RNS No 7366p
DUDLEY JENKINS GROUP PLC
1st July 1997
DUDLEY JENKINS GROUP plc
Suppliers of mailing lists and databases, computer processing,
polythene products to users of direct mail in the UK and overseas
PRELIMINARY RESULTS
For the year ended 30th April 1997
1997 1996 Increase %
Turnover #21,498,000 #19,498,000 10.3
Operating profit #2,708,000 #1,437,000 88.4
Profit before tax #2,654,000 #1,394,000 90.4
Earnings per share 12.22p 7.27p 68.1
Dividend 4.75p 3.59p 32.3
Commenting on the results, Chairman Mr Tylan Bahcheli said:
This was another record year in which the Group continued to
build actively on the foundations laid in previous years.
Our venture into lifestyle data just two years ago is now
producing very positive results.
Your company is in a strong position to continue the progress it
has made this year.
FULL STATEMENT ATTACHED
ENQUIRIES :
Tylan Bahcheli, Chairman Tel: 0171 378 1409
Paul Wilson, Managing Director
Jim Monteith, Finance Director
Alex Borrelli, Granville Davies Tel: 0171 488 1212
Tim Thompson, Hill Murray Rogerson Tel: 0171 730 3999
Statement by the Chairman, Tylan Bahcheli
Profit before taxation for the year is #2,654,000 (1996:
#1,394,000), up by 90% and turnover increased by 10% to
#21,498,000 from #19,498,000. Earnings per share for 1997 are
68% higher than in 1996 at 12.22p per share.
Dividend
I am pleased to tell you that the directors have recommended a
final dividend of 3.25p (net) per ordinary share. Together with
the interim dividend of 1.5p (net), the total dividend for the
year ended 30th April 1997 is 4.75p (net), representing a 32.3%
increase over 1996. The final dividend will be paid on 3rd
October 1997 to shareholders on the register at the close of
business on 5th September 1997.
Trading
This was another record year in which the Group continued to
build actively on the foundations laid in previous years.
Against a background of increased activity in industry, our new
and our established products sold well. We have enjoyed
continued success in our list and database division and plan to
continue to invest and develop this area of our business. As
you will notice our concentration on this sphere of activity has
created tangible benefits, not only in the level of profits but
also in the quality of our earnings. Our venture into lifestyle
data just two years ago is now producing very positive results.
Our database will shortly contain over 4 million names and is
proving successful for a whole range of companies that we
service. In this area we have recently launched two new
services, namely profiling and data tagging. Paul Wilson in his
review of the year's activities expands on these services which
we hope will enhance our portfolio of products. While our
polythene division's progress during 1997 appears modest, it is
against a background of a 54% increase in profits in 1996 and
finite capacity within the businesses which make up this
division. When we can increase capacity we expect further
progress.
Outlook
The notable increase in our profits during 1997 justified the
directors' belief in seeking to add value to our business rather
than the pursuit of turnover. We will continue to look for
further opportunities through the most appropriate and
beneficial route, whether through internal investment or
acquisition. The cautious optimism reflected by current market
conditions has certainly helped produce our 1997 results. We
hope that such conditions are sustainable so that we can report
another successful year in 1998.
Review of year's activities by Managing Director, Paul Wilson
The scope of direct marketing has expanded in recent years. For
example, we have seen successful initiatives from major
retailers in the creation of loyalty cards which help build
databases and can be used to expand sales. Most major financial
institutions now use direct marketing as an integral and key
component in the marketing mix. Even producers of fast moving
consumer goods are now exploiting the potential direct marketing
has to offer. In short, the meaning of direct marketing and the
uses to which data can be put is changing rapidly.
Your company's ability to foresee and to react to such trends
and to exploit these changes successfully has helped us to
produce these exemplary results. Our success in doing so should
stand us in good stead for the foreseeable future.
List and Database Division
1995 1996 1997
#'000 #'000 #'000
Turnover 9,683 13,985 15,790
Operating profit 710 917 2,042
Sales from Dudley Jenkins List Broking, Market Location,
Consumer Surveys and Dowerhill grew by 13% and operating profits
increased by 123%.
In the previous year our list broking operation had to cope with
the withdrawal of supply by a number of suppliers as a result of
our establishment of Consumer Surveys, our lifestyle data
company. I am happy to report that the measures we took to
counter this have been very successful and during this year our
list broking operation grew sales by 20% against the previous
year. The development and sale of higher value products by
Dudley Jenkins List Broking has continued to ensure this
company's success.
Market Location, our business-to-business data specialist
continued to increase the strength of its position in a market
which has really only recently started to recover. Indeed the
growing strength of this market sector should mean that Market
Location is well placed to make further advances in 1997/98.
Dowerhill, based in Worksop, has consolidated its position as
one of the UK's leading data capture suppliers. This year we
have developed additional services in response to requests from
our clients and now have a very strong level of demand for our
services from an increasingly blue chip base.
Late in the year we disposed of our 50% interest in Active Media
for a nominal amount in order to give more attention to our
wholly owned businesses. While this associated company shows as
a loss of #36,000 on the year, the overall impact has been to
increase reserves by #12,000 as a result of the goodwill
adjustment.
Consumer Surveys is now firmly established as a leading supplier
of direct marketing data in the UK. The benefits of our move
into what was a new business are now flowing through. At the
same time we have now begun our development of ancillary
products and services which we believe will help Consumer
Surveys to grow its business. Of note our new profiling package
allows direct mail advertisers to locate individuals on our
database which most closely resemble their existing customers.
Secondly, through our new data tagging service we are able to
help enhance an advertiser's knowledge of its own database.
Both developments should enable us to sell more data. The
company moved to larger premises late in the year to help
facilitate our expansion and development.
Polythene Division
1995 1996 1997
#'000 #'000 #'000
Turnover 4,631 5,556 5,755
Operating profit 477 735 735
This division grew tremendously over the previous two years,
increasing profits in 1996 by 54%. This year has been spent
consolidating our position. As the table above shows,
Transmail, Sefton Polythene and Magazine Mailing grew sales by a
modest 3.6% and operating profit marked time in this financial
year. It is perhaps worth noting that for this division our
volume of sales is absolutely limited by the plant employed. In
short, there is a finite physical capacity and during this year
we made no notable expansion in capacity.
Transmail had yet another very good year. As one of the market
leaders it is potentially vulnerable to competition. Despite
this Transmail actually increased its market coverage during the
year.
Sefton Polythene, located in Liverpool, began building a
telesales operation similar to that of Transmail but was not
able to do so as quickly as hoped, largely due to a difficult
labour market. These difficulties are now being addressed and
we hope to make more progress in 1997/98.
Magazine Mailing, our polythene wrapping and mailing business in
Maidstone, expanded its range of clients and developed its hand
enclosing operation during the year. Business has certainly
strengthened and given us a limited ability to increase prices.
Outlook
The generally favourable trading environment throughout the
twelve months gave us the opportunity to continue the growth of
our businesses, notably in the database division. Since our
business is not one characterised by lengthy contracts this has
meant continuous attention to the demands of our clients and
continuous effort to enlarge our client base. At the same time
we have started to develop new products to help us in future
years. Following a change in Government, trading conditions
still appear to be firm. So long as general consumer demand is
sustained, your company is in a strong position to continue the
progress it has made this year.
During 1996/97 our investment in new data declined and our
overall investment across our businesses almost halved. This
has more to do with the timing of our national survey
distributions which help us build our databases than any move to
reduce investment. Quite simply, during the previous year we
invested more in our fledging Consumer Surveys operation than we
needed to this year. In 1997/98 we plan to increase our
investment once again. We are acutely aware that it has been
the volume of our investment which has both increased our
earnings and the quality of these earnings.
Our most important asset is our personnel, which does not show
on any balance sheet. Sheer hard work, enthusiasm and
professionalism has once again won through. We have
strengthened an already strong team and know they will do their
utmost to further the success of Dudley Jenkins in this new
financial year. My sincere thanks go to all our managers and
staff.
Group Profit and Loss Account
for the year ended 30th April 1997
Continuing operations
1997 1996
Notes #'000 #'000
Turnover 2 21,498 19,498
Cost of Sales (10,934) (11,562)
Gross profit 10,564 7,936
Administrative expenses (8,041) (6,623)
Other operating income 185 124
Operating profit 2 2,708 1,437
Interest in
associated undertaking (36) 26
Other interest receivable
and similar income 119 54
Interest payable and similar charges (137) (123)
Profit on ordinary activities
before taxation 2,654 1,394
Tax on profit on ordinary
activities 3 (1,034) (476)
Profit on ordinary activities
after taxation 1,620 918
Dividends (633) (470)
Retained profit for the
period 5 987 448
Earnings per share 4 12.22p 7.27p
Fully diluted earnings per share 4 11.50p 6.70p
Dividend per share 4.75p 3.59p
There are no recognised gains or losses other than those
included above.
Group Balance Sheet
as at 30th April 1997
1997 1996
Notes #'000 #'000
Fixed assets
Tangible assets 3,313 4,052
Investments 230 -
3,543 4,052
Current assets
Stocks 222 212
Debtors 7,064 5,951
Short-term deposits 3,025 500
Cash at bank and in hand 971 997
11,282 7,660
Creditors: amounts falling due
within one year (8,937) (6,064)
Net current assets 2,345 1,596
Total assets less current liabilities 5,888 5,648
Creditors: amounts falling due
after more than one year (313) (1,424)
Provisions for liabilities and charges (12) (143)
Net assets 2 5,563 4,081
Capital and reserves
Called up share capital 671 632
Share premium account 4,195 3,786
Merger reserve (1,914) (1,914)
Profit and loss account 2,611 1,577
Equity shareholders' funds 5 5,563 4,081
Group Cash Flow Statement
for the year ended 30th April 1997
Notes 1997 1996
#'000 #'000
Net cash flow from operating
activities 6 4,828 2,181
Returns on investments and servicing
of finance
Interest received 121 54
Interest paid (110) (93)
Interest element of finance lease
rental payments (27) (30)
Net cash outflow from returns
on investments and servicing of finance (16) (69)
Taxation
Tax paid (556) (238)
Capital expenditure and financial
investment
Purchase of tangible fixed assets (1,261) (2,209)
Repayment of loan by associated
undertaking 11 54
Proceeds from sale of tangible
fixed assets 95 168
Proceeds from sale and leaseback
transactions - 132
Net cash outflow from capital
expenditure and financial investment (1,155) (1,855)
Equity dividends paid (523) (438)
Cash inflow/(outflow) before management
of liquid resources and financing 2,578 (419)
Management of liquid resources
Money market deposits (2,525) (500)
Financing
Net proceeds from issue of ordinary
share capital 3 15
Capital element of finance lease
rental payments (82) (121)
Proceeds from bank loan - 1,000
Net cash (outflow)/inflow from
financing (79) 894
Decrease in cash in the period (26) (25)
Notes to the Preliminary Results
1. Accounting policies
This statement has been prepared on the basis of the
accounting policies as set out in the group's 1995/96 annual report.
2.Segmental analysis
Year ended Year ended
30 April 30 April
1997 1996
#'000 #'000
Turnover
List broking and database
services 15,790 13,985
Polythene products 5,755 5,556
Inter-segment sales (47) (43)
Sales to third parties 21,498 19,498
Profit on ordinary activities before taxation
List broking and database
services 2,042 917
Polythene products 735 735
Unallocated common costs (69) (215)
Operating profit 2,708 1,437
Associated undertaking (36) 26
Net interest (18) (69)
2,654 1,394
Net assets
List broking and database
services 3,698 4,528
Polythene products 1,262 942
Associated undertaking - (40)
Unallocated and non-operating
net assets / (liabilities) 603 (1,349)
5,563 4,081
All of the group's turnover originates in the United Kingdom.
The unallocated common costs and net liabilities relate to the
operations of the group's head office and the financing of the
group.
3. Taxation
The tax on profit on ordinary activities has been
increased by an adjustment of #28,000 (1996: reduced by
#20,000) relating to prior years.
4. Earnings per share
Earnings per share are calculated on the weighted average
number of shares in issue which were:
Year ended Year ended
30 April 30 April
1997 1996
'000 '000
Basic 13,254 12,625
Fully diluted 14,470 14,196
5. Reconciliation of movements in equity shareholders'
funds
#'000
Equity shareholders' funds as at 1 May 1996 4,081
Retained profit for the financial period 987
New ordinary share capital subscribed 447
Goodwill write back on sale of Active Media Ltd 48
Equity shareholders' funds as at 30 April 1997 5,563
776,000 new ordinary shares were issued during the year with a
nominal value of #39,000. 673,000 of these shares were issued
on conversion of the company's convertible loan stock. The
remaining 103,000 shares were issued on the exercise of share
options.
6. Reconciliation of operating profit to net cash inflow from
operating activities
Year ended Year ended
30 April 30 April
1997 1996
#'000 #'000
Operating profit 2,708 1,437
Depreciation charge 1,944 1,154
(Profit)/loss on sale of
tangible fixed assets (41) 3
Increase in stocks (10) (39)
Increase in debtors (1,015) (1,286)
Increase in creditors 1,242 912
Net cash inflow from operating
activities 4,828 2,181
7. Reconciliation of net cash flow to movement in net debt
Year ended Year ended
30 April 30 April
1997 1996
#'000 #'000
Decrease in cash in the period (26) (25)
Cash outflow from increase in
liquid resources 2,525 500
Cash outflow/(inflow) from
(decrease)/increase in debt and
lease financing 82 (764)
Change in net debt resulting
from cash flows 2,581 (289)
New finance leases - (300)
Conversion of loan stock 370 -
Movement in net debt in the period 2,951 (589)
Net (debt)/funds at 1st May (284) 305
Net funds/(debt) at 30th April 2,667 (284)
8. Financial statements
The financial information set out above does not constitute the
company's financial statements for the years ended 30 April 1997
or 1996. The financial information for 1996 is derived from the
financial statements for 1996 which have been delivered to the
registrar of companies. The auditors have reported on the 1996
financial statements; their report was unqualified and did not
contain a statement under section 237(2) or (3) of the Companies
Act 1985. The financial statements for 1997 will be finalised
on the basis of the financial information presented by the
directors in this preliminary announcement and will be delivered
to the registrar of companies following the companies annual
general meeting on 9th September 1997.
END