RNS No 2740a
DEWHURST PLC
4th December 1997
Dewhurst plc (the "Company")
Preliminary results
Chairman's statement
Results
Overall Group sales were up 11% and profits up 55%. The main
contributors to the improved performance were increased sales
and profits at the parent company and a significant reduction
in the losses at Thames Valley Controls. The Directors are
recommending a final dividend of 1.92p, a 7% increase on last
year, to be paid on 2 March 1998 to shareholders on the
register on 16 January 1998. Dividends for the year at 2.88p
are 5% higher than last year. Earnings per share have
increased by 58% to 7.27p for the year, which in part is due
to the repurchase of 135,000 "A" non-voting shares made by the
Company on 13 February 1997.
These results are encouraging and have been generated by a
great deal of hard work by employees throughout the group.
The Company only succeeds in moving forward through the
efforts of its individual employees; I would like to thank
each of them for that effort this year.
Strategy
Our strategy remains focused on providing control systems and
associated components to markets around the world. During the
year we have seen further customer demand for increased
variability and flexibility in the range of products offered,
which puts a strain on manufacturing control systems. Our
ability to manage this configuration control is one of the key
challenges for the organisation.
Another key challenge is to ensure that we make the best use
of the available skills of our staff. We are currently
embarking upon a major training programme to improve employee
effectiveness and communication, This should bring benefits
in future years.
Operating Highlights
Sales and profits were significantly improved at the parent
company. The main contributor to the increase in sales was
the Keypad Division, whose sales were up 40% on last year. In
addition, sales to the Rail industry improved during the year.
The results for Thames Valley Controls were a marked
improvement on last year, with overall losses very
significantly reduced. At the operating level the Company
made a small profit before accounting for restructuring costs.
Major steps have been taken during the year to improve the
Company's competitiveness on its most important products.
This action will be broadened across the whole product range
during the coming year.
Operating performance in terms of sales and profits was
improved at Dupar Controls, although the contribution to the
group improvement was reduced by the weakness of the Canadian
Dollar and strength of the Pound. As expected, improved
margins have been generated by the investment in sheet metal
equipment. As a result some further small additional
investment is planned to allow production of a wider range of
components.
Disappointingly, losses at The Fixture Company increased last
year, although this is partly as a result of reporting a full
year's operation as against the five months reported last
year. Operating losses were reduced in the last quarter and
the trend has continued. We still believe in the long term
prospects of the US market and that our strategy of having a
presence in this market is correct. Management in the Lift
Division are working hard to ensure that we build upon the
sales foundation we have established. This will enable us to
participate profitably in this market in the long term.
Investment
The reported figure for investment in plant and machinery at
#341,000 is low compared to our previous record. This is
primarily because two major items of equipment, another laser
cutting machine and a sheet metal punching machine, expected
to be delivered during the year were not received until the
new financial year.
It is still our policy to invest aggressively in new equipment
to improve the productivity and performance of the Company.
Year 2000
There has been a great deal of publicity recently regarding
the potentially devastating effect the year 2000 may have on
companies' computer systems. I would like to reassure
shareholders that the main administrative systems at the
parent company are already year 2000 compliant and that plans
have been established to ensure that all required systems
throughout the group will be compliant by the end of 1998.
Outlook
The market in the UK has been a little stronger this year and
for the time being this momentum is being maintained. However
the government is attempting to dampen demand and this will
inevitably feed through to the industries we serve in time.
Thames Valley Controls' improved competitiveness should enable
them to build on the successes of this year.
Investment in the Rail infrastructure is increasing. The
market has changed quite significantly over the past five
years. Demand is now for standard products at much lower
prices. These inevitably generate lower margins.
In summary, the coming year is expected to be one of
consolidation of the gains that have been achieved in the past
12 months rather than one of further significant growth.
R M Dewhurst
Chairman
Consolidated profit and loss account
For the 52 weeks ended 28 September 1997
1997 1996
# # # #
Turnover from
continuing
operations 16,981,490 15,313,371
Operating costs
from Continuing
operations (15,838,272) (14,596,499)
Operating profit from
Continuing operations 1,143,218 716,872
Net interest 61,117 59,690
Profit on ordinary
activities before
taxation 1,204,335 776,562
Tax on profit on
ordinary activities (393,519) (261,825)
Profit for the 810,816 514,737
financial year
Dividends per
10p ordinary
share
Interim paid of (106,517) (104,444)
0.96p (1996: 0.93p)
Proposed final (208,939) (315,456) (202,149) (306,593)
of 1.92p
(1996: 1.80p)
Retained profit 495,360 208,144
for the
financial year
Earnings per 7.27p 4.58p
share
Consolidated Balance Sheet
as at 28 September 1997
1997 1996
# # # #
Fixed asets
Tangible
-Land and 1,435,756 1,470,712
buildings
-Plant and 1,167,256 1,287,240
machinery
2,603,012 2,757,952
Current assets
Stocks 3,154,269 2,822,697
Debtors 3,006,581 2,809,876
Investments 36,579 85,269
Cash at bank and 1,934,673 1,665,294
in hand --------- ----------
8,132,102 7,383,136
Creditors: 3,433,196 3,200,501
amounts falling
due within one
year
Net current 4,698,906 4,182,635
assets
Total assets
less current 7,301,918 6,940,587
liabilities
Provisions for
liabilities and - (5,881)
charges
Net assets 7,301,918 6,934,706
Capital and
reserves
Called up share 1,112,160 1,123,050
capital
Share premium 116,248 109,897
account
Revaluation 423,001 423,001
reserve
Capital
redemption 13,500 -
reserve
Profit and loss 5,637,009 5,278,758
account __________ __________
Equity 7,301,918 6,934,706
shareholders'
funds
Consolidated Cash Flow Statement
For the 52 weeks ended 28 September 1997
1997 1996
# # # #
Net cash inflow 1,058,827 1,050,727
from operating
activities
Returns on
investments and
servicing of
finance:
Interest and 61,201 59,690
dividends received
Interest paid (84) -
Net cash inflow
from returns on
investment and 61,117 59,690
servicing of
finance
Taxation:
UK Taxation (182,112) (473,554)
Overseas (71,836) (85,839)
Taxation --------- ---------
Net cash outflow
from taxation (253,948) (559,393)
Capital
expenditure and
financial
investment
Purchase of
tangible fixed (342,871) (510,020)
assets
Purchase of - (68,633)
investments
Sale of tangible 75,570 186,843
fixed assets
Net cash outflow
from capital
expenditure & (267,301) (391,810)
financial
investment
Equity dividends (308,667) (306,593)
paid --------- ---------
Net cash
inflow/(outflow)
before use of
liquid resources
and financing 290,028 (147,379)
Management of
liquid resources
Sale of 48,690 -
investments
Financing
Issue of share 8,961 -
capital
Repurchase of
shares (78,300) (69,339) - -
-------- --------
Increase/(decrease) 269,379 - (147,379)
in cash in ________ _________
period
Statement of Total Recognised Gains and Losses
1997 1996
# #
Profit for the financial year
attributable to shareholders 810,816 514,737
Currency translation differences on (58,809) (2,539)
foreign currency net investments -------- -------
Total recognised gains and losses for 752,007 512,198
the financial year ________ _______
END
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