RNS Number:2085C
Dewhurst PLC
9 December 1999
Final Results for the 53 Weeks ended 3 October 1999
Highlights
- Pre tax profits up 15%
- Earnings per share up 20%
- Return on shareholders' funds at 22%
- All companies report record sales
- Three out of four companies report record profits
- Dividends increased by 9%
Chairman's Statement
Our key strategic goal is to generate long term growth in
earnings for shareholders. The progress made this year
maintains our achievement of that objective.
Results
I am delighted to be able to report another record year
of achievement by the Group and Group companies. Group
sales were up 9%. Group profits before tax were 15%
higher. All companies in the Group generated record sales
and three out of four companies reported record profits.
The main contributors to the Group profit improvement
were the increased sales and productivity at the parent
company and Thames Valley Controls. The Directors
are recommending a final dividend of 2.3p, giving 3.45p
for the year, a 9% increase on last year. These are
again excellent results achieved by the skill and
dedication of our employees and I would like to thank
them all for their efforts during the year.
Strategy
We regularly review our strategies against our long term
goals and have spent considerable time and energy on
discussing and defining these this year.
For the lift division it remains our intention to have a
single manufacturing source for pushbutton and associated
components and to provide service around the world
through a network of companies dedicated to offering
excellent support configuring products to local
customers' requirements.
For keypads and rail we intend to continue to build upon
successes with major companies to broaden the range of
our products.
Management
After 20 years with the company Keith Bossard has decided
to retire as an executive director at the AGM. Keith
has, however, agreed to continue as a non-executive.
This will allow us to retain access to his wealth of
experience in the lift, rail and security markets. I
would like to thank him for his valued service with the
company and look forward to working with him in his new
role.
Outlook
There appears to be more confidence in the market
generally than there was at this time last year. There
are also a number of encouraging opportunities to pursue
to develop the business. However competition remains
fierce, putting pressure on margins, and we are not
assisted by the high value of the pound and continuing
weakness of the euro.
We will be maintaining our focus on innovation, both in
design and manufacturing to enable us to continue to make
progress.
R M Dewhurst
Chairman
Review of Operations
Operating Highlights
Sales and profit both showed good improvement at the
parent company this year. The main contributors to the
better sales were overseas lift markets. Customer
service also markedly improved with significant increases
in on-time delivery performance. Congratulations to
David Mason and his production team for their
achievements.
The results for Thames Valley Controls again registered
good progress. Double digit sales increases and
improvements in the cost of their products generated a
significant profit increase. That these gains were
achieved against a background of falling prices only
serves to emphasise the strength of their performance.
At Dupar Controls a very strong sales performance for
lift products was partly offset by weak keypad demand.
However both sales and profits improved to record levels
this year.
After the leap in sales at The Fixture Company last year,
the growth this year has been more modest. It was also
necessary earlier in the year to strengthen
administrative support and this has contributed to a
small increase in the loss. Since the year end,
management at the company has been changed and we believe
the new team are well placed to take the company forward.
We indicated in the last annual report that we would
continue to repurchase shares if in the directors' opinion
the company's shares remain undervalued and when the
cash position allows. As a result a further 345,000
were repurchased during the year.
Lift Division
Hounslow
We have had another year of strong growth from the
Dewhurst Lift Division, led as ever by growing demand for
our Lift Fixture products both at home and overseas. The
real highlight of the year has been the very successful
launch of our new Compact 2 pushbutton product, which has
been well received and has been taken up by all our
existing customers. It has also generated a great deal of
interest from lift companies who are not currently
using our products.
A feature of the UK market has been the demand for
products that are required to meet the new Lift
Regulations which came into force on July 1st of this
year. The code now requires that all lifts must have two
way communication between the lift car and the outside
world and our Lift Auto Dial (LADs) product meets that
directive. Despite intense competition our UK Sales Team
have done an excellent job selling this product and
through the course of the year we have achieved a
significant market share.
Code requirements are also a feature of our continued
success overseas, where two of our established markets
have changed their codes to include the requirements for
specific types of Braille pushbuttons. We have been able
to meet these specifications exactly, which has led to a
good increase in sales.
We are pleased that over the year we have been involved
in a growing number of landmark projects around the
world. Citigroup's new headquarters in London's Canary
Wharf is a very prestigious office building as is No 2
Park Street in the centre of Sydney. These successes are
as a result of offering greater flexibility in terms of
finishes and colours on our products and this will be a
feature that we will continue to develop in the future.
Thames Valley Controls
Richard Young and his team at Thames Valley Controls
(TVC) have had another year of good profit growth in what
continues to be a very competitive market place. All
credit to them for their achievements.
The focus over the last year at TVC has been in two key
areas. Most importantly we have worked at making a step
improvement in the quality of the product that we are
offering and we have had success in making significant
progress in this area. The second area of focus has been
the Production Engineering where the introduction of new
software has allowed us to reduce dramatically the time
taken to engineer each lift controller. A by-product of
this change is increased standardisation of the panels,
which helps both our customers and ourselves.
We have had some notable technical successes over the
year the most important of which is the first
installation of an AC Gearless controller and machine by
an independent supplier. The market is gradually moving
from DC Gearless to AC Gearless and this is an area
which, until now, has been dominated by the larger lift
manufacturers.
Dupar Controls
The Canadian market has been very buoyant over the last
twelve months and our decision two years ago to introduce
sheet metal facilities into our plant in Cambridge has
meant that we are in a position to benefit fully from the
upturn in the economy.
The challenge for the coming year will be to ensure that
we have the systems in place at Dupar to maintain and
improve the high quality of service whilst the sales
continue to grow fast. This challenge will be met by
Jeff Goebel our new General Manager at Dupar Controls.
Clive Mann, who had been with the company for 20 years
and had been our General Manager since 1990 has emigrated
to the US. Clive made a great contribution to the
development of the company during his period in charge
and we would like to take this opportunity to thank him
for this contribution.
We are confident that Jeff and his team will continue the
impressive long term growth record of Dupar. A new
leader can look at the market and the opportunities in a
new light which will be stimulating for Dupar. We wish
Jeff all the best in his new role.
The Fixture Company
It has been another difficult year at The Fixture
Company. The opportunities in the US are many, but it is
not an easy market to break into. We are; however, very
pleased to announce that Mark Menke has joined us as
General Manager which will considerably strengthen our
team in Chicago. Mark comes to us with many years of
experience in the lift fixture market and he has a great
deal to offer us at The Fixture Company. Again we wish
him great success in his new role.
Keypad Division
The keypad market remains a very competitive area.
However we have made significant progress this year in
improving our processes. For deliveries to our largest
customer, for example, we have seen further improvements
in delivery and quality performance. We have come close
to achieving our goal of 100% on time delivery on a
regular and routine basis. Efficiency improvements
allowed us to stabilise margins despite a market in which
prices were declining.
The major product launch of the year has been Ntor. This
is an access control system for apartments. A vandal
resistant keypad at the apartment block entrance allows
communication via telephone with apartment occupants.
The occupants may then trigger the door unlocking
mechanism to allow entry. The system is generating
interest, particularly in the public housing market.
Rail Division
As expected, the major projects for the rail division
this year were in the refurbishment market. The PA51
bodyside indicator has achieved good success and is now
being fitted to a wide range of rolling stock, including
Adtranz Class 365 Networker trains. A significant
proportion of the Connex fleet of commuter trains were
fitted with enhanced control switches during the year.
This order included both supply and fitting of switches.
Such work is quite a logistics challenge as it is not
always easy to gain access to the trains that require
refurbishment.
Financial Review
Turnover increased by 9% from #18.2 million to #19.9
million. Operating profits increased by #225,000 (14%)
from #1,580,000 to #1,805,000. Net interest earned
increased from #62,000 to #80,000.
Additions to fixed assets declined to #580,000 for this
year after the very high levels of investment in the
prior year. The major purchases were a new universal
moulding machine, suitable both for standard and insert
mouldings, and computer equipment, particularly the new
system at Dupar Controls. A number of other items were
also purchased during the year to improve our
prototyping, test and inspection facilities.
The group ended the year with cash and investments up
from #1.5 million to #1.7 million. This was after
spending a net #220,000 on the repurchase of shares. The
improvement in cash balances was achieved despite a major
initiative to keep close to our agreed terms with our
suppliers. We also benefited from the year end returning
more closely to the month end. As reported last year, we
have major customers who make their payments routinely at
the end of the month. This effect can be seen in the
decrease in debtors on the year end balance sheet.
Operating cash flow was #2.0 million for the year.
Dividends paid increased from #324,000 to #343,000.
The group seeks to reduce or eliminate financial risk, to
ensure sufficient liquidity is available to meet
foreseeable needs, and to invest cash assets safely and
profitably. The policies and procedures operated are
regularly reviewed and approved by the Board. By varying
the duration of its fixed and floating cash deposits, the
Group maximises the return on interest earned. The
Group's reported trading profit was not significantly
affected by currency movement with approximately 11%
being earned in foreign currencies during the period
ended 3 October 1999.
The tax charge for the year increased to #581,000 (30.8%)
from #506,000 (30.8%) with the higher profit. The
proposed total dividend of 3.45p per share, up 9.5%
against last year (3.15p), is covered 3.7 times by
earnings. Shareholders' funds improved from #7.7
million to #8.5 million, with a net reduction of 345,000
shares during the year.
Dates
The dividend will be paid on 28 February 2000 with the
record date being 14 January 2000.
The Annual General Meeting of the Company will take place
at 11.00 a.m. on 31 January 2000 at the Company's
Registered Office, Melbourne Works, Inverness Road,
Hounslow, Middlesex TW3 3LT
Consolidated Profit and Loss Account
for the 53 weeks ended 3 October 1999
1999 1998
(53 weeks) (52 weeks)
# #
Turnover 19,876,599 18,224,024
Operating costs (18,071,476) (16,767,970)
---------------------------------
Trading profit 1,805,123 1,456,054
Other Operating Income
Profit on sale of investments - 123,913
---------------------------------
Operating Profit 1,805,123 1,579,967
Net Interest 79,900 62,439
---------------------------------
Profit on ordinary activities before tax 1,885,023 1,642,406
Tax on profit on ordinary activities (581,397) (506,283)
---------------------------------
Profit for the financial year 1,303,626 1,136,123
Dividends per 10p ordinary share (355,994) (338,533)
---------------------------------
Retained profit for the financial year 947,632 797,590
Basic earnings per share 12.46p 10.42p
Diluted earnings per share 12.36p 10.34p
All amounts relate only to continuing operations
Consolidated Balance Sheet
as at 3 October 1999
1999 1998
(as restated)
# #
Fixed Assets
Tangible
- Land and Buildings 1,374,420 1,382,594
- Plant and Machinery 1,683,995 1,565,227
-----------------------------
3,058,415 2,947,821
Current Assets
Stocks 3,492,022 3,390,793
Debtors 3,316,454 4,030,906
Investments 23,193 21,094
Cash at bank and in hand 1,702,037 1,442,642
-----------------------------
8,533,706 8,885,435
Creditors: amounts falling due within
one year 2,927,646 3,758,108
-----------------------------
Net Current Assets 5,606,060 5,127,327
-----------------------------
Total assets less current liabilities 8,664,475 8,075,148
Provisions for liabilities and charges 172,072 380,000
-----------------------------
Net Assets 8,492,403 7,695,148
-----------------------------
Capital and Reserves
Called up share capital 1,031,870 1,066,375
Share premium account 126,658 126,658
Revaluation reserve 423,001 423,001
Capital redemption reserve 96,940 62,435
Profit and loss account 6,813,934 6,016,679
-----------------------------
Equity Shareholders Funds 8,492,403 7,695,148
-----------------------------
Consolidated Cashflow Statement
for the 53 weeks ended 3 October 1999
1999 1998
(53 weeks) (52 weeks)
# #
Net Cash Inflow From Operating Activities 1,959,936 1,092,911
Returns on Investment and servicing
of finance:
Interest and dividends received 80,682 63,656
Interest paid (782) (1,217)
-----------------------------------------------------------------------------
Net Cash Inflow From Returns on Investments
and servicing of finance 79,900 62,439
Taxation:
UK Taxation (587,269) (348,450)
Overseas Taxation (104,366) (101,037)
-----------------------------------------------------------------------------
Net cash outflow from taxation (691,635) (449,487)
Capital Expenditure and Financial Investment
Purchase of tangible fixed assets (582,262) (830,351)
Sale of tangible fixed assets 55,978 53,601
-----------------------------------------------------------------------------
Net Cash Outflow from Capital Expenditure
and Financial Investment (526,284) (776,750)
Equity Dividends Paid (342,603) (323,533)
Net Cash Inflow/(Outflow) before use
of liquid resources and financing 479,314 (394,420)
Management of liquid resources
Sale of investments - 137,094
Purchase of short-term deposits (752,400) -
----------------------------------------------------------------------------
(752,400) 137,094
Financing
Issue of share capital - 13,560
Repurchase of shares (219,919) (248,265)
----------------------------------------------------------------------------
(219,919) (234,705)
----------------------------------------------------------------------------
Increase/(decrease) in cash in period (493,005) (492,031)
----------------------------------------------------------------------------
END
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