Ensor Holdings PLC ("Ensor" or "the Group")
Interim Results for the Period ended 30 September 2008
Chairman's Statement
During the period all of our companies were profitable, with one exception.
This was our timber and fencing company, Hawkins-Salmon, which partly relocated
from Northamptonshire to Cheshire.
This move, combined with management difficulties and the current economic
climate, led to a significant loss for the period at this company which
impacted on Group profits as a whole.
The problems at Hawkins-Salmon have been identified and addressed.
I am optimistic that the Group has suffered a temporary setback and that we
will continue to manage the difficult economic conditions and that Ensor
remains a strong business with excellent assets and opportunities.
Financial Review
Sales for the six months to 30 September 2008 reduced by 10% to �14.1m (2007: �
15.7m). Our operating loss of �198,000 compares with a profit of �1,148,000 for
the same period last year. Financial expenses were contained at �62,000 (2007:
�90,000) and tax provisions for the period of �82,000 credit (2007: �280,000
charge) have been made. Earnings per share fell to 0.6p loss (2007: 2.3p
profit).
Cash absorbed by operations was �513,000 (2007: �1,139,000 generated) as a
result of losses incurred and trade and other payables reduced from the higher
activity levels of last year end. Having made net capital expenditure payments
of �241,000 during the current half year, including �100,000 deferred
consideration, and dividend and pension fund payments of �358,000, borrowings
have increased by �1,112,000 since the year end, leaving our gearing at a
manageable level of 20% (2007: 16%). This gives a net asset value of 40p per
share.
Trading
We believe that the markets in which we operate are generally down by as much
as 30% compared with last year. In this climate it is pleasing to report that
the majority of our businesses performed well and maintained or grew their
market share.
As a result, the reduction in year on year sales, excluding Hawkins-Salmon, was
limited to 1% in the first quarter and 5% in the second, which saw a marked
slow-down as indicated in our trading update of 30 July 2008.
The reduction in profitability is principally due to three factors:-
* Poor performance at Hawkins-Salmon following relocation.
This has been addressed by the appointment of an experienced management team
with a proven timber industry background and the restructuring of the business
to realise substantial cost savings and productivity improvements. Current
indications are that this business is operating much more efficiently and is
recovering its customers and market position.
* The general economic recession.
* The weakness of sterling affecting our purchasing operations.
Excluding Hawkins-Salmon, Group sales were down by 3%, gross profit by 3.2% and
pre-tax profit by �267,000. The problems described at Hawkins-Salmon turned the
Group result from a respectable profit into a small loss.
Our companies have remained competitive in these tight market conditions
despite increasing costs including world commodity prices and the general
weakness of sterling.
Overhead costs have been reduced against prior year levels.
Prospects
Market conditions remain very difficult and are not expected to improve during
the course of this financial year. Seasonal factors traditionally lessen sales
in the second half of our financial year but we expect this to be mitigated by
a recovery at Hawkins-Salmon in particular.
Our pricing strategies recognise that cost increases driven by sterling
weakness are expected to be more marked in the second half year.
As trading continues to be affected by global market conditions, our focus
remains on strong marketing, internal cost controls, alternative cost-effective
sourcing of raw materials and disciplined working capital management.
Dividend
After careful consideration of our results for the period and against a
background of continuing global economic uncertainty, the Board feels it would
be unwise to pay an interim dividend. The aim is, however, to resume dividend
payments as soon as circumstances will allow.
Employees
On behalf of the Board, I thank all the staff at the Ensor companies for their
sterling efforts in this present difficult business climate.
K A Harrison TD
Chairman
12 December 2008
Enquiries:
Ensor Holdings PLC
Ken Harrison / Paul Parnham
0161 945 5953
Hanson Westhouse Limited
Tim Feather / Matthew Johnson
0113 246 2610
Group Income Statement
for the six months ended 30 September 2008
Note Unaudited Unaudited Audited
6 months 6 months 12 months
30/9/08 30/9/07 31/3/08
�'000 �'000 �'000
Revenue 14,117 15,683 29,437
Cost of sales (10,652) (10,712) (20,049)
----------- ----------- -----------
Gross profit 3,465 4,971 9,388
Distribution costs (748) (769) (1,584)
Administrative expenses (2,915) (3,054) (5,838)
----------- ----------- -----------
Operating (loss)/profit (198) 1,148 1,966
Reorganisation costs 2 - (115) (150)
Financial expenses (62) (90) (148)
----------- ----------- -----------
(Loss)/profit before tax (260) 943 1,668
Income tax credit /(expense) 3 82 (280) (474)
----------- ----------- -----------
(Loss)/profit for the period (178) 663 1,194
attributable to equity shareholders
====== ====== ======
(Loss)/earnings per share 4
Basic (0.6p) 2.3p 4.1p
Fully diluted (0.6p) 2.2p 3.9p
====== ====== ======
Dividends per share
Dividends paid per share 0.78p 0.70p
Dividends proposed per share 0.00p 0.42p
====== ======
Group Balance Sheet
at 30 September 2008
Unaudited Unaudited Audited
30/9/08 30/9/07 31/3/08
�'000 �'000 �'000
ASSETS
Non-current assets
Property, plant & equipment 5,919 6,207 5,969
Intangible assets 3,147 2,971 3,147
----------- ----------- -----------
Total non-current assets 9,066 9,178 9,116
----------- ----------- -----------
Current assets
Inventories 4,523 4,238 4,415
Trade and other receivables 5,628 6,819 5,641
----------- ----------- -----------
Total current assets 10,151 11,057 10,056
----------- ----------- -----------
Total assets 19,217 20,235 19,172
====== ====== ======
LIABILITIES
Non-current liabilities
Retirement benefit obligations 402 920 572
Deferred tax 159 61 117
----------- ----------- -----------
Total non-current liabilities 561 981 689
----------- ----------- -----------
Current liabilities
Cash and cash equivalents 2,318 1,801 1,206
Trade and other payables 4,694 6,171 5,225
----------- ----------- -----------
Total current liabilities 7,012 7,972 6,431
----------- ----------- -----------
Total liabilities 7,573 8,953 7,120
====== ====== ======
NET ASSETS 11,644 11,282 12,052
====== ====== ======
Equity
Share capital 2,945 2,945 2,945
Share premium 470 470 470
Revaluation reserve 871 868 871
Retained earnings 7,358 6,999 7,766
----------- ----------- -----------
Total equity attributable to equity 11,644 11,282 12,052
shareholders
====== ====== ======
Group Cash Flow Statement
for the six months ended 30 September 2008
Unaudited Unaudited Audited
6 months 6 months 12 months
30/9/08 30/9/07 31/3/08
�'000 �'000 �'000
Cash flows from operating activities
(Loss)/profit for the period (178) 663 1,194
attributable to equity shareholders
Depreciation charge 207 246 499
Financial expenses 62 90 148
Income tax expense (82) 280 474
(Profit)/loss on disposal of (16) 55 (35)
property, plant & equipment
----------- ----------- -----------
Operating cash flow before changes (7) 1,334 2,280
in working capital
(Increase)/decrease in inventories (108) 154 24
Decrease/(increase) in trade and 13 (772) 406
other receivables
(Decrease)/increase in trade and (361) 513 (90)
other payables
----------- ----------- -----------
(463) 1,229 2,620
Interest paid (50) (90) (156)
Income taxes paid - - (368)
----------- ----------- -----------
Net cash (absorbed by)/generated (513) 1,139 2,096
from operating activities
----------- ----------- -----------
Cash flows from investing activities
Proceeds from sale of property, 53 117 146
plant & equipment
Acquisition of property, plant & (194) (942) (501)
equipment
Acquisition of going concern (100) (138) (818)
----------- ----------- -----------
Net cash absorbed by investing (241) (963) (1,173)
activities
----------- ----------- -----------
Cash flows from financing activities
Repayment of loans - (50) (50)
Capital element of finance lease - (4) (4)
payments
Equity dividends paid (230) (206) (330)
Contribution to pension scheme in (128) (113) (141)
excess of charge to income
----------- ----------- -----------
Net cash absorbed by financing (358) (373) (525)
activities
----------- ----------- -----------
Net (decrease)/increase in cash and (1,112) (197) 398
equivalents
====== ====== ======
Analysis of net debt
Bank overdraft 2,318 1,801 1,206
====== ====== ======
Other Statements
for the six months ended 30 September 2008
Unaudited Unaudited Audited
6 months 6 months 12 months
30/9/08 30/9/07 31/3/08
�'000 �'000 �'000
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED
GAINS AND LOSSES
(Loss)/profit for the period (178) 663 1,194
Actuarial gain and related deferred tax - - 363
----------- ----------- -----------
(178) 663 1,557
====== ====== ======
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Opening equity 12,052 10,825 10,825
Recognised (losses)/gains for the period (178) 663 1,557
Dividends paid (230) (206) (330)
----------- ----------- -----------
11,644 11,282 12,052
====== ====== ======
Notes to the Interim Financial Statements
1. Basis of preparation
The unaudited results for the six months have been prepared in accordance with
International Financial Reporting Standards ("IFRS") and do not constitute
statutory accounts within the meaning of Section 240 of the Companies Act 1985.
The statutory accounts for the year ended 31 March 2008, prepared under IFRS,
have been delivered to the Registrar of Companies and received an unqualified
audit report.
The formats of the Group Balance Sheet and Group Cash Flow Statement have been
modified from last year to be consistent with the 2008 Report and Accounts.
2. Reorganisation costs
The reorganisation costs were provisions for redundancy payments and losses on
sale of plant and equipment arising from the closure and relocation of a timber
treatment plant operated by a subsidiary company.
3 Income tax credit/(expense)
The income tax credit/(expense) is calculated using the estimated tax rate for
the year ended 31 March 2009.
4 Loss per share
The calculation of loss per share for the period is based on the loss after
taxation divided by the weighted average number of ordinary shares in issue,
being 29,445,659 (6 months to 30 September 2007 - 29,445,659 and year ended 31
March 2008 - 29,445,659). The fully diluted loss per share is based upon the
weighted average of 29,955,405 shares (6 months to 30 September 2007 -
30,226,689 and year ended 31 March 2008 - 30,305,708). The dilution is due to
subsisting share options.
5 Segmental analysis
The Group is organised into two primary reportable segments within the
definitions of IAS 14 "Segment Reporting", as follows:
* Building Products - manufacture, marketing and distribution of materials,
tools, components and access automation equipment to the construction
industry.
* Packaging - marketing and distribution of packaging materials.
* Other - non-reportable segments as defined by IAS 14 which include rubber
crumb manufacture, distribution of electric motors and waste recycling.
Head office costs are apportioned to the segments on the basis of earnings.
Segmental Analysis of Income Statement
Building Packaging Other Total
Products
�'000 �'000 �'000 �'000
Six months ended 30 September
2008
Revenue 12,230 860 1,027 14,117
Operating (loss)/profit (312) 110 4 (198)
====== ====== ====== ======
Six months ended 30 September
2007
Revenue 13,530 943 1,210 15,683
Operating profit 869 152 127 1,148
Reorganisation costs 115 - - 115
====== ====== ====== ======
The Group operates from one geographical segment, being the United Kingdom.
Turnover to customers located outside the United Kingdom accounted for less
than 10% of total Group turnover and so has not been separately disclosed.
END
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