RNS Number:4785P
Guiton Group Ld
08 September 2003
8 September 2003
The Guiton Group Limited
Interim Results for the six months ended 30 June 2003
The Guiton Group Limited ("Guiton"), the AIM quoted publisher of the Jersey
Evening Post and Guernsey Press daily newspapers, announces Interim Results for
the six months ended 30 June 2003.
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First half First half
2003 2002
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Turnover #'000 34,563 37,279
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Operating profit* (continuing operations) #'000 2,384 2,649
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Profit before tax #'000 2,334 2,394
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Distributable profit #'000 1,846 1,885
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Basic earnings per share pence 6.81 6.96
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Adjusted earnings per share pence 6.89 6.84
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Interim dividend per share pence 3.54 3.22
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* Before goodwill charges and exceptional items
* Solid result for the first six months in the face of continued
difficult markets
* Profit before tax at #2.3m (2002: #2.4m) is on a par with last year,
which benefited from an exceptional gain and a significantly lower pension
charge
* Circulation of the Jersey Evening Post and Guernsey Press newspapers
remained similar to last year; employment advertising continued to fall but
other advertising sectors increased
* Retail and wholesale turnover increased slightly but margins are under
pressure
* The Technology division made good progress following its restructuring
in 2002
* Underlying results, as represented by adjusted EPS, improved slightly
* 10% increase in dividend, reflecting the Board's confidence in the
Group's prospects
Senator Frank Walker, Chairman, commented:
"I am pleased to report a solid result for the first six months of the year, in
particular the early benefits of the turn-around strategy for our technology
division. This was achieved in the face of continued deterioration in our main
markets.
"Overall the Group is trading to plan for 2003 and is well placed to take
advantage of any economic upturn."
- ends -
For further information, please contact:
The Guiton Group Limited 01534 611800
John Averty, Chief Executive
Rick McHattie, Finance Director
Weber Shandwick Square Mile 020 7067 0700
Nick Oborne or Louise Robson
8 September 2003
The Guiton Group Limited
Interim Results for the six months ended 30 June 2003
Chairman's Statement
I am pleased to report a solid result for the first six months of the year with
pre-tax profit on a par with last year when there was an exceptional capital
gain and a significantly lower pension charge. This performance, achieved in the
face of continued deterioration in our main markets, reflects in particular the
early benefits of the turn-around strategy for our technology division.
Results
Turnover from continuing operations at #34.6m (2002: #35.6m) was 3% lower, with
growth from the retail and wholesale division being negated by a fall in
technology hardware sales and a small overall decline in advertising sales.
Operating profit, at #2.36m (2002: #2.40m) was down 2% compared with the
previous year. Operating profits from continuing operations (and before
amortisation of goodwill) decreased by 10% to #2.4m (2002: #2.6m). Technology
margins improved considerably but pressure on retail margins and the continuing
fall in the employment advertising market resulted in a reduction of the
operating margin from 7.1% to 6.8%.
Last year's exceptional profit of #116k made from printing businesses sales and
closures was not repeated. First half results this year also reflect an extra
#160k pension contribution which in 2002 was accounted for at the year end.
Pre-tax profit fell marginally by #60k to #2.3m. The effective tax rate has
increased to 20.9% (2002: 19.8%) reflecting the non-availability of tax-exempt
gains on the disposal of businesses which were enjoyed last year.
Basic earnings per share (EPS) of 6.81p (2002: 6.96p) were 2% down on last year;
adjusted EPS (excluding goodwill charges totalling 0.08p per share) increased by
1% to 6.89p (2002: 6.84p).
Expenditure on fixed assets of #1m was incurred on retail stores, improved IT
systems and conversion to a digital system of photography in the newspapers.
The underlying trend of reducing borrowings continued enabling the Group to
re-structure its bank facilities in a more flexible and cost-efficient form.
Dividend
The Board continues to have confidence in the Group's prospects despite the
continuing challenging market conditions and has again declared a 10% increase
in the interim dividend. The sum of 3.54p per share net (2002: 3.22p) will be
paid on the 3rd October 2003 to shareholders on the register on 19th September
2003.
Review of Operations
Publishing
The two daily newspapers, the Jersey Evening Post and the Guernsey Press, have
generally coped well with the worsening of the important employment advertising
market. Revenues in this category fell #428k compared with the corresponding
period last year; other advertising sectors, particularly property, performed
well to reduce the overall advertising income deficit to just over #100k.
Circulation of both newspapers remained similar to last year with Guernsey
showing a slight increase and Jersey a small decline.
Progress continues in introducing common technology systems as replacements are
required and a common accounting system has been implemented. This policy not
only enhances resilience but also enables the division to maximise its use of
technology with minimum resources.
Retail and wholesale
Although turnover has grown by a healthy 7% year on year, margins have come
under pressure as competition, particularly in higher margin products, has
increased.
The success of the move into the SPAR branded convenience store sector over the
past few years continues with sales in this category rising by 12%, including a
substantial rise in petrol sales, albeit at low margin, in the Isle of Man. Our
high street stores have suffered from increased competition and low consumer
confidence in the Channel Island market with the result that turnover dropped by
4%. These stores enjoy higher margins than the convenience sector.
The Isle of Wight operation made good progress in terms of both sales and
margins and appears set to enjoy a better tourist season.
We continue to monitor and improve the estate. A new store has been purchased in
Ventnor in the Isle of Wight and an underperforming store in the Isle of Man
closed with the lease re-assigned. A new store on a Greenfield site in the Isle
of Man will open in the third quarter. The store in Mulcaster Street, Jersey was
successfully relocated to larger premises and converted to a SPAR convenience
store and two further Jersey stores will be converted to the SPAR brand in the
second half of the year.
Technology
Itex has made considerable progress during 2003 in very difficult market
conditions and a general malaise in the technology sector. Reduced costs as a
result of the restructuring undertaken in 2002 and a focus on Managed Services
are starting to bear fruit and drive the company towards profitability.
Customers' reduced economic confidence, particularly in the offshore financial
services sector, continues to delay capital investment commitments. Major
project expenditure therefore remains subdued, reflected in the falling turnover
of low margin hardware sales.
The growth in Managed Services business is the key characteristic with long term
contracted revenue ahead of expectations and showing real growth over 2002. Cost
pressures are forcing many businesses, particularly those in the finance sector,
to examine how they can deliver their IT requirements more economically and Itex
has been able to take advantage of this opportunity by offering an outsourced
alternative. As part of this drive, Itex opened a second phase of its Technology
Management Centre on the outskirts of St Peter Port and an additional facility
for Business Continuity is being made available in Guernsey.
The adoption of Managed Services in the public sector continues to expand, with
existing contracts to deliver to Jersey's primary and secondary schools being
augmented by the winning of "preferred supplier" status to Guernsey's schools.
Outlook
The Group has adapted to deal with the continuing difficult trading conditions.
Overall the Group is trading to plan for 2003 and is well placed to take
advantage of any economic upturn.
Senator F H Walker
Chairman
5 September 2003
- ends -
For further information, please contact:
The Guiton Group Limited 01534 611800
John Averty, Chief Executive
Rick McHattie, Finance Director
Weber Shandwick Square Mile 020 7067 0700
Nick Oborne or Louise Robson
THE GUITON GROUP LIMITED
Consolidated Profit and Loss Account
For the six months ended 30 June 2003
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6 months ended 6 months ended 12 months ended
30 June 2003 30 June 2002 31 December 2002
#'000 #'000 #'000
Unaudited Unaudited Audited
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Turnover
Continuing operations 34,563 35,565 71,730
Discontinued operations - 1,714 1,987
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34,563 37,279 73,717
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Operating profit before
goodwill charges 2,384 2,513 5,205
Amortisation and
impairment of goodwill (21) (110) (735)
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Operating profit/(loss)
Continuing operations 2,363 2,539 4,635
Discontinued operations - (136) (165)
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2,363 2,403 4,470
Discontinued operations
- Profit on disposal of
operations - 116 97
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Profit before interest and
taxation 2,363 2,519 4,567
Net interest payable (29) (125) (226)
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Profit on ordinary
activities before taxation 2,334 2,394 4,341
Taxation (488) (473) (969)
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Profit on ordinary activities
after taxation 1,846 1,921 3,372
Equity minority interests - (36) (152)
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Profit attributable to shareholders 1,846 1,885 3,220
Dividend proposed (959) (872) (2,235)
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Retained profit 887 1,013 985
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Net dividend per share 3.54p 3.22p 8.25p
Basic earnings per share 6.81p 6.96p 11.89p
Diluted earnings per share 6.80p 6.93p 11.85p
Adjusted earnings per share 6.89p 6.84p 14.14p
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THE GUITON GROUP LIMITED
Consolidated Balance Sheet
As at 30 June 2003
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30 June 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
Unaudited Unaudited Audited
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Fixed Assets
Intangible assets 16,147 16,714 16,090
Tangible assets 18,824 17,270 18,979
Investments 18 19 18
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34,989 34,003 35,087
Current Assets
Stock and work in progress 4,489 4,705 4,700
Debtors 7,741 9,637 8,646
Cash at bank and in hand - 52 2,249
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12,230 14,394 15,595
Creditors:
Amounts falling due within one year (10,250) (12,039) (12,148)
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Net Current Assets 1,980 2,355 3,447
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Total assets less current liabilities 36,969 36,358 38,534
Creditors:
Amounts falling due after more than
one year (488) (3,622) (2,938)
Provisions for liabilities and charges (199) - (201)
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Net Assets 36,282 32,736 35,395
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Equity Shareholders' Funds 34,943 31,698 34,056
Equity minority interests 1,339 1,038 1,339
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Capital Employed 36,282 32,736 35,395
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Approved by the Board of Directors on 5 September 2003.
THE GUITON GROUP LIMITED
Consolidated Cash Flow Statement
For the six months ended 30 June 2003
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6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
Unaudited Unaudited Audited
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Operating profit 2,363 2,403 4,470
Depreciation, amortisation and impairment 1,051 1,252 2,887
Decrease/(increase) in stock 211 (141) (186)
Decrease/(increase) in debtors 417 (10) 1,642
(Decrease)/increase in creditors (2,234) (191) 1,811
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Net cash inflow from operating activities 1,808 3,313 10,624
Returns on investments and servicing of
finance (92) (195) (333)
Taxation (1,228) (1,037) (1,247)
Capital expenditure and financial
investment (993) (1,415) (2,079)
Acquisitions and disposals (7) 730 888
Equity dividends paid (1,363) (1,238) (2,110)
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(Increase)/decrease in net debt in
the period (1,875) 158 5,743
Net cash/(debt) at beginning of period 449 (5,294) (5,294)
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Net (debt)/cash at end of period (1,426) (5,136) 449
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THE GUITON GROUP LIMITED
Statement of Total Recognised Gains and Losses
For the six months ended 30 June 2003
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6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
Unaudited Unaudited Audited
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Profit on ordinary activities after
taxation 1,846 1,921 3,372
Unrealised surplus on revaluation of
properties - - 2,386
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Total recognised gains for the period 1,846 1,921 5,758
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Reconciliation of Movement in Equity Shareholders' Funds
For the six months ended 30 June 2003
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Total recognised gains for the period 1,846 1,921 5,758
Dividends (959) (872) (2,235)
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887 1,049 3,523
Minority interests - (36) (152)
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Net addition to Equity Shareholders'
Funds during the period 887 1,013 3,371
Equity Shareholders' Funds at the
beginning of the period 34,056 30,685 30,685
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Equity Shareholders' Funds at the end
of the period 34,943 31,698 34,056
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Consolidated Note of Historical Cost Profits
For the six months ended 30 June 2003
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Reported profit on ordinary activities before
taxation 2,334 2,394 4,341
Realisation of property revaluation
gains of previous periods - - 444
Difference between historical cost
depreciation charge and actual depreciation
charge for the period 3 40 80
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2,337 2,434 4,865
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Historical cost profit for the period
retained after taxation, minority interests
and dividends 890 1,053 1,504
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THE GUITON GROUP LIMITED
Notes to the Financial Statements
For the six months ended 30 June 2003
1. Basis of preparation
The interim financial statements have been prepared on the same basis and in
accordance with the accounting policies adopted in the preparation of the
financial statements for the year ended 31 December 2002 and with United Kingdom
generally accepted accounting principles.
The comparative figures for the year ended 31 December 2002 have been extracted
from the audited financial statements for that year. These financial statements,
upon which the auditors have issued an unqualified opinion, have been filed with
the Registrar of Companies in Jersey.
2. Segmental analysis
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6 months ended 6 months ended 12 months ended
30 June 2003 30 June 2002 31 December 2002
Unaudited Unaudited Audited
Turnover Operating Turnover Operating Turnover Operating
Profit Profit Profit
#'000 #'000 #'000 #'000 #'000 #'000
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Continuing operations
Publishing 11,539 2,591 11,739 2,957 23,627 5,552
Retailing and Wholesaling 17,543 13 16,433 214 34,555 946
Technology 6,810 (220) 8,675 (522) 16,426 (1,128)
Less: Interdivisional
sales (1,329) - (1,282) - (2,878) -
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34,563 2,384 35,565 2,649 71,730 5,370
Amortisation and impairment
of goodwill
Retailing and Wholesaling - (21) - (18) - (38)
Technology - - - (92) - (697)
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34,563 2,363 35,565 2,539 71,730 4,635
Discontinued operations (note 3) - - 1,714 (136) 1,987 (165)
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34,563 2,363 37,279 2,403 73,717 4,470
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Turnover relates primarily to activities conducted in the Channel Islands and
Isle of Man therefore no geographical segmentation is provided.
3. Discontinued operations
Discontinued operations comprise the Commercial Printing division which was sold
on 5 March 2002 and the book printing operation of The Guernsey Press Company
Limited which ceased trading during the second half of 2002. The profit on
disposal of operations for the six months ended 30 June 2002 of #116,000 relates
to these operations.
Trading results for the first half 2002:
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Commercial Book
Printing Printing Total
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Turnover - including #70,000 interdivisional 630 1,154 1,784
Operating loss (119) (17) (136)
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4. Taxation
Provision has been made for taxation, including deferred taxation, at 20.7%
(2002: 20.2%) of profit on ordinary activities before amortisation and before
non-taxable gains or losses on disposals, the estimated effective tax rate for
the full year.
5. Dividends
An interim dividend of 3.54 pence per share net (2002: 3.22 pence) will be paid
on 3 October 2003 to shareholders on the Register of Members on 19 September
2003. This will absorb #958,973 (2002: #872,289).
6. Basic earnings per share
Earnings per share have been calculated on the profit for the period of
#1,846,000 (2002: #1,885,000) and the weighted average number of shares in issue
during the first six months of 2003 of 27,089,643 (2002: 27,089,643).
7. Diluted earnings per share
Diluted earnings per share are calculated by adjusting the weighted average
number of ordinary shares in issue to assume conversion of all dilutive
potential ordinary shares. The Group has only one category of dilutive potential
ordinary shares: those share options granted to employees where the exercise
price is less than the average market price of the Company's ordinary shares
during the period.
8. Adjusted earnings per share
Adjusted earnings per share have been calculated on the profit for the period
excluding amortisation and impairment of intangible assets, exceptional items
and related tax effects. They are produced as an additional performance measure.
--------------------------------------------------------------------------------
6 months 6 months 12 months
ended ended ended
30 June 2003 30 June 2002 31 December 2002
pence pence pence
Unaudited Unaudited Audited
--------------------------------------------------------------------------------
Basic earnings per share 6.81 6.96 11.89
Amortisation of intangible assets 0.08 0.40 2.71
Disposal of businesses - (0.52) (0.46)
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Adjusted earnings per share 6.89 6.84 14.14
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9. Analysis of changes in net cash/(debt)
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At Cash At
31 December 2002 Flow 30 June 2003
#'000 #'000 #'000
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Cash at bank and in hand 2,249 (3,675) (1,426)
Bank overdraft - - -
Bank loans due after one year (1,800) 1,800 -
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Total 449 (1,875) (1,426)
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10. Interim report
The interim report for the six months ended 30 June 2003 was approved by the
directors on 5 September 2003. The preceding financial information does not
constitute statutory financial statements as defined under S.240 of the United
Kingdom Companies Act 1985.
11. Distribution
This report will be distributed to all holders of the Company's ordinary shares.
Copies will also be available at the Company's registered office and on the
Company's website: www.guiton.co.uk
This information is provided by RNS
The company news service from the London Stock Exchange
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