Swallowfield PLC Trading Update (2277U)
July 11 2018 - 2:00AM
UK Regulatory
TIDMSWL
RNS Number : 2277U
Swallowfield PLC
11 July 2018
11 July 2018
Swallowfield plc
("Swallowfield" or the "Group")
Trading Update
Swallowfield plc, a market leader in the development,
formulation and supply of personal care and beauty products,
including its own portfolio of brands, provides a trading update
for the 53 weeks to 30 June 2018.
The Board is pleased to announce that overall the Group has
traded broadly in line with expectations for the full year. We
expect Group revenues to be similar to those reported in the prior
year, driven by a strong double-digit growth in our Brands business
and single digit decline in our Contract Manufacturing business. We
expect Group pre-tax profit for the full year to be significantly
ahead of that reported last year, driven by the strong performance
of our Brands business and reflecting a reduction in LTIP charges,
with underlying operating profit marginally behind last year.
Our Brands business has increased revenues by 16% over the prior
year and full year profitability will be significantly above both
management's expectations and the prior year as a result of
improving margins. The business continues to demonstrate strong
momentum and the recent acquisition of the men's hair styling brand
'Fish' has been successfully integrated into our portfolio and is
trading well.
As expected, revenue in our Contract Manufacturing business has
declined during the year, against very strong prior year
comparisons. In line with the industry, the business has also been
adversely affected by material cost inflation and this, combined
with a slower than anticipated start-up of the three major new
contracts previously highlighted, has resulted in significantly
reduced operating margins in the financial year. Actions are
underway to mitigate the material cost increases and the new
contracts are now in full production and expected to contribute
positively to future growth.
The acquisition of the Fish brand, deferred consideration for
Brand Architekts, along with the maturing of LTIP awards and the
timing impact of cash receipts from customer sales, have resulted
in an increase in the Group's net debt position to GBP11m as at 30
June. The Company expects net debt to reduce significantly early in
the new financial year.
We remain confident in the prospects for the new financial year
and we expect our Brands business to continue to grow strongly.
Whilst cost pressures are anticipated to continue, we expect our
Contract Manufacturing business to return to stronger
profitability, as a result of current actions on costs and driven
by growth from the new contracts.
Tim Perman, Chief Executive of Swallowfield, commented:
'I am pleased to be taking over the role of Chief Executive at
an exciting time in the Group's development. I have been hugely
impressed with the extensive range of opportunities presented by
the Swallowfield business and the strength and commitment of the
team. I believe this leaves us well positioned for future
profitable growth'.
Notice of results
The Group expects to announce its full year results for the 53
weeks ended 30 June 2018 on 25 September 2018.
For further information please contact:
Swallowfield plc
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01823 662
Tim Perman Chief Executive Officer 241
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01823 662
Matthew Gazzard Group Finance Director 241
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Mark Taylor / Jen Boorer N+1 Singer 020 7496 3000
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Josh Royston / Sam Modlin Alma PR 020 8004 4218
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Note: This announcement contains inside information for the
purposes of Article 7 of Regulation 596/2014 (MAR).
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END
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