce Corrosion Under Insulation ("CUI") to the oil, gas and petrochemical majors around the world, project demand has been strong with significantly increased levels of profitability as compared to the corresponding period in 2011. On the other hand our construction industry businesses, where Fullflow and Crescent are leading suppliers respectively of siphonic rainwater management systems and metal staircases, sluggish demand particularly in the French and Spanish markets has seen lower activity levels consistent with the well publicised difficulties faced by the construction industry both here in the UK and Continental Europe.
Financial Results
Little has changed on the economic front as markets struggle to cope with the economic downturn experienced in the UK and the other European countries in which we operate. In particular the Spanish economy is in a parlous state and as reported below we have been forced to take decisive action in regard to the risks and the prevailing market conditions facing Fullflow's activities in that country. Elsewhere lack of infrastructure projects, funding constraints and intense competition have translated into competitors chasing lower volumes of available work sometimes at prices that can only be regarded as commercially suicidal.
Fortunately, the same cannot be said in respect of Ulva's presence in the oil and gas sector where despite the usual competitive pressures there is a fertile international market based on technical specifications where Ulva's track record over time offers discerning customers not only quality products and design solutions but site supervisory services that ensure delivery to the full expectation of the end user.
Hot Features
Premium
Unaudited Unaudited
six months six months
ended 31.12.12 ended 31.12.11
GBP'000 GBP'000
Revenue 8,880 9,006
Operating profit before exceptional
costs and amortisation of intangible
assets 538 164
Profit/(loss) before tax 129 (81)
Taxation (25) -
Profit/(loss) after tax 104 (81)
Earnings per share 0.05p (0.04p)
In essence the strong performance at Ulva has to a degree been counterbalanced by weak results within the Fullflow Group with the exception of Plasflow where profits have been achieved in line with expectation. Disappointing results have also been recorded at Crescent which has been unable to sustain the recovery which it achieved in 2011/2012.
Turnover has been flat at GBP8.88m (2011:GBP9.00m) whereas operating profits have advanced by threefold as compared to the corresponding period in 2011. Exceptional costs represent the downscaling of Fullflow's business activities in Madrid which by now are more or less complete.
Borrowings
The downward trend in the Group's debt obligations continues. The pace of reduction is primarily dictated by the larger scale projects in Ulva with debt being collected in the main by Irrevocable Letters of Credit. Looking to the debt position at 30(th) June 2013 we anticipate a further significant decline by the end of this financial year if the pattern of sales goes according to plan.
Operational Highlights
Polymer Membrane Division
Ulva
Ulva has performed very much in line with the Board's expectations in the first half of the year and this is projected to continue for the full year. Overall, Ulva's results are expected to be consistent with the previous year.
The business is currently transacting a number of prestigious projects including the construction of a new LNG receiving terminal in Japan and the construction of what will become, upon its deployment, the most northerly located Floating Production, Storage and Offloading (FPSO) vessel in the world, where Ulvashield had been selected to help counter CUI in a particularly harsh environment.
A number of initiatives aimed at stimulating further growth in the Ulva business are gaining momentum. The first key initiative is to selectively increase the skill and resource in the business. The U.S. arm of Ulva is very well equipped to support its customers and results in this territory are encouraging with two major new construction projects currently underway. The European team has been bolstered by the appointment of an Area Sales Manager from within the industry which will substantially improve Ulva's capability to support its customers close to home. Focus is very much on finding the right candidate to lead Ulva's activities in South East Asia in order to complete the sales team. Demand has remained strong for Ulva's site services team which has been extended to meet demand. The role of the site services team is to ensure that discerning, specifying end users receive precisely what is envisaged when the specification was written at the conclusion of the construction phase. This vital ingredient ensures that Ulva is fully engaged in assisting its customers to counter CUI as opposed to simply selling system components.
The second key initiative is the development and introduction of a new system to complement the existing Ulvashield system and add incremental sales volume. The product development process has been on-going for some time and is now at the pre-production prototype stage. Formal launch will take place later this year.
Visibility of the forward pipeline for this specification driven business gives cause for optimism.
DRC Polymer Products
The 'leasing' of the Hylam FPA business to a close trading partner of DRC has proven to be successful for all parties. DRC is receiving an assured income from the lease, DRC's customers have continuity of supply to high quality standards and DRC's partner has been able to realise growth in the business.
DRC's exit from the roofing sector means that its primary purpose is the manufacture of Ulvashield for its sister company. Substantial benefits accrue from rationalising the number of manufacturing locations operating within the Polymer Membrane Division and the Board of SWP has recently approved the purchase of a new state of the art manufacturing process line for the production of Ulvashield at Ulva's Telford factory location. This will lead to the cessation of DRC's activities with the corresponding reduction in the cost of operating the Soham factory. This positive rationalisation will have a beneficial impact on earnings for DRC during the year to 30(th) June 2014.
Fullflow
As has been the case for some time now the economic climate has had a profound effect on the Building and Construction sectors which is where Fullflow Group traditionally markets its bespoke designed systems and installations. In the UK a dedicated team has increased the quality and number of projects completed in the period but there has been a lack of major infrastructure projects such as airports and stadia where Fullflow has particular expertise. Systems have been installed at the Nissan factory in Sunderland and the Jaguar facility in Wolverhampton as well as a range of assignments across middle and south east England for the large supermarket chains and distribution outlets.
Fullflow Systemé in France has experienced difficult trading conditions and has sustained a small loss at the half year. The economy in France is looking more fragile at this time and although the order book is well charged this stretches out over a number of months into the future with a tendency for postponement and delay to feature. The second half of the year will be challenging for the management team in Paris who are very experienced and capable of benefiting from any upturn in market trends.
Fullflow Sistemas in Spain has absorbed a considerable and unproductive amount of senior management time. The economic prognosis for the Spanish economy can only be described as fraught with difficulty and the construction sector is in particularly bad shape. A full scale review of the Spanish activities has been undertaken which concluded that the risks involved in operating within the Spanish market were disproportionate to the potential rewards on offer in market conditions which are not conducive to conducting good business with reasonable prospects of success. In the absence of a return on the equity invested we took the decision in January 2013 to close the Madrid facility. This market is now conditioned to granting average credit terms to customers of more than 180 days without in most cases the benefit of any credit insurance and under such circumstances there is no justification for Fullflow to remain active in this particular market.
Plasflow which has a state of the art fabrication facility based in Rotherham has performed strongly in the half year to 31 December 2012. The business is centered around producing pipe fabrications for Fullflow but in recent years has developed close links to the Nuclear Sector here in the UK. Strong strategic partnerships exist whereby Plasflow works closely with main contractors to develop pipe solutions for many of the UK's nuclear plants. There is good reason to expect Plasflow to develop and grow within this sector in line with the Group's aspirations for the future.
Crescent of Cambridge
Unfortunately the progress recorded in the year to 30(th) June 2012 has not been sustained in the six months to 31(st) December 2012 and the business has once again become loss making. The ongoing development of computer based design automation has produced benefits within the business as indeed has the strengthening of the sales team with the recruitment of an experienced Sales Manager but market conditions remain depressed and competitive influences have had an adverse impact on the trading outlook which has also been affected by poor levels of demand in an already depressed market.
Research & Development
The Group has for some time been actively engaged in product development across most of its activities. These extend to design automation at Crescent to new product initiatives at both Fullflow and Ulva where we expect to launch complimentary products later this year which are designed to add incremental revenue in both cases. They are also likely to add attractive and unique additions to the product portfolios on offer.
Training Programme
A number of training programmes have been run during the past year designed to equip our management teams with additional skills. Courses and seminars have been organised for all sales executives throughout the Group presented and operated by professional third party coaches. There have also been seminars in contractual documentation run by professional lawyers experienced in contract law as well as meetings with experts in the field of Health & Safety. The Group intends to provide management with more opportunities of this nature as part of a programme of continuous improvement in managing our various businesses.
Employees
Market conditions remain extremely difficult in most of the sectors in which we operate. As previously stated we are recruiting further sales and technical resources within Ulva so that we can provide professional expertise and coverage to key areas of the world where we anticipate sales growth.
Closer to home, cost control within our construction led businesses has to be the order of the day until such time as there is evidence of growth potential which our experienced teams are ready to exploit at the first signs of economic recovery.
Our employees continue to work diligently and my Board of Directors wishes to express its gratitude to staff in each and every business without whose dedication and commitment these improved results would not have been possible.
Current Trading and Prospects
Despite the depressed economic outlook the prospects for the Group remain positive. Our Ulva business continues to develop according to plan notwithstanding the long gestation periods involved in breaking into new territories.
We have greater levels of visibility for this project led business and we see considerable potential for growth over the period of the next five years. It is for this reason that the Group intends to deploy the necessary investment in both capital and human resources to ensure the delivery of future revenue streams and sustained profitability.
For our construction oriented businesses we envisage that short term growth is likely to be elusive but we believe that Fullflow in particular has considerable medium to long term opportunities available to it in international markets where its reputation and brand are highly respected. Locally we plan to maximise profitability through strategic relationships with long standing customers whilst maintaining a low cost profile thereby minimising exposure to risk at a time of demonstrable austerity.
J A F Walker
Chairman
22(nd) March 2013
Unaudited Consolidated Statement of Comprehensive Income
Six months Six months Year
ended 31.12.12 ended 31.12.11 ended
Unaudited Unaudited 30.06.12
GBP'000 GBP'000 Audited
GBP'000
Revenue Note 1 8,880 9,006 20,922
Cost of sales (4,848) (5,410) (11,934)
---------------- ---------------- ----------
Gross profit 4,032 3,596 8,988
Operating expenses (3,494) (3,413) (7,466)
---------------- ---------------- ----------
538 183 1,522
Exceptional operating expenses (202) (20) (196)
Amortisation of intangible
assets acquired through business
combinations net of deferred
tax (82) (82) (165)
Share based payment (21) (19) (42)
---------------- ---------------- ----------
Operating profit 233 62 1,119
Financial income - - -
Financial costs (104) (143) (284)
---------------- ---------------- ----------
Profit/(loss) on ordinary
activities before taxation 129 (81) 835
Income tax charge (25) - (227)
---------------- ---------------- ----------
Profit/(loss) for the period 104 (81) 608
---------------- ---------------- ----------
Total comprehensive income
Profit for the period and
total comprehensive income
attributable to equity holders
of the company 104 (81) 608
---------------- ---------------- ----------
Basic earnings per share (pence)
Note 2 0.05p (0.04)p 0.30p
---------------- ---------------- ----------
Diluted earnings per share
(pence) 0.05p (0.04)p 0.30p
---------------- ---------------- ----------
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 2011 has been restated to take account of the bonus issue declared in 2012 of 10 new ordinary shares for every ordinary share held in the Group ranking pari passu.
Unaudited Consolidated Statement of Changes in Equity
Called Capital Re-valuation Retained Total
up share reserve reserve earnings
capital
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2011 1,016 58 229 13,945 15,248
Result for the
period - - - (371) (371)
Bonus issue - - - (402) (402)
Capital reorganisation - 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 - - - (114) (114)
---------- --------- ------------- ---------- --------
At 31 December
2011 1,016 98 229 12,941 14,284
Result for the
period - - - 689 689
Dividend - - - (151) (151)
Share based payment - 23 - - 23
Purchase of treasury - - - - -
shares
---------- --------- ------------- ---------- --------
At 30 June 2012 1,016 121 229 13,479 14,845
Result for the
period - - - 104 104
Share based payment - 21 - - 21
Purchase of treasury
shares - - - (26) (26)
---------- --------- ------------- ---------- --------
At 31 December
2012 1,016 142 229 13,557 14,944
---------- --------- ------------- ---------- --------
Unaudited Consolidated Statement of Financial Position
As at As at As at
31.12.12 31.12.11 30.06.12
GBP'000 GBP'000 GBP'000
Non-current assets
Intangible assets 8,190 8,430 8,310
Property, plant and equipment 5,474 5,561 5,525
Trade and other receivables 488 557 504
Deferred tax assets 472 624 472
Investment 50 - 50
---------- ---------- ----------
14,674 15,172 14,861
---------- ---------- ----------
Current assets
Inventories and work in progress 3,151 3,624 2,983
Trade and other receivables 5,494 6,313 8,445
----------
8,645 9,937 11,428
---------- ---------- ----------
Total assets 23,319 25,109 26,289
---------- ---------- ----------
Current liabilities
Trade and other payables (3,099) (3,969) (5,724)
Current tax liabilities (250) (153) (371)
Obligations under finance leases - (7) (10)
Bank loans and overdrafts (2,094) (1,455) (1,895)
---------- ---------- ----------
(5,443) (5,584) (8,000)
---------- ---------- ----------
Non-current liabilities
Bank loans (821) (2,916) (1,285)
Deferred tax liabilities (2,111) (2,326) (2,147)
Obligations under finance leases - - (12)
---------- ---------- ----------
(2,932) (5,242) (3,444)
---------- ---------- ----------
Total liabilities (8,375) (10,826) (11,444)
---------- ---------- ----------
NET ASSETS 14,944 14,283 14,845
========== ========== ==========
Capital and reserve
Called up share capital 1,016 1,016 1,016
Capital reserve 142 98 121
Revaluation reserve 229 229 229
Retained earnings 13,557 12,940 13,479
---------- ---------- ----------
TOTAL EQUITY 14,944 14,283 14,845
========== ========== ==========
Unaudited Consolidated Statement of Cash Flows
Six months Six months Year ended
ended 31.12.12 ended 31.12.11 30.06.12
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Profit after tax 104 (81) 608
Adjustments for:
Net finance costs 104 143 281
Corporation tax charge 25 - 231
Depreciation of property, plant
and equipment 128 142 286
Amortisation of intangible assets 120 120 240
Loss on disposal of plant and
equipment 3 - 1
---------------- ---------------- -----------
Operating cash flows before movement
in working capital 484 324 1,647
Decrease/(increase) in inventories
and work in progress (168) 171 812
Decrease in receivables 2,967 492 (1,587)
Decrease in payables (2,677) (1,166) 671
Interest paid (102) (126) (284)
Corporation tax paid (111) (36) (49)
---------------- ---------------- -----------
Net cash inflow from operating
activities 393 (341) 1,210
---------------- ---------------- -----------
Cash flow from investing activities
Investments - - (192)
Purchase of property, plant and
equipment (80) (40) 50
Proceeds from disposals of property,
plant and equipment - - 5
---------------- ---------------- -----------
Net cash outflow from investing
activities (80) (40) (237)
---------------- ---------------- -----------
Cash flow from financing activities
Dividend paid - - (151)
Bank loans repaid (409) (664) (1,314)
Purchase of treasury shares (26) (115) (114)
Finance lease repayments, net (22) 21 8
---------------- ---------------- -----------
Net cash outflow from financing
activities (457) (758) (1,571)
---------------- ---------------- -----------
Net increase in cash and bank
overdrafts (144) (1,139) (598)
Cash, cash equivalents and bank
overdrafts at
beginning of period (914) (316) (316)
---------------- ---------------- -----------
Cash, cash equivalents and bank
overdrafts at end of period (1,058) (1,455) (914)
================ ================ ===========
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 2012 and 31 December 2011 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 2012 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 2012 and which are expected to apply as at 30 June 2013.
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 2012 ended 31 Dec 2012 31 Dec 2012
Dec 2012 Dec 2012
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue
External revenues 4,505 727 3,648 - 8,880
Intergroup sales 322 - 1,066 - 1,388
------------ ----------------- ------------ ------------ --------------
Total revenues 4,827 727 4,714 - 10,268
Cost of sales (2,873) (541) (2,822) - (6,236)
------------ ----------------- ------------ ------------ --------------
Gross profit 1,954 186 1,892 - 4,032
Operating expenses (1,942) (313) (841) (398) (3,494)
------------ ----------------- ------------ ------------ --------------
12 (127) 1,051 (398) 538
------------ ----------------- ------------ ------------ --------------
Exceptional operating
expenses (202) - - - (202)
Amortisation of intangible
assets acquired through
business combinations
net of deferred tax - - - (82) (82)
Share Based Payment - - (21) (21)
Intergroup royalty (charge)/income - - (528) 528 -
Intergroup management
fees - - (114) 114 -
Intergroup rent (charges)/income - - (36) 36 -
Operating (loss)/profit (190) (127) 373 177 233
Financial income - - - - -
Financial costs (9) - - (95) (104)
Intergroup financial
charges (14) - (31) 45 -
------------ ----------------- ------------ ------------ --------------
(Loss)/profit on ordinary
activities before taxation (213) (127) 342 127 129
Income tax charge - - (15) (10) (25)
------------ ----------------- ------------ ------------ --------------
(Loss)/profit for the
period attributable
to equity holders of
the company (213) (127) 327 117 104
============ ================= ============ ============ ==============
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 2011 ended 31 31 Dec Dec 2011
Dec Dec 2011 2011
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)
============ ================= ============ ============ ============
4. Income Tax Expense
Recognised in the income statement
Six months Six months Year
ended 31.12.12 ended 31.12.11 ended 30.06.12
Unaudited Unaudited Unaudited
GBP'000 GBP'000 GBP'000
Current tax expense
Current year - UK corporation
tax 25 - 217
Current year - overseas
tax - - 1
Deferred tax movement - - 9
Total tax expense in income
statement 25 - 227
---------------- ---------------- ----------------
5. Earnings Per Share
Earnings per share is calculated on the basis of 196,480,006 shares (2011: 198,459,965) 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 200,980,006 shares (2011: 198,980,000) which is the weighted average of the number of shares in issue during the period.
6. Copies of Half Yearly Report
Copies of the half yearly 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
Chairman Finance Director
SWP Group plc SWP Group plc
Tel office: 01353 723270 Tel office: 01353 723270
Mobile: 07800 951151 Mobile: 07940 523135
Ranald McGregor-Smith Richard Kauffer/Daniel
Corporate Finance Advisors Harris
Whitman Howard Nominated Advisor & Broker
Tel office: 020 7811 3525 Peel Hunt LLP
Tel office: 020 7418 8900
This information is provided by RNS
The company news service from the London Stock Exchange
END
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