Disposal
December 02 2002 - 2:00AM
UK Regulatory
RNS Number:4925E
Bullough PLC
2 December 2002
Bullough plc
Disposal
Introduction
Bullough plc ('Bullough') today announces that it has sold the business and
assets of Boulter Boilers Limited ('Boulter Boilers'), a designer manufacturer
and distributor of oil fired boilers for domestic applications, to Buderus
Heiztechnik GmbH ('Buderus'). The total consideration is approximately #8.45
million payable in cash with Bullough retaining tax liabilities of #0.45m. The
proceeds of the disposal will be used to reduce Bullough's debt and provide both
working and investment capital for core parts of the remaining group.
Information on Boulter Boilers
Boulter Boilers carries out all its operations from a site in Ipswich. In the
year ended 31 December 2001, the business made an operating profit of #0.9
million (2000: #1.5 million) on turnover of #9.2 million (2000: #11.2 million).
For the half year ended 30 June 2002, the business made an operating profit of
#0.4 million (2001: #0.1 million) on turnover of #4.5 million (2001: #3.8
million). As at 30 June 2002 the net assets of Boulter Boilers were
approximately #1.0 million.
Principal terms of the sale
There will be no corporation tax payable on the capital gain realised by the
sale and the sale will result in an exceptional profit of approximately #6.5
million, before the write off of goodwill. The disposal will lead to the write
back of goodwill amounting to #3.6 million previously written off against
reserves, which will have no impact on shareholders' funds.
There are no restrictions in the agreement on competitive activity for either
Bullough or Buderus. However, Bullough has agreed for a period of eighteen
months not to solicit or entice away any skilled or managerial employee of
Boulter Boilers.
Proforma statement of net assets following the disposal
The following proforma unaudited statement of net assets of the remaining group
following the disposal of Boulter Boilers has been prepared for illustrative
purposes only to provide information about the impact of the disposal and,
because of its nature, may not give a true picture of the financial position of
the remaining group. The proforma has been prepared on the basis that the
disposal took place as at 30 June 2002 and on the basis set out in the notes
below. The figures for the disposal have been extracted from the unaudited
consolidation schedules of Boulter Boilers, dated 30 June 2002, which were used
in the preparation of the group's unaudited interim results.
Adjustments
At 30 June Disposal Net
2002 of Boulter proceeds Proforma
Boilers
#'000 #'000 #'000 #'000
(Unaudited)
Tangible fixed assets 21,777 (1,138) - 20,639
Current assets
Stock 8,986 (518) - 8,468
Debtors 19,251 (1,489) 250 18,012
Cash at bank and in hand - - 223 223
28,237 (2,007) 473 26,703
Creditors (amounts falling due within one year) (22,750) 1,660 7,477 (13,613)
Net current assets 5,487 (347) 7,950 13,090
Total assets less current liabilities 27,264 (1,485) 7,950 33,729
Creditors (amounts falling due after more than one (178) 33 - (145)
year)
Provisions for liabilities and charges (7,032) 190 - (6,842)
Net assets 20,054 (1,262) 7,950 26,742
Net (borrowings)/cash including finance lease (7,518) 41 7,700 223
Obligations
Notes
1 Save as disclosed, no adjustment has been made to reflect any changes in the
financial position of the group including its trading position since 30 June
2002.
2 The assets and liabilities of the group as at 30 June 2002 have been extracted
without material adjustment from the unaudited interim report for the six months
ended 30 June 2002.
3 The disposal of Boulter Boilers will generate gross consideration of #6.8
million plus the value of net assets disposed of. On a proforma basis, gross
consideration would be #8.1 million. A warranty retention of #0.25 million and
estimated costs of #0.15 million have been deducted from the consideration to
arrive at the expected net proceeds.
Current trading and prospects
The 2002 interim results were published on 25 September 2002 and evidenced the
lower demand experienced throughout the group. Since then the results of the
Temperature Control division remain in line with the Board's expectations.
However, as highlighted in the interim results, the market for Workplace
Solutions products remains depressed. Action had been taken by the time of the
publication of the interim results to match capacity with market demand and
additional restructuring has now been effected.
Overall the Board expects operating profit for the current financial period to
be below expectation as expressed at the interim stage. Significant exceptional
costs have been incurred in respect of the restructuring action, with the bulk
of this cost impacting the second half. It is now anticipated that the second
half results will match the first half but if restructuring costs are excluded
underlying trading shows an improving trend. The group will, in addition,
receive the benefit of the exceptional profit on sale.
Howard Marshall, Chairman of Bullough, commented:
" The sale of Boulter Boilers creates a number of opportunities for taking the
group forward. The disposal proceeds will enable us to make a significant
reduction in external debt and to enhance the net worth of the group."
Enquiries:
Bullough plc 01372 379088
Howard Marshall, Chairman
Colin Bonsey, Finance Director
Financial Dynamics 020 7831 3113
Charlie Armitstead
This information is provided by RNS
The company news service from the London Stock Exchange
END
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