RNS Number:5778E
Ensor Holdings PLC
14 June 2006
ENSOR HOLDINGS PLC
PRELIMINARY ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 31 MARCH 2006
CHAIRMAN'S STATEMENT
Sales Operating Profit
UP 9% 3% LESS
Dividend total Prospects
1p per share CAUTIOUS OPTIMISM
Results
As anticipated in my report at the half-year, trading continued to be slow,
however we were able to increase our total sales by some 9% to #26,704,000 (2005
: #24,537,000) and maintain our gross margins.
During the period we made further investment in a number of our businesses,
increasing costs but strengthening the Group with development of new products.
We relocated and enlarged our door manufacturing company. We integrated our new
acquisition, Wood's Packaging Limited, and generally invested in our management
structure. This total expenditure should give progressive results in the
future. Against these higher costs, and increased regular charges relating to
pensions, there is a credit from the change in pension provision referred to
below.
These matters result in an operating profit slightly lower at #1,511,000 (2005 :
#1,550,000).
Last year we had the added benefit of a one-off sale of property of #402,000
which is, naturally, not repeated in the current year.
Interest costs increased following the purchase of Wood's Packaging and our tax
charge is lower at #362,000 (2005 : #425,000).
Our earnings per share for the year are calculated at 2.7p per share (2005 :
2.9p per share) before exceptional items.
Balance Sheet & Pensions
Our balance sheet is stronger and the cash situation remain satisfactory but due
to the latest accounting rules under FRS17, we must show in the balance sheet a
deficit in the pension funding of #1,628,000. This is a theoretical amount
calculated by our professional actuaries.
During the year it was decided to cease accruals in our final salary scheme.
Affected members have been offered (and have accepted) an alternative money
purchase pension scheme. This change will stabilise our pension situation.
Gearing for the period is satisfactory at 29% (or 36% allowing for the pension
deficit).
Trading
During the year successful efforts were made to ensure maintained and increased
turnover and all our companies were profitable.
The Group is mainly concerned with the distribution of a wide range of products
for the construction industry. This includes supplies of specialist
Ensor-designed electric and electronic door controls, quality industrial doors
supplied to the trade, specialist tools for the roofing and construction
industries, high quality roofing and drainage products, wood and metal fencing
and gates, processed rubber crumb for safety and sports facilities and, from our
new Group member, packing materials for the furniture and other industries.
This is a wide range of products, marketed and distributed from some 10
locations in the UK, with distribution arrangements in Europe and beyond.
A growing number of products are sourced from our own office based in China,
approximately one hour's flight from Shanghai and Hong Kong, where we have a
hardworking team operating this successful office buying for and servicing the
Group. Currency fluctuations, of course, are an important but controlled
concern.
Our fencing company will have to be relocated due to the end of a lease. This
may provide opportunities for progress for this Group company.
Prospects & Dividends
The Board is conscious that there has been a slowdown of the economy,
particularly affecting our industry but we are cautiously confident of our plans
for future successes. The Board is, therefore, recommending a maintained, final
dividend of 0.625p per share, making a total for the year of 1.0p per share,
well covered by earnings.
Subject to approval at the Annual General Meeting, the final dividend will be
payable on 14 August 2006 to shareholders on our Register on 30 June 2006.
Directors & Staff
During the year Mr Brian Morgan retired from the Board having given exceptional
service as a Director for many years. Thanks are given to him for his very
valuable service.
We also, this year, welcome Mr Peter Regis and Mr Roger Harrison to the Board as
Non-executive Directors and believe their experience will contribute to the
future success of Ensor.
My thanks, again, are due to the managers and staff of the Group for their much
appreciated efforts during the year.
Ken Harrison
Chairman
14 June 2006
AUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended 31 March 2006
Restated Restated
2006 2006 2005 2005
#'000 #'000 #'000 #'000
Turnover
Continuing operations 25,274 24,537
Acquisitions 1,430 -
______ ______
26,704 24,537
Cost of sales (18,458) (16,972)
______ ______
Gross profit 8,246 7,565
Distribution costs (1,359) (1,245)
Administrative expenses (5,376) (4,770)
______ ______
(6,735) (6,015)
Operating profit
Continuing operations 1,079 1,655
Acquisitions 200 -
Pension scheme curtailment 374
-
Amortisation of goodwill (142) (105)
______ ______ ______ ______
1,511 1,550
Exceptional item
Profit on disposal of fixed assets - 402
______ ______
Profit on ordinary activities before interest 1,511 1,952
Interest payable (193) (158)
Other finance charges (155) (119)
______ ______
(348) (277)
______ ______
Profit before taxation 1,163 1,675
Taxation (362) (425)
______ ______
Profit for the year 801 1,250
______ ______
Dividends per share
Interim dividend paid 0.375p 0.375p
Final dividend proposed 0.625p 0.625p
______ ______
1.000p 1.000p
______ ______
Earnings per share
Basic 2.7p 4.2p
Diluted 2.7p 4.1p
Basic before exceptional items 2.7p 2.9p
______ ______
AUDITED BALANCE SHEETS
at 31 March 2006
Restated Restated
Group Group Company Company
2006 2005 2006 2005
#'000 #'000 #'000 #'000
Fixed assets
Goodwill 2,280 1,665 - -
Tangible assets 3,525 3,559 1,049 1,102
Investments - - 10,286 7,372
______ ______ ______ ______
5,805 5,224 11,335 8,474
Current assets
Stocks 4,369 4,301 - -
Debtors 5,768 4,870 316 378
______ ______ ______ ______
10,137 9,171 316 378
Creditors: amounts falling due within one year (7,234) (5,746) (3,568) (1,313)
______ ______ ______ ______
Net current assets/(liabilities) 2,903 3,425 (3,252) (935)
______ ______ ______ ______
Total assets less current liabilities 8,708 8,649 8,083 7,539
Creditors: amounts falling due after more
than one year (54) (265) (50) (250)
______ ______ ______ ______
Net assets excluding pension liability 8,654 8,384 8,033 7,289
Pension liability (1,628) (2,254) (1,628) (2,254)
______ ______ ______ ______
7,026 6,130 6,405 5,035
______ ______ ______ ______
Capital and reserves
Called up share capital 2,941 2,941 2,941 2,941
Share premium account 470 470 470 470
Revaluation reserve 877 883 197 197
Profit and loss account 2,738 1,836 2,797 1,427
______ ______ ______ ______
Equity shareholders' funds 7,026 6,130 6,405 5,035
______ ______ ______ ______
AUDITED CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 March 2006
Restated
2006 2005
#'000 #'000
Net cash inflow from operating activities 1,343 1,418
______ ______
Returns on investments and servicing of finance
Interest paid (185) (154)
Interest element of finance lease payments (3) (4)
______ ______
Net cash outflow from servicing of finance (188) (158)
______ ______
Taxation
UK corporation tax paid (399) (341)
______ ______
Net cash outflow from payment of taxation (399) (341)
______ ______
Capital expenditure and financial investment
Purchase of tangible fixed assets (482) (475)
Sale of tangible fixed assets 65 990
______ ______
Net cash (outflow)/inflow from capital expenditure and financial (417) 515
investment
______ ______
Acquisitions and disposals
Acquisition of subsidiary undertaking (855) -
______ ______
Net cash outflow from acquisition (855) -
______ ______
Equity dividends paid (294) (257)
______ ______
Net cash (outflow)/inflow before use of liquid resources and financing (810) 1,177
______ ______
Financing
Issue of shares - 1
Repayment of term loans (200) (200)
Capital element of finance lease payments (49) (33)
______ ______
Net cash outflow from financing (249) (232)
______ ______
(Decrease)/increase in cash in the year (1,059) 945
______ ______
OTHER AUDITED STATEMENTS
for the year ended 31 March 2006
Consolidated Statement of Recognised Gains and Losses
Restated
2006 2005
#'000 #'000
Profit for the financial year 801 1,250
Actuarial gain/(loss) 555 (963)
Related deferred tax (166) 289
______ ______
Total recognised gains for the year 1,190 576
______
Prior year adjustment as explained in note 1 (2,254)
______
(1,064)
______
Reconciliation of Movements in Equity Shareholders' Funds
Group Group Company Company
2006 2005 2006 2005
#'000 #'000 #'000 #'000
Opening shareholders' funds as previously reported 8,200 7,253 7,105 6,556
Prior year adjustment on adoption of FRS21, "Events after the 184 148 184 148
Balance Sheet Date"
Prior year adjustment on adoption of FRS17, "Retirement (2,254) (1,590) (2,254) (1,590)
Benefits"
______ ______ ______ ______
Restated opening shareholders' funds 6,130 5,811 5,035 5,114
Recognised gains for the year 1,190 576 1,664 178
Dividends paid (294) (257) (294) (257)
______ ______ ______ ______
7,026 6,130 6,405 5,035
______ ______ ______ ______
NOTES
1. Accounting policies
Basis of preparation
The financial statements are prepared in accordance with applicable accounting
standards under the historical cost convention as modified by the revaluation of
certain fixed assets.
The directors have reviewed the accounting policies in accordance with FRS 18 "
Accounting Policies" and have concluded that the following changes are required
from the previous year.
The Group has adopted FRS 17, 'Retirement benefits' and FRS 21, 'Events after
the balance sheet date'. The adoption of these standards represents a change in
accounting policies and the comparative figures have been restated accordingly.
The effect of the change in accounting policy to adopt FRS 17 was to decrease
staff costs by #494,000 (2005: #133,000), increase other finance costs by
#155,000 (2005: #119,000), increase deferred taxation by #100,000 (2005:
#4,000), increase profit for the year by #239,000 (2005: increase #10,000) and
to increase the total recognised gains by #389,000 (2005: decrease #674,000).
Equity shareholders' funds have been reduced by #1,628,000 (2005: #2,254,000) as
a result of the new requirement to recognise the pension fund deficit in the
balance sheet.
The effect of the change in accounting policy to adopt FRS 21 was to recognise
the final proposed dividend for the year ended 31 March 2005 of #184,000 in the
current year. The final proposed dividend for the current year of #184,000 will
be recognised in the following year as it has yet to be approved.
Basis of consolidation
The Group financial statements consolidate the financial statements of the
Company and its subsidiary undertakings at 31 March using acquisition
accounting. The results of subsidiary undertakings acquired or disposed of
during a financial year are included from, or up to, the effective date of
acquisition or disposal. On acquisition of a subsidiary, all of the
subsidiary's assets and liabilities existing at the date of acquisition are
recorded at their fair values reflecting their condition at that date.
Profits or losses on intra-group transactions are eliminated in full.
2. Earnings per share
The calculation of earnings per share is based upon the profit after taxation of
#801,000 (2005 : #1,250,000) divided by the weighted average number of ordinary
shares in issue during the year, 29,405,659 (2005: 29,402,454). The fully
diluted earnings per share is based upon the weighted average of 30,144,743
shares (2005: 29,970,517). The dilution in both years is due to subsisting share
options.
The adjusted earnings per share is calculated by reference to the profit after
taxation adjusted to exclude exceptional items as shown below.
Restated Restated
2006 2006 2005 2005
Pence per Pence per
#'000 share #'000 Share
Profit for the financial year 801 2.7p 1,250 4.2p
Exceptional items:
Profit on disposal of fixed assets - - (402) (1.3p)
Taxation in respect of the exceptional items - - - -
______ ______ ______ ______
Adjusted profit before exceptional items 801 2.7p 848 2.9p
______ ______ ______ ______
3. Reconciliation of operating profit to net cash inflow from operating
activities
Restated
2006 2005
#'000 #'000
Operating profit 1,511 1,550
Depreciation of tangible fixed assets 479 474
Amortisation of intangible fixed assets 142 105
Profit on sale of tangible fixed assets (14) (25)
Decrease/(increase) in stocks 16 (481)
Increase in debtors (902) (150)
Increase in creditors 605 78
Contributions to pension scheme in excess of charge to profit and loss (120) (133)
Pension scheme curtailment (374) -
______ ______
Net cash inflow from operating activities 1,343 1,418
______ ______
4. Analysis of changes in net debt
At At
31 March 31 March
2005 Cashflows 2006
#'000 #'000 #'000
Bank overdraft (1,190) (1,059) (2,249)
Bank loans (450) 200 (250)
Finance leases (65) 49 (16)
______ ______ ______
(1,705) (810) (2,515)
______ ______ ______
5. Reconciliation of net cash flow to movement in net debt
2006 2005
#'000 #'000
(Decrease)/increase in cash in the year (1,059) 945
Cash outflow from repayment of debt 249 233
______ ______
Movement in net debt arising from cash flow (810) 1,178
New finance leases - (61)
______ ______
Movement in net debt (810) 1,117
Net debt at 1 April 2005 (1,705) (2,822)
______ ______
Net debt at 31 March 2006 (2,515) (1,705)
______ ______
6. Basis of preparation
The financial information set out in this preliminary announcement of results
does not constitute the Company's statutory accounts for the years ended 31
March 2006 or 31 March 2005 but is derived from those accounts. Statutory
accounts for 2005 have been delivered to the Registrar and those for 2006 will
be delivered following the Company's Annual General Meeting. The Independent
Auditors have reported on these accounts. Their reports were unqualified and
did not contain statements under section 237(2) or (2) of the Companies Act
1985.
7. Other information
The Annual General Meeting of the Company will be held at the Company's
registered office, Ellard House, Dallimore Road, Manchester M23 9NX at 10.00
a.m. on Wednesday 19 July 2006.
The Report and Accounts will be posted to shareholders shortly. Additional
copies of the Annual Report and of this statement will be available at the
Company's registered office.
Enquiries:
Ensor Holdings PLC
Ken Harrison
0161 945 5953
Westhouse Securities LLP
Tim Feather
0161 838 9140
This information is provided by RNS
The company news service from the London Stock Exchange
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