TIDMSWP
RNS Number : 2672Q
SWP Group PLC
05 November 2012
SWP Group Plc
("SWP" or the "Group")
Final Results for the year ended 30 June 2012
SWP Group (AIM: SWP), the industrial engineering group, is
pleased to announce its final results for the year ended 30 June
2012.
Financial Highlights
n Earnings per share increased by 25% to 0.30p (2011 -
0.24p)
n Profits before tax GBP0.835M (2011 - GBP0.548M)
n Operating profits before exceptional costs, amortisation,
share based payments and royalty charge GBP1.52M (2011-
GBP2.04M).
n Operating profits after exceptional costs GBP1.12M (2011-
GBP0.85M).
n Group sales declined by 14.7% to GBP20.92M (2011 -
GBP24.53M).
n Crescent returned to profits of 6.7% net on sales which
increased by 27% compared to 2011.
n Plasflow achieved record sales (up 34% on 2011) due to the
flow of nuclear related activity.
n Dividend maintained at 0.075p per share (2011 - 0.075p per
share).
Operational Highlights
n Borrowings reduced by 18.4% at 30(th) June 2012 and a further
37% by 31(st) October 2012.
n Gross margins overall increased by 3% due to operating
efficiencies and improved business practices via improved contracts
management.
n Tighter cost controls applied to all business units.
Additional risk management controls applied.
n Ulva sales penetration into new international territories.
Divisional sales up 3.6%.
n Underperforming activities in Fullflow Spain and DRC reduced
in scale and/or exited from market. As a consequence Fullflow
turnover down 23%.
n Recruitment of key executives to promote international sales
growth within the key brands of Ulva and Fullflow.
For further information or enquiries please contact:
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
Tel office: 020 7418 8900
Chairman's Statement
Business Review
At last year's Annual General Meeting I was at pains to point
out to shareholders that the "project" led nature of our businesses
and in particular Ulva's in various parts of the world had led to
peaks and troughs in the timing of invoiced sales over which we had
little or no control. At that time we had only just learned of the
deferment of a major insulation supply contract in the Caspian
until 2014/2015 which we had expected would feature prominently in
the results for the year to 30(th) June 2012. This postponement
where our Ulvashield product is specified adversely impacted the
half year results to 31(st) December 2011 which, as already
reported, were little more than break even.
It is therefore pleasing to be able to report to shareholders
that in the second half of the year Ulva was able to deliver a
range of supply contracts that have allowed the Polymer Membrane
Division to record strong results which have contributed to the
overall respectability of the results for the Group as a whole for
the year ended 30(th) June 2012.
The activities of your Group continue to centre around the
leading niche brands of Ulva and Fullflow. Since 2008 it is fair to
say that Fullflow's home markets in the UK, France and particularly
Spain have been severely affected by economic recession with the
building and construction sectors having suffered more than most.
This has necessitated prompt and regular action to adjust the cost
base of each business in the face of weakening demand. It has also
forced management to assess and evaluate even more thoroughly the
"risks" involved in doing business in jurisdictions where it is
increasingly difficult to obtain credit insurance to ensure that we
receive payment for the work that we carry out.
Ulva is a leading niche player in the supply of polymer based
engineering solutions in the field of CUI management (Corrosion
Under Insulation) to an increasing number of oil and gas majors all
over the world. As Ulva continues to be specified for international
projects the introduction of our Site Services Team has enabled us
to play a greater role in the quality assurance aspects of the
projects, typically working directly for the specifying end user to
assist in the management and support of the application contractor
to ensure that precisely what is envisaged within discerning
specifications is delivered on the projects.
Fullflow as a leading supplier of siphonic roof drainage systems
by way of rainwater management has experienced a difficult year in
highly challenging market conditions. Recession hangs over its main
markets in the UK, France and in Spain where demand has declined
significantly. Fullflow's overall result at break even represents
its worst result in years and yet during the period significant
progress has been made in a number of critical areas which will
stand the business in good stead in the future. New senior
management has taken control of the business and considerable
progress has been made in terms of developing effective contracts
and risk management as well as improvements to operating
efficiencies. Significantly, Fullflow's horizons have extended
beyond the home markets into international territories which offer
potential for growth through strategic alliances in chosen markets
where there is a demonstrable appetite for Fullflow's products and
expertise.
Plasflow through its state of the art pipe welding facility
based in Rotherham has enjoyed its most successful trading year to
date on the back of a number of new contract successes in the
nuclear industry. This demonstrates Plasflow's ability to provide
engineering solutions which sets it apart from its competition. A
policy of continuous improvement has led to the award of ISO 14001
in respect of the Environmental Standard. Projects involve most of
the nuclear plants in the UK including Hinkley Point, Torness and
Hunterston with plans being made for major works to be carried out
at EDF Sizewell in Spring 2013. Plasflow's activity levels look set
to continue including, inter alia, fabrication to support
Fullflow's projects in the UK and Northern France. The management
team at Plasflow well deserve their recent success.
Crescent as one of the country's leading suppliers of metal
staircases has enjoyed a return to profit which resulted from sheer
drive, enthusiasm and the team's ability to innovate in market
conditions which remain seriously depressed. By broadening the
skill base within the product offering at Crescent the company has
taken on a larger share of the fabrication and finishing works
within certain projects which has allowed Crescent to compete where
in earlier years this would not have been possible. Well led by new
management greater emphasis is now being placed on focussed sales
and certain geographic target areas within the United Kingdom.
Against a background of muted demand and competitive pressures the
management team at Crescent is hungry for success and is striving
to maintain the momentum that has been created during this past
year.
Results
Turnover in the year to 30(th) June 2012 fell by 14.7% to
GBP20.92M (2011: GBP24.53M) due to lower activity within the
Fullflow Group across the board but in particular due to the
downturn in Spain and DRC's withdrawal from the roofing sector
during the year. Despite the postponement of a major supply
contract by over two years the Polymer Membrane Division managed to
maintain sales volume with an increase of 3.6.%
2012 2011
GBP'000 GBP'000
Turnover 20,922 24,526
Operating Profit 1,119 850
Profit Before Tax 835 548
Earnings Per Share 0.30p 0.24p
============= =============
Operating profits of GBP1.119M were recorded as compared to
GBP850K in the previous year (after the one time write off of
royalties). Under IFRS accounting these figures are stated after
adjustments relating to the amortisation of intangible assets
(GBP165K: 2011 GBP165K) and non-cash related share options (GBP42K:
2011 GBP38K). After financial interest and related derivative
charges for Letters of Credit and Performance Bonds of GBP284K
(2011: GBP318K) pre tax profits increased by 52% to GBP835K (2011
GBP548K).
Earnings per share after taxation advanced by 25% to 0.30p per
share (2011: 0.24p).
There are no further royalty payments to be made. The royalty
payments made in 2011 of GBP701,000 remain refundable by the
Liquidator of the Ulva business prior to the Group's acquisition of
Ulva on 28(th) November 2007. The terms are set out in an Asset
Purchase Agreement of that date and although the amount of
royalties paid remains a contingent asset which is not recognised
in these financial statements, we remain optimistic that they will
be recovered either in full or in part now that as expected all
creditors (including DRC) have received dividends of 100p/GBP in
respect of their debts.
Borrowings
A feature of SWP's corporate objectives remains the retirement
of debt. Bank debt at 30(th) June 2012 has fallen to GBP3.18M
(2011: GBP3.9M) or by 18.4%. More importantly strong cash
generation post 30(th) June 2012, at which time strong fourth
quarter sales had not yet been received in cash, has resulted in
net debt falling by 31(st) October 2012 to around GBP2M or by a
further 37%. This trend is likely to continue into 2013. Given that
our debt exceeded GBP7.5M at the onset of the recession in early
2008 we regard this as a major achievement against a background of
economic uncertainty and a reflection of the robust nature of the
business model to which we are operating.
The Group's Statement of Financial Position reflects a strong
balance sheet on which the future development of our brands will be
based. Both creditor and debtor days have reduced as has the
continued absorption of deferred tax assets and liabilities.
Generally, more effective cash management of working capital assets
and particularly a reduction in inventories has contributed towards
our aim of continuing our debt reduction programme to a
conclusion.
Dividend
Shareholders will recognise that we have a progressive dividend
policy at SWP. The continuing recessionary climate and the
difficulties faced in Fullflow's various home markets persuades
your Board to act with caution. We are not only committed to
achieving a debt free status but have plans to further invest in
process equipment within our Polymer Membrane Division which will
upgrade existing manufacturing efficiency as well as capacity and
extend Ulva's product offering to a wide array of international
customers. This future investment is designed to facilitate
growth.
For the above reasons and notwithstanding the Group's ability to
generate cash we have concluded that the reduced dividend that was
declared and paid last year should be maintained this year. The
Board therefore wishes to recommend the payment of a dividend of
0.075p per share (2011: 0.075p)
Taxation
As in earlier years the Group continues to benefit from the
utilisation of losses incurred before 2007 albeit on a reducing
basis as a consequence of the continuing underlying profitability
of the Group's activities. The tax charge referred to reflects to a
large extent UK corporation tax of GBP217K out of a total charge of
GBP227K, the difference being the net movement on overseas tax and
deferred tax which has been computed by reference to the downward
adjustment to the rate of corporation tax now applicable in the
UK.
Strategy
The Group's strategic development has been influenced by the
depth of the recession within Fullflow's markets in the UK, France
and Spain plus the need to restructure and optimise controls within
each Fullflow business including Plasflow. This has taken time to
achieve and has required considerable effort on the part of the
Group's senior management to procure.
The business development at Ulva was always going to take time
for the seeds which were sown over the past three or four years to
reach an appropriate stage for harvesting. Ulva is a highly
differentiated business operating in niche markets to a high level
of technical competence and requires the relevant technical
resources to support its development.
With the support of our brands at Plasflow and Crescent it
remains our strategic aim to place significant resources behind our
principal brands at Ulva and Fullflow both of whom have the
capabilities, ambitions and technical expertise to grow in
international markets where there are signs of considerable
appetite for the products and services which we offer. For this
reason shareholders can expect that the Group will continue to
pursue opportunities in the established home markets but that
further growth is likely to be derived from expansion abroad.
Corporate Governance
Wherever practical the Group is committed to the principles set
out in the UK Corporate Governance Code to the extent that they are
relevant to a business of our size. Staff appraisal reports are
prepared annually at each operating unit, our Remuneration and
Audit Committees meet at least on two occasions each financial year
whilst monthly management meetings at subsidiary level are enhanced
by Group Board meetings held on a quarterly or as required
basis.
People
It is perhaps in these difficult times when management is put to
the ultimate test. The recession has been long and arduous but in
many ways SWP has weathered this difficult period well and
established a relatively mean and lean organisation as a platform
for the future. Over the past twelve months SWP has strengthened
its various management teams with new experienced, as well as
talented, executives and as referred to in the Operational Review
below is committed to professional selling on an international
basis and to providing the necessary support and training to
achieve a professional approach to specification selling.
To all of our loyal and hard working employees we as a Board
offer our thanks for the innovation, resilience and determination
to succeed in difficult market conditions. Their dedication is much
appreciated. We have many challenges in front of us and even more
opportunities for the profitable development and enhancement of our
Group.
Earnings per share
Basic and fully diluted earnings per share increased by 25% to
0.30p (2011 - 0.24p).
Prospects
The results for the year to 30(th) June 2012 whilst not up to
our original expectations were highly respectable given the
disappointment caused by the postponement until 2014/2015 of a
major contract we had been expecting Ulva to deliver in the first
half of the year.
The recovery in the second half of the year was highly
encouraging and the level of cash generated during the year and
indeed after the year end provides the confidence that we shall
achieve our ambition to be debt free or in net cash before
long.
The Group is poised for growth. We have shed underperforming
activities and adopted effective controls to the way in which we
choose to conduct business going forward. New talent is making an
impact and we are investing in resources to back and promote our
principal brands to grow internationally.
Whilst we aspire to grow our businesses globally on an organic
basis we recognise that the forging of strategic alliances and the
conversion of specifications into orders and sales takes time. Much
of our current focus is dedicated to the delivery of medium to long
term growth in our chosen areas of expertise.
The current year is expected to be no less challenging than in
recent times. It may follow a similar trading pattern to 2011/2012
with delivery of a series of projects over which we have
transparency in the second half of year. Despite the many economic
uncertainties in global markets and in particular Europe the Group
has made improvements to the operating efficiencies within the
businesses and we are looking forward with confidence to making
further progress in the year ahead.
Alan Walker
Chairman
Operational Review
Operations Review
The most important aspect in the development of the Group during
the last twelve months has been success in recruiting a small
number of employees into key leadership and selling roles. With the
exception of two vacancies within the Ulva business the Group today
is fully and appropriately staffed with an effective mix of
"Pillars" and "Movers & Shakers". The combination of new talent
and ideas with the experience base of long serving loyal employees
means that for the first time since I joined the group in October
2006, I feel confident that we have the people and skills to drive
the Group forward in a highly focused way. Investment is now being
made in our people in terms of training and development,
particularly in the area of professional selling.
The necessary investment that has been made during the past two
years in restructuring the Group's construction related businesses
has meant that not only have the businesses survived, whilst a
number of competitors have fallen by the wayside or are at risk,
but when combined with the effectiveness of smaller but smarter
employee teams these businesses are equipped to reach out to new
market areas at a time when domestic markets remain static at
best.
The 14.7% decline in Group revenues against the previous year is
not representative of the level of preparedness of the businesses
to move forward in FY 2013 and was disproportionately affected by
the almost total collapse of the construction sector in Spain
combined with DRC's withdrawal from the roofing sector during the
year.
The project based nature of the Group's activities was again
demonstrated by the quite dramatic differences between first and
second half revenues, a phenomenon that has been observed
previously and is very likely to be seen again.
SWP's construction related businesses are fit and healthy and
well positioned to be rewarded when their domestic markets recover.
The solid foundations within these businesses are allowing
management's aspirations to once again focus on growth through
diversification and international markets. Ulva continues to sow
the seeds for growth in order to move beyond the plateau of the
last three years.
In addition to the investment in our people, capital investment
is planned in new process equipment and new complementary products
within Ulva and on a smaller scale within Fullflow.
Crescent
The support that has been given to this business unit in recent
years was rewarded with a return to profit in the period. Revenues
grew by 27% returning an operating profit on sales of 6.7%. The
business is smaller in scale than it was before the recession took
hold but the quality of the product, the technical competence of
the engineering, manufacturing and installation staff, and the
strength and reputation of the brand remain intact. The employee
team has taken great pride and satisfaction in the result for the
year and is motivated to consolidate this achievement, remaining
viable in a reduced market.
Crescent has extended its offering along the supply chain by
applying its core competences to an extended range with good
project management and high quality standards very much to the
satisfaction of its customers. Crescent has traditionally focussed
entirely on staircase activity only but its proven expertise
extends to other fabrication and finishing works and it has been
the application of these additional skills in order to undertake a
more substantial element of an overall project that has provided
the business with its much needed boost.
There is an appetite for further success in the Crescent team
with a good and well-motivated sales team eyeing an enlarged market
potential. The lumpy nature of project demand suggests a slower
first half and stronger second half in the year ahead.
Fullflow
The continued decline in the Spanish economy adversely impacted
upon Fullflow's performance in the year under review. Overall
revenues declined by 23%. A significant re-organisation of the
Spanish business was undertaken during the year resulting in
exceptional operating costs of GBP178K. Post year-end further
action has been taken to limit the Group's risk exposure to the
Spanish economy.
Effective new leadership of the Fullflow Group combined with a
new sales force in the UK, allied to the experienced core team has
generated reasons for optimism.
Great progress has been made in developing the contracts
management aspects of the business in order to reduce exposure to
risk, ensure payment is received and to account properly for
substantial variations without "nickel and diming" customers.
Customer response has been positive to this approach and when
combined with Fullflow's longevity and reputation for quality, it
is providing compelling reasons for customers to want to do
business with Fullflow.
The UK and French businesses are on solid foundations and the
Spanish business is undergoing further restructuring to place it on
a similar footing. From this stable platform in its home markets
Fullflow is well positioned to focus on re-developing its presence
in international markets, particularly for prestigious airports and
stadia.
Operational efficiencies have been gained by Plasflow providing
the pre-fabrication and project kitting service to all Fullflow
projects in the UK and the North of France. Significant progress
has been made in value engineering the Fullflow system and
negotiating reduced material prices and investment is being made in
the development of a unique technology that will further
substantially reduce the cost and time associated with the
installation of systems on site.
Plasflow made an important step forward as key nuclear energy
sector projects that had been long anticipated, flowed during the
year. In many ways Plasflow matured during the year, coping well
with the increased activity levels, delivering a high quality
standard with high customer satisfaction. The increased activity
levels are projected to continue for the foreseeable future and
management is searching for opportunities to take Plasflow's core
competences to an enlarged market.
Polymer Membrane Division
Ulva
The year under review describes a performance that is quite
similar to the prior two years in terms of the scale of the
business and the influence of the timing of major projects
resulting in substantial differences between the first and second
half financial performances of the year.
Ulva's revenue generation has been more or less consistent
during the last three years which might attract the comment that
the business has plateaued. However, it should be recognised that
approximately 90% of Ulva's revenues are generated from oil and gas
related new build projects. For revenues to remain constant it is
necessary to continuously win new projects, which Ulva has achieved
not only within its traditional markets but also with new customers
and in new geographic locations. Progress to date, for example in
the United States, has generated sufficient confidence for Ulva to
create a trading entity with an enhanced calibre of directly
employed staff.
What has become all too evident, however, is that the Ulva team
is too small to deliver the growth levels that we aspire to. In
effect, the business has been constrained by its resource levels
with the sales team spending more time in project management roles,
ensuring that the quality of application is high on existing
projects, than it has generating new business. This problem was
alleviated somewhat by the creation of the Site Services Team
(SST), which has proven to be much in demand. However, a small
number of high quality individuals are still required to enable
Ulva to translate the good success that it has achieved in gaining
corporate specifications into new project specifications. The
available market for Ulva is substantial and there is good
visibility of the pipeline of projects ahead. Investment in the
right resource, and the time for it to become effective, will see
Ulva grow significantly in the future.
The Ulva operations team has done particularly well to provide
continuously high levels of quality and service despite the lumpy
"feast and famine" pattern of demand.
The Polymer Membrane Division is planning an important
investment to renew and upgrade the process line for the
manufacture of Ulva products with significant advances in future
capability and efficiency. Concurrently, Ulva is planning to invest
in an additional and complementary range of products to further
support the Group's aspirations for future growth.
DRC Polymer Products
DRC has been a business that has struggled for many years.
Notwithstanding the best efforts of management, market conditions
have consistently failed to reward the business.
Despite significant investment in the development of a Hylam
Uniroof product based upon an alternative compound to
Chlorosulphonated Polyethylene following its 140% price increase,
DRC has been unable to achieve a satisfactory product performance
for alternative polymers at a commercially attractive price and has
been forced to exit the paper backed roofing laminate market. The
exit was accelerated by the failure of DRC's marketing and
distribution partner.
The concept of the Hylam IQ intelligent membrane system has
failed to capture the attention of the UK water utilities in any
meaningful way and the small volumes of available work were not
attractive to DRC, lacking critical mass. The product has failed to
become commercially viable and DRC has exited this market.
The key role of DRC today is the manufacture of Ulvashield and
the Drinking Water Inspectorate (DWI) approved Hylam FPA membrane
for potable water applications which is now sold exclusively
through a close relationship with an application partner.
Health and Safety
SWP's Group Health and Safety team continues to 'raise the bar'
and there were no reported incidents in the year under review.
Colin Stott
Group Managing Director
Consolidated Statement of Comprehensive Income
Year ended 30 June 2012 2012 2011
GBP'000 GBP'000
Continuing operations
Revenue 20,922 24,526
Cost of sales (11,934) (14,913)
---------- ---------
Gross profit 8,988 9,613
Operating expenses (7,466) (7,572)
---------- ---------
1,522 2,041
Exceptional operating expenses (196) (287)
Amortisation of intangible assets
acquired through business combinations
net of deferred tax (165) (165)
Share based payment (42) (38)
---------- ---------
Operating profit before royalty 1,119 1,551
Royalty - (701)
---------- ---------
Operating profit 1,119 850
Financial income - 16
Financial costs (284) (318)
---------- ---------
Profit on ordinary activities before
taxation 835 548
Income tax charge (227) (78)
---------- ---------
Profit for the year 608 470
========== =========
Total comprehensive income
Profit for the year and total comprehensive
income attributable to equity holders
of the company 608 470
========== =========
Basic earnings per share (pence) 0.30p 0.24p
---------- ---------
Diluted earnings per share (pence) 0.30p 0.24p
---------- ---------
Turnover and operating profit all derive from continuing
operations.
There were no recognised gains and losses for 2012 or 2011 other
than those included in the Group Income Statement.
Consolidated Statement of Changes in Equity
Called Other Revaluation Retained Total
up share reserves reserve earnings Equity
capital
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 30 June 2010 1,016 41 229 13,256 14,542
Result for the
year - - - 470 470
Dividend - - - (402) (402)
Share based payment - 38 - - 38
Purchase of treasury
shares - - - (188) (188)
---------- ---------- -------------- ---------- --------
At 30 June 2011 1,016 79 229 13,136 14,460
Result for the
year - - - 608 608
Dividend - - - (151) (151)
Share based payment - 42 - - 42
Purchase of treasury
shares - - - (114) (114)
---------- ---------- -------------- ---------- --------
At 30 June 2012 1,016 121 229 13,479 14,845
Consolidated Statement of Financial Position
At 30 June 2012 2012 2011
GBP'000 GBP'000
Non current assets
Intangible assets 8,310 8,550
Property, plant and equipment 5,525 5,635
Trade and other receivables 504 587
Deferred tax assets 472 624
Investment 50 -
--------- ---------
14,861 15,396
--------- ---------
Current assets
Inventories 2,983 3,795
Trade and other receivables 8,445 6,775
11,428 10,570
--------- ---------
Total assets 26,289 25,966
--------- ---------
Current liabilities
Trade and other payables (5,724) (5,046)
Current tax liabilities (371) (189)
Obligations under finance leases (10) (14)
Bank loans and overdrafts (1,895) (1,408)
--------- ---------
(8,000) (6,657)
--------- ---------
Non current liabilities
Bank loans (1,285) (2,488)
Deferred tax liabilities (2,147) (2,361)
Obligations under finance leases (12) -
--------- ---------
(3,444) (4,849)
--------- ---------
Total liabilities (11,444) (11,506)
--------- ---------
Net assets 14,845 14,460
========= =========
Equity
Called up share capital 1,016 1,016
Other reserves 121 79
Revaluation reserve 229 229
Retained earnings 13,479 13,136
--------- ---------
Equity attributable to shareholders
of the parent 14,845 14,460
========= =========
Consolidated Statement of Cash Flows
Year ended 30 June 2012
2012 2011
GBP'000 GBP'000
Profit after tax 608 470
Adjustments for:
Net finance costs 281 302
Corporation tax charge 231 154
Depreciation of property, plant
and equipment 286 294
Amortisation of intangible assets 240 249
Loss/(profit) on disposal of plant
and equipment 1 (1)
---------- ---------
Operating cash flows before movement
in working capital 1,647 1,468
Decrease(increase) in inventories 812 (103)
(Increase)/decrease in receivables (1,587) 2,492
Increase/(decrease) in payables 671 (2,402)
Interest paid (284) (321)
Interest received - 16
Corporation tax paid (49) (178)
---------- ---------
Net cash inflow from operating
activities 1,210 972
---------- ---------
Cash flow from investing activities
Purchase of property, plant and
equipment (192) (191)
Investments (50) -
Proceeds from disposals of property,
plant and equipment 5 39
---------- ---------
Net cash outflow from investing
activities (237) (152)
---------- ---------
Cash flow from financing activities
Dividend paid (151) (402)
Bank loans received - 450
Bank loans repaid (1,314) (659)
Purchase of treasury shares (114) (188)
Finance lease repayments, net 8 (34)
---------- ---------
Net cash outflow from financing
activities (1,571) (833)
---------- ---------
Net increase in cash and bank
overdrafts (598) (13)
Cash, cash equivalents and bank
overdrafts at
beginning of year (316) (303)
---------- ---------
Cash, cash equivalents and bank
overdrafts at end of year (914) (316)
========== =========
Notes to the Financial Statements
1. BASIS OF PREPARATION
Whilst the information included in this final results
announcement has been prepared in accordance with the recognition
and measurement criteria of International Financial Reporting
Standards ("IFRSs") as adopted for use in the European Union and as
issued by the International Accounting Standards Board, this
announcement does not itself contain sufficient information to
comply with IFRSs.
The final results announcement for the 12 months to 30 June 2012
has been prepared on a consistent basis with the financial
accounting policies set out in the Accounting Policies section of
the SWP Group Plc Annual Report and Financial Statements 2011.
2. SEGMENTAL REPORTING
BUSINESS SEGMENTS
Rainwater Metal staircases Polymer Corporate Total
management year ended membrane year ended year ended
year ended 30 June year ended 30 June 30 June
2012 30 June 2012 30 June 2012 2012
2012 2012
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue
External revenues 11,229 2,254 7,439 - 20,922
Intergroup sales 2,215 1 1,566 - 3,782
------------ ----------------- ------------ ------------ ------------
Total revenues 13,444 2,255 9,005 - 24,704
Cost of sales (9,119) (1,425) (5,172) - (15,716)
------------ ----------------- ------------ ------------ ------------
Gross profit 4,325 830 3,833 - 8,988
Operating expenses (4,300) (660) (1,735) (771) (7,466)
------------ ----------------- ------------ ------------ ------------
25 170 2,098 (771) 1,522
Exceptional operating
expenses (178) (18) - - (196)
Amortisation of intangible
assets acquired through
business combinations
net of deferred tax - - - (165) (165)
Share based payment - - - (42) (42)
Intergroup royalty (charge)/income - - (1,136) 1,136 -
Intergroup management
fees - - (228) 228 -
Intergroup rent (charges)/income - - (72) 72 -
Operating profit (153) 152 662 458 1,119
Financial income
Financial costs (52) - (1) (231) (284)
Intergroup financial
charges (27) - (60) 87 -
------------ ----------------- ------------ ------------ ------------
Profit on ordinary activities
before taxation (232) 152 601 314 835
Income tax (charge)/credit (85) (24) (154) 36 (227)
------------ ----------------- ------------ ------------ ------------
Profit for the year attributable
to equity holders of
the company (317) 128 447 350 608
============ ================= ============ ============ ============
2012 Rainwater Metal Polymer Corporate Intragroup Total
management staircases membrane year ended year ended year ended
year ended year ended year ended 30 June 30 June 30 June
30 June 30 June 30 June 2012 2012 2012
2012 2012 2012
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Other information
Capital expenditure 58 - 90 44 - 192
Depreciation and
amortisation 79 49 132 266 - 526
Segmental assets 10,990 2,456 8,125 17,216 (12,498) 26,289
Segmental liabilities (5,339) (981) (6,373) (11,249) 12,498 (11,444)
------------- ------------ ------------ ------------ ------------ ------------
Net assets as at
30 June 2012 5,651 1,475 1,752 5,967 - 14,845
============= ============ ============ ============ ============ ============
2011 Rainwater Metal staircases Polymer Corporate Total
management year ended membrane year ended year
year ended 30 June year ended 30 June ended
30 June 2011 30 June 2011 30 June
2011 2011 2011
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue
External revenues 14,666 1,768 8,092 - 24,526
Intergroup sales 3,341 123 598 - 4,062
------------ ----------------- ------------ ------------ ---------
Total revenues 18,007 1,891 8,690 - 28,588
Cost of sales (12,464) (1,422) (5,089) - (18,975)
------------ ----------------- ------------ ------------ ---------
Gross profit 5,543 469 3,601 - 9,613
Operating expenses (4,331) (730) (1,754) (757) (7,572)
------------ ----------------- ------------ ------------ ---------
1,212 (261) 1,847 (757) 2,041
Exceptional operating
expenses (156) (13) (52) (66) (287)
Exceptional items - - - (701) (701)
Amortisation of intangible
assets acquired through
business combinations
net of deferred tax - - - (165) (165)
Share based payment - - - (38) (38)
Intergroup royalty (charge)/income - - (1,428) 1,428 -
Intergroup management
fees - - (228) 228 -
Intergroup rent (charges)/income - - (72) 72 -
Operating profit 1,056 (274) 67 1 850
Financial income 16 - - - 16
Financial costs (85) (1) (3) (229) (318)
Intergroup financial
charges (27) - (60) 87 -
------------ ----------------- ------------ ------------ ---------
Profit on ordinary activities
before taxation 960 (275) 4 (141) 548
Income tax (charge)/credit (293) 21 (45) 239 (78)
------------ ----------------- ------------ ------------ ---------
Profit for the year attributable
to equity holders of
the company 667 (254) (41) 98 470
============ ================= ============ ============ =========
2011 Rainwater Metal staircases Polymer Corporate Intragroup Total
management year ended membrane year ended year ended year ended
year ended 30 June year ended 30 June 30 June 30 June
30 June 2011 30 June 2011 2011 2011
2011 2011
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Other information
Capital expenditure 65 - 68 58 - 191
Depreciation and
amortisation 94 72 128 249 - 543
Segmental assets 12,206 2,437 6,709 16,955 (12,341) 25,966
Segmental liabilities (6,084) (1,065) (5,388) (11,310) 12,341 (11,506)
------------ ----------------- ------------ ------------ ------------ ------------
Net assets as at 30
June 2011 6,122 1,372 1,321 5,645 - 14,460
============ ================= ============ ============ ============ ============
The Board has determined the operating segments based on the
reports reviewed by the Board that are used to make strategic
decisions. The board reviews the results of each entity within the
group on a regular basis and accordingly each entity is deemed to
be an operating segment. The operating segments have been
aggregated into the reportable segments disclosed above in
accordance with IFRS 8 Operating Segments.
The Board is provided with financial reports for each of the
reportable segments above on a regular basis. The United Kingdom is
the home country of the group.
The Directors consider that certain entities within the group
constitute an operating segment as information about each company
is regularly presented to the Board.
Sales between segments are carried out at arm's length. The
revenue from external parties reported to the board is measured in
a manner consistent with that in the statement of comprehensive
income.
The amounts provided to the Board with respect to total assets
and total liabilities are measured in a manner consistent with that
of the consolidated financial statements. Assets are allocated
based on the operations of the segment and the physical location of
the asset. Liabilities are allocated based on the operations of the
segment.
Information in respect of revenues from external customers and
detailed splits of revenues between individual foreign countries
has not been disclosed. This type of information is not presented
to the board when making strategic decisions and is not readily
available.
There were no Clients or contract representing more than 10% of
Group revenue in the current year within the Rainwater Management
Division. There was, however, one supply agreement in the year with
Ulva where the revenue was GBP2.7M which is more than 10% of Group
revenues.
The accounting policies note for revenue gives further
information about the classifications of revenue between the
business segments for this and the comparative year. The rainwater
management segment is construction contract based in nature and its
revenue is accounted for in accordance with IAS11, Construction
Contracts, additionally certain contracts included in the Polymer
Membrane segment are accounted for as construction contracts. The
staircases and polymer membrane segments relate principally to the
supply of goods, accounted in accordance with IAS18, Revenue. The
supply of services for these segments is incidental to the supply
of goods.
The aggregate amount of costs incurred on construction contracts
in progress at the balance sheet date is GBP1,464,000 (2011:
GBP1,045,000).
The aggregate amount of recognised profits incurred on
construction contracts in progress at the balance sheet date is
GBP466,000 (2011: GBP444,000).
GEOGRAPHICAL SEGMENTS
The Group's operations are located in the UK, France and
Spain.
The following table provides an analysis of the Group's sales by
geographical market, irrespective of the origin of the
goods/services
Year ended Year ended
30 June 2012 30 June 2011
GBP'000 GBP'000
UK 9,498 10,641
Rest of Europe 6,576 8,082
Far East 3,359 3,299
Africa and Middle East 768 2,161
USA 721 318
Australasia - 25
-------------- --------------
20,922 24,526
============== ==============
The following is an analysis of the carrying amount of segment
net assets and additions to property, plant and equipment and
intangible assets, analysed by the geographical area in which the
assets are located.
Carrying Additions to
amount of property, plant
segment assets and equipment
and intangible assets
Year ended Year ended Year ended Year ended
30 June 30 June 30 June 30 June
2012 2011 2012 2011
GBP'000 GBP'000 GBP'000 GBP'000
UK 13,766 12,855 164 175
France 957 942 28 7
Spain 122 663 - 9
----------- ----------- ------------ -----------
14,845 14,460 192 191
=========== =========== ============ ===========
3. ROYALTIES
Included within the Consolidated Statement of Comprehensive
Income was a royalty payment of GBP701k in the 2011 comparatives.
This payment was made under the terms of the trade and Asset
Purchase Agreement for Ulva Limited entered into in 28 November
2007 and which gave rise to a GBP6.175m fair value gain in the June
2008 financial statements under IFRS3 (Business Combinations).
Under the terms of this agreement a royalty payment related to
income for the three years to 30 November 2010 would be payable in
the event that sufficient assets had not been realised by the
liquidator, from whom the trade and assets of Ulva Limited were
purchased, to repay creditors in full.
In prior years the Directors were of the opinion that the
chances of this liability crystallising were remote however during
the year ended 30 June 2011 the liquidator requested payment. This
amount will be repaid from any excess funds available at the
conclusion of the liquidation process and hence is a contingent
asset. Given the uncertainty concerning the amount of available
funds the Directors do not consider it appropriate to recognise the
contingent asset and have therefore expensed the payment in the
year to 30 June 2011. No further amounts are due by SWP under the
terms of the Asset Purchase Agreement.
4. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the profit
attributable to equity holders of the Parent Company by the
weighted average number of ordinary shares in issue during the
year.
Diluted earnings per share is calculated by dividing the profit
attributable to equity holders of the Parent Company by the
weighted average number of ordinary shares in issue during the year
shares plus the weighted average number of ordinary shares that
would be issued on conversion of all the dilutive potential
ordinary shares into ordinary shares.
Treasury shares are deducted from total shares in issue for the
purposes of calculating earnings per share.
The basic earnings per share is 0.30p (2011 - 0.24p).
The diluted earnings per share is 0.30p (2011 - 0.24p).
The basic earnings per share calculation for the year ended 30
June 2012 is based on the weighted average of 196,586,376 (2011 -
198,495,965) ordinary shares in issue during the year and the
profit of GBP608,000 (2011 - GBP470,000).
The diluted earnings per share calculation for the year ended 30
June 2012 is based on the weighted average of 201,086,376 (2011 -
198,690,903) ordinary shares in issue during the year and the
profit of GBP608,000 (2011 - GBP470,000).
A copy of the financial report and accounts will be dispatched
to shareholders by no later than 3(rd) December 2012 and a copy
will also be available on the Group's website,
www.swpgroupplc.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR BRBDBSGGBGDD
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