Acatos & Hutcheson - Interim Results
November 20 1998 - 7:08AM
UK Regulatory
RNS No 9241r
ACATOS & HUTCHESON PLC
20th November 1998
ACATOS & HUTCHESON plc
Interim results for the 26 weeks ended 27 September 1998
Acatos & Hutcheson plc, the edible oils and fats manufacturing group,
announces its interim (unaudited) results for the 26 weeks ended 27
September 1998.
26 weeks to 27 26 weeks to
September 1998 29 March 1998
Turnover #149.8m #151.0m
Operating profit/(loss) on
continuing operations #0.46m (#1.76m)
Profit/(loss) on ordinary
activities before taxation #1.2m (#2.9m)
Profit/(loss) on ordinary
activities after taxation #1.1m (#2.7m)
Earnings per share (1.4p) (6.1p)
Statement by the Chairman
The results for the period show a profit on ordinary activities after
taxation of #1.1m compared to a loss of #2.7m during the previous six
months.
In order for shareholders to understand the present position of
Acatos & Hutcheson more clearly I believe it will be helpful for me
to outline where we are now.
* Both the North West factories are closed, the sites sold and all
manufacturing transferred to London - site costs have been
eliminated. The residual office costs in Bootle will have been
completely eliminated by the calendar year end.
* On comparable activities we have reduced our directly employed
head count by 35% against 1997; employee numbers are continuing
to fall substantially and will do so until 1999.
* All major capital spends have been completed and cash flow is
now positive and increasing.
* Accounting has transferred to London.
* The raw material purchasing department has transferred to
London.
* The refined oil sales department and bakery fats sales
department will transfer by the year end when the Bootle
offices' temporary lease from the site purchaser expires.
* The crippling effect of high sterling on our margins is now
easing and I believe sterling has further to fall yet. The
decline in sterling is assisting us in rebuilding margins.
* The concentration of our activities in Orchard Place is
eliminating inter-site transport and communication costs, and
will make for a much more cohesive organisation with tighter
control of all our operations.
The objectives of what seems to have been a long battle have
eventually been achieved, but the casualties have been high -
extraordinary costs and decimated profits.
During the last calendar year the weaknesses in arrangements for the
transfer of manufacturing from the North West became very apparent,
as did the engineering shortcomings. As a result our major
shareholder, Archer Daniels Midland, provided us with technical help
and advice. They have also provided an experienced Operations
Manager familiar with all aspects of our industry - this is having a
very positive effect on the business. Our association with ADM now
forms an integral part of our management structure, providing
expertise and depth of resource not otherwise available. Under the
terms of our agreement, they have also appointed a second Non-
Executive Director, Bob Hobson, to our Board.
Bringing top managers and directors into an edible oils and fats
business from other industries and disciplines has unfortunately
consistently proved unsuccessful, not only in our company but in many
others. This is a unique industry and the number of companies in our
segment of it is very small indeed. I have no doubt that the future
of this company lies in close association with ADM and we will look
in their direction for top management succession where it cannot be
found from within our own ranks.
With the reorganisation, rationalisation and "downsizing" of our
business, and the consolidation of the UK edible oils industry
nearing completion, I will finish the task I set myself in 1982. It
will remain for our business to hone its various operations and
maximise its profits; the completion of this major task will be
passed on to my successor.
For the future, whilst I have an obvious need to safeguard the value
of my own family's shareholding I have, as stated previously, no wish
to remain as Chairman and Managing Director longer than necessary.
Jim Weir, our Executive Deputy Chairman, spent most of his working
life in this company before founding an unrelated business. I am
very pleased that having made appropriate arrangements he has now
agreed to return to us in a full-time capacity and that he will be
appointed Managing Director of this company and of our major
operating company, Pura Food Products Limited, from the 25 November
1998.
Stephen Moore, who has had many years' experience with this company,
has been appointed Group Financial Controller.
In view of the low level of profitability your Board does not propose
to pay an interim dividend.
I S Hutcheson, Chairman
20 November 1998
Enquiries :
I S Hutcheson, Chairman 0171 418 1531
J Weir, Deputy Chairman 0171 418 1543
CONSOLIDATED PROFIT AND LOSS ACCOUNT
26 WEEKS ENDED 27 SEPTEMBER 1998
26 weeks to 26 weeks to
Notes 27 September 29 March
1998 1998
#000 #000
Turnover
Continuing operations 2,3 149,807 139,535
Acquisitions - 11,366
------------ ------------
Operating profit/(loss) 467 (585)
Exceptional item 4 1,741 (1,531)
Share of associate's profit 313 -
Net interest charge (1,306) (781)
------------ ------------
Profit/(loss) on ordinary
activities before taxation 1,215 (2,897)
Taxation 5 (97) 124
------------ ------------
Profit/(loss) for the period 1,118 (2,773)
Minority interests - 85
------------ ------------
Profit/(loss) attributable 1,118 (2,688)
to shareholders ------------ ------------
Earnings per ordinary share
- basic 7 (1.4p) (6.1p)
- diluted (1.4p) (6.1p)
------------ ------------
CONSOLIDATED BALANCE SHEET AT 27 SEPTEMBER 1998
26 weeks to 27 26 weeks to 29
September 1998 March 1998
#000 #000
Fixed Assets
Tangible assets 78,541 75,928
Investments in associated companies 5,295 13,391
Trade Investment 3,058 3,058
---------- ----------
86,894 92,377
Current assets
Stocks 16,712 17,892
Debtors 44,461 40,764
Own shares held in trust 165 165
Cash at bank 1,747 3,536
---------- ----------
63,085 62,347
Current liabilities
Creditors due within one year (66,921) (71,276)
------------ ------------
Net current liabilities (3,836) (8,929)
------------ ------------
Total assets less current 83,058 83,448
liabilities
Long term liabilities
Creditors due after more than one (5,000) (5,875)
year
Provisions for liabilities and (3,135) (4,384)
charges ------------ ------------
(8,135) (10,259)
------------ ------------
74,923 73,189
------------ ------------
Capital and reserves
Shareholders' funds 74,923 73,189
------------ ------------
Capital employed 74,923 73,189
------------ ------------
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
26 WEEKS ENDED 27 SEPTEMBER 1998
26 weeks to 27 26 weeks to 29
September 1998 March 1998
#000 #000
Profit/(loss) attributable to 1,118 (2,688)
shareholders
Translation adjustment on
consolidation of overseas 55 (53)
subsidiaries ------------ ------------
Total recognised gains and losses
relating to the period 1,173 (2,741)
------------ ------------
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
26 weeks to 27 26 weeks to 29
September 1998 March 1998
#000 #000
Profit/(loss) attributable to 1,118 (2,688)
shareholders
Other recognised gains and losses
relating to the period 55 (53)
Negative goodwill on acquisition - 1,068
Negative goodwill attributable to (534) -
disposal
Revenue reserve of joint 536 -
arrangement
Equity share capital of joint 500 -
arrangement
New equity share capital subscribed 59 10
------------ ------------
Net addition/(decrease) to
shareholders' funds 1,734 (1,663)
Opening shareholders' funds 73,189 74,852
------------ ------------
Closing shareholders' funds 74,923 73,189
------------ ------------
Comprising :
Equity shareholders' funds 74,922 73,188
Non-equity shareholders' funds 1 1
------------ ------------
NOTES TO INTERIM FINANCIAL STATEMENTS AT 27 SEPTEMBER 1998
1. These unaudited results do not amount to statutory accounts
within the meaning of section 240 of the Companies Act 1985.
The financial information for the 26 weeks ended 29 March 1998,
provided for comparative purposes, have been extracted from the
full statutory financial statements for that period. The report
and statutory accounts for that period have been file with the
Registrar of Companies and contain an unqualified audit report
within the meaning of section 235 of the Companies Act 1985 and
the auditors have not made any statements under section 237(2)
or (3) of the Companies Act 1985.
Financial Reporting Standard 9 has been implemented within this
interim report concerning a joint arrangement that prior to this
standard was reported as an associate.
2. Turnover and profit before taxation
Substantially all the group's turnover by origin and profits are
generated in the United Kingdom.
Net assets attributable to overseas operations are not material
to the group.
3. Results attributable to continuing operations
The total figures for the period include sales of #4,384,000 and
operating profits of #461,000 relating to a formerly wholly
owned subsidiary Leon Frenkel Limited, a 50% share of which was
sold on 2 June 1998. Profits from the remaining 50% interest
after this date are reflected in share of associate's profits in
the profit and loss account.
4. Exceptional item
During the period an exceptional item of #1,741,000 resulted
from the sale of two former production sites for proceeds of
#5,900,000.
5. Taxation
The taxation charge in the 26 weeks ended 27 September 1998
represents a provision of 31% on activities, reduced by tax
assets within the group.
6. Dividends
No dividends will be paid for the interim period.
7. Earnings per share
The earnings per share calculation is based upon the recently
released Financial Reporting Standard 14. Earnings per share
are calculated on losses attributable to ordinary shareholders
of #623,000 excluding profits attributable to the exceptional
item on the adjusted average of 43,804,584 (29 March 1998:
43,777,400) ordinary shares in issue and ranking per dividend.
There is no material differences to the basic calculation of the
diluted earnings per share representing the additional shares
that would be issued on the conversion of all the diluted
potential Ordinary Shares.
Financial Calendar 1999
Due to the change of financial year end it will not be feasible for
audited accounts to be available within the statutory timescale for
holding the 1999 Annual General Meeting. The intention is therefore
to hold the Annual General meeting and subject to members' approval,
adjourn the substantive business of the meeting to a reconvened
meeting when accounts will be available. This is reflected in the
Financial Calendar.
Financial Year End 28 March 1999
Annual General Meeting (to be adjourned) 28 April 1999
Preliminary Results Late June 1999
Reconvened Annual General Meeting 28 July 1999
Financial Half Year End 26 September 1999
Interim Results Late November 1999
This statement is being sent to all shareholders and further copies
can be obtained from the Company Secretary, Acatos & Hutcheson plc,
Orchard Place, London E14 0JH.
END
IR FEUFSSUAUFLF
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