RNS Number:4204L
Barlo Group PLC
22 May 2003
BARLO GROUP PLC
PRELIMINARY ANNOUNCEMENT OF RESULTS
FOR THE YEAR ENDED 31 MARCH 2003
Highlights
* Summary of results for the year:
Year Ended Year Ended
31 March 2003 31 March 2002
Operating Profit before Depreciation and
Amortisation (EBITDA) Euro35.1 m. Euro27.2 m. Up 29 %
Operating Profit before goodwill amortisation Euro21.7 m. Euro15.4 m. Up 41 %
Profit/(Loss) After Tax Euro7.3 m. Euro(10.6) m. -
Adjusted Earnings 5.76 cent 2.80 cent Up 106 %
per Share
Basic Earnings/(Losses) per Share 4.07 cent (6.22) cent -
Net Debt at Year End Euro115.1 m. Euro140.7 m. -
* Recovery in performance in the year driven by some volume growth and
continuing benefits of restructuring and cost reduction programmes.
* Operating profit up 41% to Euro21.7 million.
* Adjusted EPS up 106% to 5.76 cent.
* Operating cash inflow of Euro34.7 million (2002: Euro29.4 million) and reduction
in net debt by Euro25.6 million to Euro115.1 million.
* A dividend has not been declared for the year.
* Trading conditions remain challenging but Group expects stabilisation of
the improved performance in the current year.
Anthony Mullins, Group Chief Executive, said today:
"The Group's performance in the current year was satisfactory in a difficult
trading environment across Europe, particularly in the building materials
sector. Sales volume growth was achieved across all of the Group's businesses.
This, together with the benefits of the restructuring programme undertaken last
year, has facilitated a recovery in profitability. Strong cash generation was
also a feature of the Group's performance and net debt was reduced by Euro25.6
million to Euro115.1 million.
The Group is not anticipating any improvement in the trading environment in the
current year and as a result no real growth in profitability is planned. Cash
generation is expected to remain strong."
Results Summary
The Group's turnover grew by 3.4% in the year, and, allowing for the disposal of
certain non core activities in the previous year, underlying turnover grew by
4.5%. Sales volume growth was achieved in both the plastics and radiators
businesses, helped by a recovery in the Plastics business after its
restructuring in 2001 and the launch of the Group's radiator compact product in
the U.K. and Irish markets.
Operating profit before goodwill amortisation amounted to Euro21.7 million up from
Euro15.4 million in 2002. EBITDA (operating profit before goodwill amortisation and
depreciation) amounted to Euro35.1 million (2002: Euro27.2 million), which represents
a return to the levels achieved by the Group in 2001.
Profit after tax amounted to Euro7.3 million (2002: loss of Euro(10.6) million). The
adjusted earnings per share amounted to 5.76 cent (2002: 2.80 cent). Basic (all
inclusive) earnings per share amounted to 4.07 cent (2002: loss of Euro(6.22)
cent).
Overall debt levels declined from Euro140.7 million at 31 March 2002 to Euro115.1
million at 31 March 2003, a gearing level of 96% (2002: 122%). The improvement
in the Group's trading performance, continued tight control of working capital
and significantly reduced level of capital expenditure, have contributed to this
debt reduction.
A dividend has not been declared for the year, as the Directors continue to
believe that shareholder interests are better served by focussing on reducing
the Group's debt.
Trading Environment
As noted above, the trading environment in all of the Group's markets remained
difficult during the year. Depressed market conditions have continued in
Continental Europe which accounts for close to 60% of the Group's turnover. UK
and Irish markets have been more robust, but pricing pressures have impacted
performance.
Plastics Business
The Group's plastics businesses comprise, Barlo Plastics its clear sheet
operation based in Continental Europe, and Athlone Extrusions its coloured sheet
activity based in Ireland.
Barlo Plastics
Satisfactory volume increases were achieved in the year with underlying volumes
up by over 10% and returning to the levels achieved two years ago before the
Group's restructuring. This volume growth together with the benefits accruing
from the Division's restructuring programme has led to a substantial recovery in
profitability in Barlo Plastics. As part of the prior year restructuring
programme, over 50% of the Division's capacity was moved to lower cost central
European countries (Czech Republic, Slovakia and Eastern Germany).
Raw materials rose during the year, but the current indications are that the
upward movement in prices has slowed.
Athlone Extrusions
Satisfactory volume and profit growth was also achieved in Athlone Extrusions
driven by a strong performance in the U.K. and Irish markets. As a result, the
business has now returned to the profitability levels achieved prior to its
acquisition by the Group in January 2001.
Radiator Business
The Group's radiator activities comprise its panel radiator operations trading
under the Barlo and Veha brands, and its design and specification businesses
trading under the Merriott brand.
Although the panel radiator market has continued to be very difficult, the Group
achieved satisfactory volume growth in the year, helped by the launch of the
Group's compact product in the U.K. and Irish markets. However, profitability
continued to be impacted by severe pricing pressures. Steel prices increased
significantly during the year although recent evidence would suggest that the
rate of increase has slowed.
Volume growth was also achieved in design radiator operations although profit
growth was also adversely affected by pricing pressures.
Finance
Debt and Cash Flow
Operating cash inflow amounted to Euro34.7 million (2002: Euro29.4 million) and
reflected improved profitability and continued tight control of working capital.
Capital expenditure amounted to Euro5.2 million down from Euro23.6 million in the
previous year when the Group completed its four year investment programme at a
cost of close to Euro110 million. The depreciation charge for the year amounted to
Euro13.4 million. The Group expects that its capital expenditure will remain well
below its depreciation charge in the current year.
Net debt at 31st March 2003 amounted to Euro115.1 million (2002: Euro140.7 million).
The gearing level amounted to 96% (2002: 122%). The Group expects that its debt
level will continue to decline in the current year.
Net interest for the year amounted to Euro9.6 million (2002: Euro8.9 million),
interest cover (post goodwill) amounted to 1.95 times (2002: 1.4 times).
Taxation
The total charge for the year amounted to Euro1.8 million, and the Group expects to
continue to have a low effective rate of tax for the foreseeable future.
Net Asset Value
Net asset value per share at 31 March 2003 amounted to 68.5 cent (2002: 65.9
cent).
Outlook
The Group has had a satisfactory performance over the past year, but trading
conditions remain difficult and unpredictable throughout Europe. The Group is
not anticipating any improvement in market conditions in the current year. As a
result, it is not planning for real profit growth and the principal focus will
be on continued debt reduction. Given the unpredictable outlook for the
Euro-zone region, particularly the German and neighbouring economies, there is
downside risk to expectations.
Ends
22nd May, 2003
For Reference:
Tony Mullins
Group Chief Executive
Barlo Group plc.
Tel: (01) 231.0700
Tom Byrne
Murray Consultants
Tel: (01) 498.0300
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2003
2003 2002
Euro'000 Euro'000
TURNOVER 305,989 295,899
OPERATING PROFIT BEFORE GOODWILL 21,651 15,350
AMORTISATION
Goodwill amortisation (2,948) (2,948)
OPERATING PROFIT 18,703 12,402
Exceptional charge - (12,723)
Interest payable (net) (9,587) (8,851)
PROFIT/(LOSS) ON ORDINARY ACTIVITIES 9,116 (9,172)
BEFORE TAXATION
Tax on profit/(loss) on ordinary activities (1,781) (1,400)
PROFIT/(LOSS) ON ORDINARY ACTIVITIES 7,335 (10,572)
AFTER TAXATION
Minority interests - equity (244) (234)
PROFIT/(LOSS) FOR THE FINANCIAL YEAR 7,091 (10,806)
ATTRIBUTABLE TO GROUP SHAREHOLDERS
Dividend on equity shares - -
RETAINED PROFIT/(LOSS) FOR THE YEAR 7,091 (10,806)
BALANCE AT BEGINNING OF YEAR 63,368 73,489
Currency translation adjustment (2,559) 685
BALANCE AT END OF YEAR 67,900 63,368
EARNINGS PER SHARE - Basic (Cent) 4.07 (6.22)
- Diluted (Cent) 3.96 (6.22)
- Adjusted - Excluding goodwill
amortisation and exceptional charge 5.76 2.80
(Cent)
CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2003
2003 2002
Euro'000 Euro'000
FIXED ASSETS
Intangible assets 51,763 54,711
Tangible assets 159,303 173,365
Financial assets 89 99
211,155 228,175
CURRENT ASSETS
Stocks 41,543 42,072
Debtors 80,918 80,320
Cash at bank and in hand 3,231 663
125,692 123,055
CREDITORS (amounts falling due within one year) (122,493) (121,035)
NET CURRENT ASSETS 3,199 2,020
TOTAL ASSETS LESS CURRENT LIABILITIES 214,354 230,195
CREDITORS (amounts falling due after (79,396) (97,886)
more than one year)
PROVISIONS FOR LIABILITIES AND CHARGES (15,039) (17,035)
NET ASSETS 119,919 115,274
CAPITAL AND RESERVES
Called up share capital 21,881 21,881
Share premium account 11,671 11,671
Other reserves 16,910 17,041
Profit and loss account 67,900 63,368
SHAREHOLDERS' FUNDS - EQUITY 118,362 113,961
MINORITY INTERESTS
Equity 1,549 1,305
Non equity 8 8
1,557 1,313
119,919 115,274
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MARCH 2003
2003 2002
Euro'000 Euro'000
Cash inflow from operating activities 34,707 29,375
Fundamental restructuring costs - (11,388)
34,707 17,987
Returns on investments and servicing of finance
Interest received 90 287
Interest paid (8,043) (9,138)
(7,953) (8,851)
Taxation (1,512) (1,019)
Capital expenditure and financial investment
Capital expenditure (5,229) (23,610)
Government grants received 1,698 117
Proceeds from disposal of fixed assets 3,928 -
397 (23,493)
Acquisitions and disposals
Disposal of operations - 5,045
Equity dividend paid - (3,068)
Cash inflow/(outflow) before financing 25,639 (13,399)
Financing
Issue of ordinary share capital - 632
New loans drawn down 1,890 37,733
Repayment of loans (19,404) (27,888)
Finance leases 26 (34)
Transactions with minority interests - (858)
(17,488) 9,585
Increase/(decrease) in cash in the year 8,151 (3,814)
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
Increase/(decrease) in cash in the year 8,151 (3,814)
Decease/(increase) in debt and lease financing 17,319 (9,777)
Translation difference 91 (34)
Movement in net debt in the year 25,561 (13,625)
Net debt at 1 April (140,665) (127,040)
Net debt at 31 March (115,104) (140,665)
This information is provided by RNS
The company news service from the London Stock Exchange
END
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