Interim Results
November 18 2003 - 11:32AM
UK Regulatory
RNS Number:2215S
Chemetall PLC
18 November 2003
Chairman's statement
The past twelve months have proved to be challenging for the group due to the
continued weak trading environment within the UK manufacturing sector. However,
this has not deflected us from our strategic plan and we have been able to
offset some of the fall in demand and customer closures in our Automotive and
General Industry business by significant gains in the Aerospace and Performance
Products divisions. Furthermore, our Middle East business has shown continued
growth.
Results and dividends
Despite the continuing difficult trading conditions, the Group generated a
profit on ordinary activities before taxation of #2.7 million (2002: #2.5
million) with a turnover for the twelve months of #13.6 million (2002: #13.8
million). The Group holds substantial loans with other Chemetall GmbH group
companies and exchange gains on these loans totalled #0.9 million (2002: loss
#0.8 million). In contrast to the previous twelve-month period this favourable
exchange movement arose as a result of the strength of the Euro, partially
offset by a slightly weaker Dollar.
The Group's loan assets, including exchange movements and interest accrued
thereon, totalled #81.5 million at 30 September 2003 (2002: #74.7 million). The
increase in these assets since September 2002 was mainly due to exchange gains
which totalled #4.8 million, of which #4.3 million was due to the retranslation
of foreign currency denominated investments as shown in the Statement of total
group recognised gains and losses.
Preference dividends continue to be paid on the normal due dates.
Operational Review
The UK Aerospace Division's sales have performed extremely well with significant
new business gained. Defence Sales have been very strong, partially as a result
of increased maintenance activity following the Gulf conflict. The relaunch of
our Ardrox NDT range gives us a strong forward order position.
Automotive Division sales suffered badly following the closure of some
significant automobile manufacturers in 2002. There have also been some process
changes to address in the industry this year (new substrates) which have
increased the need for on-site technical service. This in turn has adversely
affected the contribution received from this Division. We have recruited new
sales expertise in the Midlands area in order to set the Automotive Division
onto a growth path. Early new business indications are promising and we
anticipate modest sales growth for the remainder of the year and for 2004.
Our Advanced Technologies Division has taken the brunt of customer closures and
is currently performing below budget in its key cold forming, general industry
and automotive components segments. We are in the process of restructuring the
division to reflect the changes in strategic approach necessary to set the
Division into a growth phase.
The Performance Products Division (PPD), which targets service-oriented
industries, has performed well with key successes in transport cleaners,
sanitisers and engine repair and maintenance.
Chemetall PLC has recently been accredited with the ISO9000:2000 quality
standard. This is a difficult accreditation to win and one that should provide
us with a competitive edge.
Change of accounting reference date and ultimate parent
As announced in January this year the Group's reporting year-end has changed to
31 December. As a consequence the Group will publish full audited financial
statements for the fifteen months to 31 December 2003.
Furthermore, in October this year we announced that our ultimate holding
company, mg technologies ag ('mg') intends to sell its chemical business,
Dynamit Nobel ('DN'), of which Chemetall PLC is a part. 'mg' has taken the
decision to concentrate on its engineering businesses. The change is seen as
positive as both 'DN' and Chemetall groups are strong performers in their own
right.
Exceptional items
In October 1998, before Chemetall GmbH acquired Brent International PLC, the
former Brent International disposed of its Imaging Management business to Weir
Technology Ltd ('Weir'). Subsequently, the Group received claims from Weir for
damages for alleged misrepresentation and claims under a tax indemnity in the
sale agreement. The Group defended elements of these claims and #0.9 million was
paid to meet the claim and discharge the liability.
Outlook
We are expecting activity to continue at the same level to the end of the
fifteen month period with a return to modest sales growth for next year provided
the economic situation begins to recover. Margins are expected to remain under
pressure and so the company will work hard to create further efficiency gains.
People
The Group remains committed to the full development and training of its
employees. Their hard work has ensured that the business continues to improve
and thrive.
Alec Daly CBE
Chairman
Ends
For further information please contact:
Rob Rydings (Chemetall PLC) 01908 361817
Chemetall PLC
Interim Report
Consolidated Profit and Loss Account
Unaudited Audited
Twelve months
ended Year ended
30 September 30 September
2003 2002
Notes #'000 #'000
Group turnover 1 13,565 13,794
Operating(loss)/profit before
exceptional operating items (85) 317
Exceptional operating items:
Litigation costs (850) -
Operating (loss)/profit after
exceptional operating items (935) 317
Profit on sale of properties held
for resale 6 357
(Loss)/profit on ordinary
activities before interest (929) 674
Net interest receivable and similar 2 3,619 1,871
income
Profit on ordinary activities 2,690 2,545
before taxation
Taxation on profit on ordinary (699) (1,053)
activities
Profit on ordinary activities after 1,991 1,492
taxation
Dividends on equity and non equity (1,080) (1,699)
shares
Amount transferred to/(from) 911 (207)
reserves
Consolidated Balance Sheet
Unaudited Audited
Twelve months
Ended Year ended
30 September 30 September
2003 2002
#'000 #'000
Fixed assets
Intangible 2,979 3,267
Tangible 1,501 1,630
4,480 4,897
Current assets
Investments - 40
Stocks 1,124 1,177
Debtors 85,962 80,241
87,086 81,458
Creditors: amounts falling due within one (5,079) (4,785)
year
Net current assets 82,007 76,673
Total assets less current liabilities 86,487 81,570
Provisions for liabilities and charges (505) (758)
85,982 80,812
Capital and reserves
Called-up share capital 18,889 18,889
Share premium account 29,757 29,757
Profit and loss account 37,336 32,166
Shareholders' funds 85,982 80,812
Equity interest 73,982 68,812
Non-equity interest 12,000 12,000
Shareholders' funds 85,982 80,812
Consolidated Cash Flow Statement
Unaudited Audited
Twelve months
ended Year ended
30 September 30 September
2003 2002
Notes #'000 #'000
Net cash inflow from operating 4 32 257
activities
Returns on investments and servicing of
finance:
Interest received 427 -
Interest paid (61) (28)
Dividends paid on non-equity shares (1,080) (1,080)
Net cash outflow (714) (1,108)
Taxation (203) (993)
Capital expenditure and investments:
Purchase of tangible fixed assets (107) (99)
Purchase of intangible fixed assets (6) (30)
Sale of properties for resale 46 1,636
Net cash (outflow)/inflow (67) 1,507
Decrease in cash in the period 6 (952) (337)
Statement of total group recognised gains and losses
Unaudited Audited
Twelve months
ended Year ended
30 September 30 September
2003 2002
#'000 #'000
Profit for the period 1,991 1,492
Currency translation differences on foreign 4,259 461
currency net investments
Total recognised gains relating to the 6,250 1,953
period
Chemetall PLC
Interim Report
Notes to the unaudited results
1. Segment information
The directors are of the opinion that there is only one class of business, the
supply of specialised indusrial chemicals and ancilliary equipment.
Unaudited Audited
Twelve months
ended Year ended
30 September 30 September
2003 2002
#'000 #'000
i) Geographical Analysis by origin
a) Turnover
UK 12,867 13,375
Middle East 698 419
Total 13,565 13,794
b) Profit before taxation
UK (929) 674
Middle East - -
Total continuing operations (929) 674
Net interest receivable 3,619 1,871
Profit on ordinary activities 2,690 2,545
before taxation
Turnover by destination is not materially different from turnover by origin
stated above.
2. Net interest receivable
Unaudited Audited
Twelve months
ended Year ended
30 September 30 September
2003 2002
#'000 #'000
Net interest on bank loans, overdrafts
and other loans:
Wholly receivable within five years - 2,676 2,739
loans to parent group undertakings
Interest receivable on cash balances 70 2
Exchange gain/(loss) on loans to parent 934 (842)
group undertakings
Total interest receivable 3,680 1,899
Wholly repayable within five years - bank (61) (28)
overdrafts
Net interest receivable 3,619 1,871
3. Movement in shareholders' funds
Unaudited Audited
Twelve months
ended Year ended
30 September 30 September
2003 2002
#'000 #'000
Profit for the period 1,991 1,492
Dividends paid and proposed (1,080) (1,699)
Transfer to/(from) reserves 911 (207)
Other recognised gains and losses
relating to the period 4,259 461
Net increase in shareholders' funds 5,170 254
Opening sharedholders' funds 80,812 80,558
Closing shareholders' funds 85,982 80,812
4. Reconciliation of operating (loss)/profit to net
cash inflow from operating activites
Unaudited Audited
Twelve months
ended Year ended
30 September 30 September
2003 2002
#'000 #'000
Operating (loss)/profit before
exceptional operating items (85) 317
Exceptional operating items:
Litigation costs paid (850) -
Operating (loss)/profit (935) 317
Depreciation, amortisation and impairment charges 531 479
Exchange gain/(loss) on loans to subsidiary
undertakings 934 (843)
Decrease/(increase) in stocks 53 (74)
Decrease in debtors 500 773
(Decrease) in creditors and other provisions (1,051) (395)
Net cash inflow from operating activities 32 257
5. Analysis of net funds
1 October Exchange 30 September
2002 Cashflow movement Other 2003
#'000 #'000 #'000 #'000 #'000
Bank loans and (166) (952) - - (1,118)
overdrafts
Loans to group 74,725 - 4,832 1,920 81,477
undertakings
Total 74,559 (952) 4,832 1,920 80,359
6. Reconciliation of net cash flow to movement in net funds
30 September
2003
#'000
Decrease in cash in the period (952)
Change in net funds resulting from cash flows (952)
Non-cash movements on loans* 1,920
Translation differences 4,832
Movement in net debt in the period 5,800
Net funds at 1 October 2002 74,559
Net funds at 30 September 2003 80,359
* Non-cash movements on loans consist of interest being rolled up into the
principal on existing loans to group undertakings
7. The results for the accounting period ended 30 September 2002 are an extract
from the latest published accounts which have been delivered to the
Registrar of Companies; the report of the auditors on those accounts was
unqualified and did not contain any statement under section 237 of the
Companies Act 1985
8. The results for the twelve months to 30 September 2003 have been prepared on
a basis consistent with the previous year end in accordance with the
accounting policies disclosed in the published accounts
9. The financial information in this statement does not constitute statutory
accounts within the meaning of Section 240 of the Companies Act 1985
10. The interim results were approved by the Board of Directors on 18 November
2003
11. The announcement is being posted to all Shareholders on 20 November 2003
and copies are available at the Company's Registered Office
This information is provided by RNS
The company news service from the London Stock Exchange
END
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