RNS Number:2602J
Fulmar PLC
27 March 2003
FULMAR plc
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2002
* Fulmar, the South London based commercial and book printer, announces a
creditable result, in continuing difficult market conditions of low demand
and severe price pressure prevailing in commercial print. On turnover up
4.6% at #41.58m, before exceptionals pre-tax profit increased by 4.6% to
#3.01m and earnings per share advanced by 10.6% to 7.3p from a restated
6.6p.
* After exceptionals, the pre-tax result was a profit of #1.95m (2001:
loss of #0.10m) and earnings per share were 4.6p (2001: loss per share of
3.0p).
* Year end net assets per share were 85.7p (2001: 86.3p).
* Unchanged total dividends for the year of 5.2p per share are
recommended.
* Commercial Printing (which relates principally to marketing
literature, corporate brochures and annual reports and accounted for 67% of
group turnover) increased turnover by 6%; without Quadracolor (acquired on
31 January 2002), the decrease would have been 15%. In May 2002, W E
Baxter was reorganised and relocated.
* The Group's book cover and jacket and paperback book printing
operations, which accounted for 28% of group turnover, continued to trade
well, increasing turnover by 29%. White Quill, the group's book cover and
jacket printer, increased turnover by 10%, whilst Bookmarque, the group's
mass market paperback book printing business, whose state-of-the-art
operations were commissioned in July 2000, achieved an increase in turnover
of 97%.
* David O'Shaughnessy, Chairman, stated "Our book related businesses
continue to perform well and we anticipate further growth this year. The
market for commercial print remains subdued and the pre-existing
overcapacity has resulted in severe price weakness. We do not expect that
either of these situations will alter during the year but the group's well
organised and efficient businesses remain well placed to compete in
difficult trading conditions."
Enquiries:
Fulmar plc 020-8688 7500
Mike Taylor (Chief Executive)
Derek Harris (Finance Director)
Bankside Consultants Limited
Charles Ponsonby 020-7444 4166
CHAIRMAN'S STATEMENT
In the continuing difficult market conditions of low demand and severe price
pressure prevailing in commercial print, the group's performance, achieving an
increase in pre-tax profit before exceptionals for the year ended 31 December
2002, is particularly creditable.
FINANCIAL REVIEW
The figures in this paragraph disregard the exceptional items referred to below.
Turnover for the year increased by 4.6% to #41.58m from #39.74m. Operating
profit increased by 2.9% to #3.85m (2001: #3.74m), representing an operating
margin of 9.3% (2001: 9.4%). Pre-tax profit was up 4.6% at #3.01m (2001:
#2.88m), representing a pre-tax margin of 7.2% (2001: 7.2%). Earnings per share
increased to 7.3p from 6.6p (restated for the implementation of FRS 19 relating
to deferred taxation).
The #1.07m exceptional charge relates to the relocation and rationalisation
during May 2002 of W E Baxter and to the closure in June 2002 of Lasercraft.
The #2.98m exceptional charge in 2001 related to the disposal of The Box Room
business and comprised a #0.73m provision for loss on disposal and #2.25m
goodwill previously written off to reserves.
After exceptionals, the pre-tax result was a profit of #1.95m (2001: loss of
#0.10m) and earnings per share were 4.6p (2001: loss per share of 3.0p).
Year end equity shareholders' funds were #23.75m (2001: #23.90m, as restated),
giving net assets per share of 85.7p (2001: 86.3p). Year end net indebtedness
increased to #16.7m (2001: #13.3m), with resultant gearing of 70% (2001: 56%),
reflecting capital expenditure of #4.1m (2001: #1.2m) and the financing of the
Quadracolor acquisition. Net interest payable of #0.84m (2001: #0.86m) was
covered 4.6 times (2001: 4.4 times) by operating profit before exceptionals.
OPERATING REVIEW
Commercial printing
Our commercial printing operations, which relate principally to marketing
literature, corporate brochures and annual reports, registered increased
turnover of 6%; without Quadracolor, however, there would have been a decrease
of 15% as the turnover of the other commercial printing businesses fell.
Commercial printing accounted for 67% of group turnover.
Fulmar Colour, which is a broadly based commercial printer, won the Fine Art
Printer of the Year award, presented by Printweek Magazine. The company took
delivery in June 2002 of the first of two 12 colour Heidelberg presses, capable
of printing high quality work in up to 6 colours both sides of a sheet in one
pass. The company has derived significant productivity advantages since
completion of the installation late in August. The second press was installed
successfully after the year end. Both presses, installed at a total cost of
#4.0m, are now operating on a 24 hour shift system.
In May 2002, W E Baxter was reorganised and relocated from Lewes in East Sussex
to Mitcham, near to the group's operations in Croydon, into previously empty
premises already leased by the group. This move has allowed W E Baxter to
source its pre-press and finishing requirements from other group companies,
rather than performing these services in-house, thereby improving group
operational efficiency. Whilst we have retained the paper-over-board ring
binder production, Baxter's PVC ring binder operation was closed and the
company's operating costs significantly reduced. The Lewes freehold premises
vacated by W E Baxter are being offered for sale.
On 31 January 2002, the group acquired Quadracolor, a commercial printing
operation similar to the group's existing businesses but with little client
overlap, and Quadracolor Graphics, its pre-press operation. These businesses
were well equipped, using solely Heidelberg printing presses and benefiting from
electronic pre-press and direct-to-plate technology. The companies operate from
freehold premises of 27,000 sq ft situated in Sydenham, South London. The
initial consideration was #2.0m and, in addition, contingent consideration of up
to #1.0m may be payable, subject to performance.
Book printing
The group's book cover, jacket and paperback book printing operations, which
accounted for 28% of group turnover, continued to trade well, increasing
turnover by 29%.
The group's book cover and jacket printer, White Quill, increased turnover by
10% as it continued to benefit from increasing demand from Bookmarque, the
group's mass market paperback book printing business. In addition, at the
beginning of 2002, a five year supply agreement was signed with the company's
largest customer. In the first half of the year, permanent 24 hour working was
introduced in pre-press, printing and finishing, thereby significantly reducing
the time required to produce covers and jackets to meet customers' just-in-time
requirements.
Bookmarque, whose state-of-the-art operations were commissioned in July 2000,
achieved an increase in turnover of 97% and in December 2002 signed a supply
contract with its largest customer for a four year period providing a 50%
increase in volume over their prior agreement.
Specialist operations
Specialist operations principally comprise Royle Financial Print. This
category's share of group turnover reduced to 5%.
The well publicised lack of activity in City financial markets resulted in a 17%
reduction in turnover at Royle Financial Print. We do not anticipate any upturn
in this market in the near future.
After the year end, the vacant premises in Tamworth, owned by the group and
previously occupied by The Box Room, were sold for #2.1m, achieving a small
profit on sale.
DIVIDENDS
The Directors are recommending an unchanged final dividend of 3.4p per share,
giving unchanged total dividends for the year of 5.2p per share, which, if
approved at the AGM on 12 May 2003, will be paid on 19 May 2003 to those
shareholders on the register at the close of business on 11 April 2003.
OUTLOOK
Our book related businesses continue to perform well and we anticipate further
growth this year. The market for commercial print remains subdued and the
pre-existing over capacity has resulted in severe price weakness. We do not
expect that either of these situations will alter during the year but the
group's well organised and efficient businesses remain well placed to compete in
these difficult trading conditions.
David O'Shaughnessy
Chairman 27 March 2003
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2002
2002 2001
Before
exceptional Exceptional Total Total
items items restated
#000 #000 #000 #000
Turnover
Continuing operations:
- ongoing 36,051 - 36,051 39,740
- acquired 5,533 - 5,533 -
______ ______ ______ ______
41,584 - 41,584 39,740
______ ______ ______ ______
Operating profit/(loss)
Continuing operations:
- ongoing 3,371 (753) 2,618 3,739
- acquired 477 - 477 -
______ ______ ______ ______
3,848 (753) 3,095 3,739
Loss on closure/disposal of subsidiary - (32) (32) (2,977)
Loss on disposal of fixed assets - (281) (281) -
______ ______ ______ ______
Profit/(loss) on ordinary activities before 3,848 (1,066) 2,782 762
interest
Net interest payable (836) - (836) (859)
______ ______ ______ ______
Profit/(loss) on ordinary activities before 3,012 (1,066) 1,946 (97)
taxation
Tax on profit/(loss) on ordinary activities (981) 320 (661) (777)
______ ______ ______ ______
Profit/(loss) on ordinary activities after 2,031 (746) 1,285 (874)
taxation
Dividends (note 1) (1,441) - (1,441) (1,476)
______ ______ ______ ______
Retained profit/(loss) for the year 590 (746) (156) (2,350)
______ ______ ______ ______
Earnings/(loss) per share (note 2) 7.3p (2.7)p 4.6p (3.0)p
Dividends per share 5.2p 5.2p
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2002
2002 2001
restated
#000 #000
Fixed assets
Tangible assets 34,857 32,242
_______ ______
Current assets
Stocks 1,908 1,594
Debtors 14,875 12,489
Cash at bank and in hand
6 22
______ ______
16,789 14,105
Creditors: amounts falling due
within one year (11,757) (12,110)
______ ______
Net current assets 5,032 1,995
______ ______
Total assets less current liabilities 39,889 34,237
Creditors: amounts falling due
after more than one year (12,376) (7,148)
Provisions for liabilities and charges (3,766) (3,186)
______ ______
23,747 23,903
______ ______
Equity shareholders' funds 23,747 23,903
______ ______
MOVEMENTS IN CONSOLIDATED SHAREHOLDERS' FUNDS
FOR THE YEAR ENDED 31 DECEMBER 2002
Called up Share Capital Profit
share premium redemption and loss
capital account reserve account 2002 2001
restated restated restated
#000 #000 #000 #000 #000 #000
At 1 January 1,385 17,921 188 4,409 23,903 25,025
Profit/(loss) for the year - - - 1,285 1,285 (874)
Dividends - - - (1,441) (1,441) (1,476)
Purchase of own shares - - - - - (1,018)
Goodwill previously written off to - - - - - 2,246
reserves
_______ _______ _______ _______ ______ ______
At 31 December 1,385 17,921 188 4,253 23,747 23,903
_______ _______ _______ _______ ______ ______
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2002
2002 2001
#000 #000
Net cash inflow from operating activities 5,899 7,198
______ ______
Returns on investment and servicing of finance
Net interest paid (471) (397)
Interest element of finance lease and hire purchase rentals (365) (462)
______ ______
(836) (859)
______ ______
Taxation paid (388) (662)
______ ______
Capital expenditure
Purchase of tangible fixed assets (1,457) (851)
Sale of tangible fixed assets 635 361
______ ______
(822) (490)
______ _______
Acquisitions and disposals
Acquisition of subsidiaries (1,985) -
Overdraft acquired with subsidiaries (104) -
Sale of subsidiary - 541
Cash disposed of with subsidiary - (21)
______ ______
(2,089) 520
______ ______
Equity dividends paid (1,441) (1,542)
______ ______
Cash inflow before financing 323 4,165
______ ______
Financing
Repurchase of ordinary share capital - (1,018)
New secured loans 6,140 110
Repayment of secured loans (1,739) (1,785)
Capital element of finance lease and hire purchase rentals (2,901) (2,467)
______ ______
1,500 (5,160)
______ ______
Increase/(decrease) in cash 1,823 (995)
______ ______
RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW
FROM OPERATING ACTIVITIES
2002 2001
#000 #000
Operating profit 3,095 3,739
Exceptional closure costs (32) -
Depreciation charges 2,924 3,051
(Increase)/decrease in stocks (195) 157
Decrease in debtors 134 220
(Decrease)/increase in creditors (27) 31
______ ______
Net cash inflow from operating activities 5,899 7,198
______ ______
ANALYSIS OF CHANGES IN NET DEBT
At Acquisition of At 31
1 January Non-cash subsidiary December
2002 changes undertakings Cash flow 2002
#000 #000 #000 #000 #000
Cash at bank and in hand 22 - - (16) 6
Bank overdrafts (2,381) - - 1,839 (542)
Bank loans (4,177) (238) (4,401) (8,816)
Finance leases and hire purchase commitments (6,733) (2,649) (898) 2,901 (7,379)
______ ______ ______ ______ ______
(13,269) (2,649) (1,136) 323 (16,731)
______ ______ ______ ______ ______
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
2002 2001
#000 #000
Increase/(decrease) in cash 1,823 (995)
Cash (in)/outflow from debt and lease financing (1,500) 4,142
______ ______
Change in net debt resulting from cash flows 323 3,147
New finance leases and hire purchase commitments (2,649) (302)
Debt acquired with subsidiaries (1,136) -
______ ______
Movement in net debt in the year (3,462) 2,845
Net debt at 1 January (13,269) (16,114)
______ ______
Net debt at 31 December (16,731) (13,269)
______ _______
NOTES
1. Dividends
A dividend of 1.8p per share (2001 - 1.8p) was paid on 11 November
2002. The directors recommend the payment of a final dividend of 3.4p per
share (2001 - 3.4p) on 19 May 2003 to shareholders on the register at the
close of business on 11 April 2003.
2. Earnings per share
Earnings per share is based on earnings of #1,285,000 (2001 - loss of
#874,000) and average ordinary shares in issue during the year of
27,704,047 (2001 - 29,227,730).
3. Exceptional items
The exceptional items in 2002 relate to the relocation and reorganisation
of W E Baxter Limited, and the closure of Lasercraft (UK) Limited. The
2001 exceptional item relates to the disposal of The Box Room Limited.
4. Prior period adjustment
Following the adoption of FRS19, "Deferred Tax", the comparative figures
for tax on profit/(loss) on ordinary activities, and the deferred tax
provision, have been restated.
5. Abridged accounts
The 2002 financial information constitutes non-statutory accounts within
the meaning of section 240 of the Companies Act 1985; it is an abridged
version of the group's statutory accounts which have not yet been filed
with the Registrar of Companies but which have been reported on by the
group's auditors. The 2001 figures are an extract from the group's
statutory accounts for the year ended 31 December 2001 which have been
filed with the Registrar of Companies. The auditors' report for both years
was unqualified and did not contain a statement under section 237(2) or (3)
of the Companies Act 1985.
6. Copies of this statement are available from the Company's registered
office at The Orion Centre,108 Beddington Lane, Croydon, Surrey CR0 4YY.
The annual report and accounts will be sent to shareholders shortly.
This information is provided by RNS
The company news service from the London Stock Exchange
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