RNS Number : 0751D
Omega International Group PLC
10 September 2008
Immediate Release 10 September 2008
OMEGA INTERNATIONAL GROUP PLC
INTERIM RESULTS
Omega International Group PLC, a leading UK manufacturer of branded kitchen furniture, today announces its interim results for the six
months to 27 June 2008.
FINANCIAL HIGHLIGHTS
6 months2008 6 months2007
� Revenue + 10% �17.9m �16.3m
� Pre tax profit + 4% �4.0m �3.8m
� Basic earnings per share + 7% 10.2p 9.5p
� Interim dividend per share + 4% 0.94p 0.9p
� Net assets per share + 37% 100.0p 73.0p
� Net cash �4.02m �1.02m
* Purchase of 3.42 acres of land adjacent to the existing factory, taking total freehold area to 21 acres and providing future
expansion potential of up to 95,000 sq ft.
* New products launched into all three brands during the first half, strengthening competitive position.
Commenting on the results Chairman, Bob Murray, said:
"I am delighted to report a positive set of results for the first six months of the year.
Whilst the economic environment is undoubtedly challenging, the fundamental strengths of the Group remain unchanged. We have a robust
business model, the balance sheet is strong and we continue to take market share. The Board remains confident in its strategy for growth and
in the prospects for the Group going forward. "
For further information, please contact:
Omega International Group plc: Tel: 01405 743 333
Francis Galvin: Group Chief Executive
Buchanan Communications: Tel: 020 7466 5000
Mark Edwards
Nicola Cronk e-mail: nicolac@buchanan.uk.com
Notes to editors:
The Group's core business is the design, manufacture and marketing of branded kitchen furniture through three main brands: Sheraton,
Omega and Chippendale. These three brands are sold mainly through independent kitchen specialist outlets throughout the UK.
The Group's manufacturing, distribution and sales facilities are located in its purpose built factory complex in Thorne, Doncaster,
adjacent to the M18 motorway.
Chairman's statement
Interim results 2008
I am delighted to report a positive set of results for the first six months to 27 June 2008. The Group remains committed to its medium
term growth plan in which it is actively investing.
Whilst market conditions have progressively deteriorated compared to the more buoyant conditions of last year, the Group has once again
succeeded in growing its business in a difficult economic environment.
Revenue for the first half of 2008 was �17.9 million, 10% higher than the same period last year (2007: �16.3 million).
Input prices remain under pressure, particularly from our European sources. This has been compounded by the strength of the Euro
resulting in an adverse impact in excess of �0.5 million on our profitability in the first six months when compared with 2007.
Despite these significant cost issues the Group increased profit before tax by 4% to �4.0 million (2007: �3.8 million). Operating profit
was �3.9 million (2007: �3.8 million) with the resulting operating margin of 22% (2007: 23%). Without adverse currency movements, operating
margin would have increased to 25%. Basic earnings per share rose 7% to 10.2p (2007:9.5p). Forward Euro purchases to mid 2009, are expected
to contain the adverse currency impact over the next year. Price increases of 5% were successfully implemented on our three brands between
April and June 2008 which we expect to contribute to our profitability in the second half.
Cash generation continues to be strong and the Group remains debt free. Following the purchase of adjacent freehold land for �1.3
million in the first half, net cash at the end of the period was �4.0 million.
I am pleased to report that the Board has approved an increase of 4% in the interim dividend this year to 0.94p per share (2007: 0.9p)
payable on 9 January 2009.
As already stated, we are continuing with our programme of investment for our long term future growth. We have purchased the freehold
of 3.42 acres of land adjacent to the existing factory, taking our total freehold area to 21 acres. Whilst we have comfortable headroom in
our medium term production capacities this additional land will provide future expansion potential of up to 95,000 sq ft resulting in a
single operational area of up to 410,000 sq ft .
Our investments in the marketplace continued during the first half, obtaining new display dealers and updating the display base at
existing customer outlets. New products were launched into our Sheraton brand in April and into our Omega and Chippendale brands during
June, strengthening our competitive position.
Towards the end of this year, we will be launching a new brand of kitchen furniture, our first for six years. As announced at the AGM
there will be an exceptional cost of around �0.6 million contained within the 2008 full year results relating to the upfront investment. The
Board sees this as a significant new opportunity for incremental sales on which we will update the market in due course.
Whilst we managed to grow sales in the first half we are now seeing a more noticeable effect from the credit squeeze and the downturn in
the economy. These two factors have led to a slowdown in activity both in the new build housing sector and on the high street. As a result
dealer showrooms are seeing less traffic and also a lengthening in the quote to order cycle.
Whilst we expect some uplift from home improvements - where home owners are choosing to improve their properties rather than move - the
outlook overall remains challenging as market conditions weaken.
Since our AGM trading statement in early June we have seen a marked downturn in order intakes. Sales in the first two months of the
second half year were down 15% on the comparative period, although it should be noted that this is included an exceptionally strong
performance in July last year.
The economic environment is unlikely to improve in the short term and we therefore anticipate trading in both the second half and full
year to be below 2007 levels. A number of management initiatives have been implemented in an effort to manage the business more prudently,
in these challenging economic conditions.
The fundamental strengths of the Group remain unchanged. We have a robust business model, the balance sheet is strong and we continue to
take market share from our competitors. The Board remains confident in its' strategy for growth and in the prospects for the Group going
forward.
R S Murray CBE FCCA
Chairman
10 September 2008
Consolidated income statement Unaudited Unaudited Audited
for the six months ended 27
June 2008
six months to six months to year ended
27 June 26 June 31 December
2008 2007 2007
Notes �'000 �'000 �'000
Revenue 2 17,923 16,342 33,650
Cost of sales (8,847) (8,139) (16,629)
Gross profit 9,076 8,203 17,021
Other operating expenses (5,166) (4,362) (8,975)
Operating profit 3,910 3,841 8,046
Finance income - bank 101 5 49
Finance costs - bank - (5) (6)
101 - 43
Profit before income tax 4,011 3,841 8,089
Income tax expense 3 (1,136) (1,190) (2,401)
Profit for the period 2,875 2,651 5,688
Earnings per share (pence) 4
Basic 10.2 9.5 20.3
Diluted 10.1 9.4 20.2
All results presented above arise from continuing operations and are wholly attributable to the equity shareholders of the Company.
There is no material difference between reported and historical cost profits and losses.
Consolidated statement of Unaudited Unaudited Audited
recognised income and expense
for the six months ended 27 June
2008
six months to six months to year ended
27 June 26 June 31 December
2008 2007 2007
�'000 �'000 �'000
Profit for the period 2,875 2,651 5,688
Deferred tax on share-based (5) 140 (240)
payments
Deferred tax on revaluation of (46) 50 (877)
land and buildings
Remeasurement of deferred tax
for change in UK tax rate - - 250
Unrealised surplus on
revaluation of freehold land and - - 3,221
buildings
Total recognised income for the 2,824 2,841 8,042
period
Consolidated balance sheet Unaudited Unaudited Audited
27 June 2008
27 June 26 June 31 December
2008 2007 2007
Note �'000 �'000 �'000
Non-current assets
Intangible assets 170 96 135
Property, plant and equipment 24,367 19,211 22,969
24,537 19,307 23,104
Current assets
Inventories 4,644 4,381 4,546
Trade and other receivables 6,757 6,369 5,192
Cash and cash equivalents 4,016 1,019 3,804
15,417 11,769 13,542
Total assets 39,954 31,076 36,646
Liabilities
Non-current liabilities
Other non-current liabilities 13 38 25
Deferred income tax 3,622 2,457 3,604
liabilities
3,635 2,495 3,629
Current liabilities
Trade and other payables 6,967 7,048 6,216
Current income tax liabilities 1,070 1,256 722
8,037 8,304 6,938
Total liabilities 11,672 10,799 10,567
Net assets 28,282 20,277 26,079
Equity
Ordinary shares 2,824 2,776 2,824
Share premium 2,058 1,563 2,058
Other reserves 10,953 8,432 10,963
Retained earnings 12,447 7,506 10,234
Total equity 6 28,282 20,277 26,079
Consolidated cash flow Unaudited Unaudited Audited
statement
for the six months ended 27
June 2008
six months to six months to year ended
27 June 26 June 31 December
2008 2007 2007
Note �'000 �'000 �'000
Cash flows from operating
activities
Cash generated from operations 7 3,336 3,936 8,476
Interest received 97 6 42
Interest paid - (3) (6)
Income tax paid (822) (930) (2,299)
Net cash inflow from operating 2,611 3,009 6,213
activities
Cash flows from investing
activities
Purchase of property, plant (2,146) (2,850) (3,328)
and equipment
Proceeds from sale of 1 3 19
property, plant and equipment
Net cash used in investing (2,145) (2,847) (3,309)
activities
Cash flows from financing
activities
Proceeds from issue of - - 543
ordinary shares
Equity dividends paid to (254) (194) (694)
shareholders
Net cash used in financing (254) (194) (151)
activities
Net increase/(decrease) in 212 (32) 2,753
cash in the period
Cash and cash equivalents at 1 3,804 1,051 1,051
January
Cash and cash equivalents at 4,016 1,019 3,804
end of period
1. Basis of preparation
The interim accounts have been prepared using the same accounting policies, in accordance with International Financial Reporting
Standards, as were used in the Group's statutory accounts to 31 December 2007. The Group has taken advantage of the option not to apply IAS
23 "Interim financial reporting".
The interim accounts were approved by the Board of Directors on 10 September 2008.
The interim accounts for the six months ended 27 June 2008 and 26 June 2007 contained within this statement do not constitute statutory
accounts as defined in Section 240 of the Companies Act 1985. The figures for the year ended 31 December 2007 have been extracted from the
statutory accounts for 2007 which received an unqualified auditors' report and which have been delivered to the Registrar of Companies.
2. Revenue
Revenue and operating results are derived from within the United Kingdom and from the Group's principal activity of the manufacture and
marketing of branded consumer products.
3. Taxation
The taxation charge on profit on ordinary activities has been based upon the estimated effective tax rate for the year.
4. Earnings per share
Unaudited Unaudited Audited
six months to six months to year ended
27 June 26 June 31 December
2008 2007 2007
Earnings per share (pence)
Basic 10.2 9.5 20.3
Diluted 10.1 9.4 20.2
Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of
shares in issue during each period.
Diluted earnings per share reflect the adjustment of the weighted average number of ordinary shares in issue to assume conversion of all
dilutive potential ordinary shares, being outstanding employee share options.
Weighted average number of shares:
Unaudited Unaudited Audited
six months to six months to year ended
27 June 26 June 31 December
2008 2007 2007
For basic earnings per share 28,241,465 27,761,150 28,001,307
Dilution for share-based 195,834 425,652 95,913
payments
For diluted earnings per share 28,437,299 28,186,802 28,097,220
5. Dividends
Amounts recorded as dividends in the interim report comprise:
Unaudited Unaudited Audited
six months to six months to year ended
27 June 26 June 31 December
2008 2007 2007
�'000 �'000 �'000
Final dividend per share for 1.8p - 500 500
2006
Interim dividend per share for 0.9p - - 254
2007
Final dividend per share for 2.3p 650 - -
2007
650 500 754
The Directors have approved an interim dividend of 0.94p per ordinary share payable on 9 January 2009 to shareholders recorded on the
register on 12 December 2008.
6. Equity
The movement on equity shareholders' funds comprises:
Unaudited Unaudited Audited
six months to six months to year ended
27 June 26 June 31 December
2008 2007 2007
�'000 �'000 �'000
Profit for the financial period 2,875 2,651 5,688
Ordinary dividends paid (650) (500) (754)
Share option expense 29 34 59
Tax on exercise of share - - 287
options
Issue of share capital - - 543
Revaluation of freehold land - - 3,221
and buildings
Deferred tax movement (51) 190 (1,117)
Remeasurement of deferred tax - - 250
for change in UK rate
Net addition to equity 2,203 2,375 8,177
shareholders' funds
At 1 January 26,079 17,902 17,902
Equity shareholders' funds at 28,282 20,277 26,079
end of period
7. Cash generated from operations
Unaudited Unaudited Audited
six months to six months to year ended
27 June 26 June 31 December
2008 2007 2007
�'000 �'000 �'000
Operating profit 3,910 3,841 8,046
Adjusted for:
Depreciation and amortisation 323 279 566
Loss/(profit) on disposal of
property, plant and equipment 2 (1) 17
Share option expense 29 34 59
Grant released from deferred (11) (13) (27)
income
Changes in working capital:
Increase in inventories (97) (739) (904)
Increase in trade and other (1,870) (1,243) (187)
receivables
Increase in trade and other 1,050 1,778 906
payables
Cash generated from operations 3,336 3,936 8,476
This information is provided by RNS
The company news service from the London Stock Exchange
END
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