TIDMESR
ENSOR HOLDINGS PLC
FINAL RESULTS FOR THE YEAR ENDED 31 MARCH 2011
CHAIRMAN'S STATEMENT
- Sales: up 10% to GBP21,357,000
- Operating profit: up 86% to GBP938,000
- Proposed total dividend: 0.525p up from 0.15p
I am delighted to be able to report that Ensor has continued to make substantial
progress this year with sales up 10% to GBP21,357,000 (2010: GBP19,443,000). More
importantly, operating profits have increased by 86% to GBP938,000 (2010: GBP504,000)
and earnings per share have gone up to 2.1p (2010: 1.3p). This organic growth
is particularly pleasing as it is against a background of continued recessionary
pressures and an uncertain construction industry, a market in which we are highly
involved.
During the year, our cash flows have been good. Our profitability, debtor and
stock management have allowed us to become debt free and create a net cash
position.
Since last year we have successfully changed our banking arrangements with an
improvement in the terms we enjoy. We are financially well placed to take
advantage of appropriate business or acquisition opportunities, when they
arise, to strengthen the Group.
In contrast with last year when the Ensor pension scheme deficit increased,
there has been no further impact this year on the balance sheet, as the net
value of the assets and liabilities of the scheme is generally unchanged. This
has contributed to the reduction in our finance charges to GBP125,000 (2010: GBP248,000).
All of our operating subsidiaries have performed well during the year. We
continue however to be cautious with our outlook, due to the unknown effects of
government spending cuts, the slow progress of the economy and exchange rate
fluctuations. I am happy though, that Ensor is well positioned to make further
progress in this new financial year. Sales order intakes and gross margins are
currently satisfactory. Our emphasis of targeted marketing of well-engineered
products and services, into clearly identified sectors, allows us to take a
larger share, albeit, of a reduced market. Our China office continues to
support our UK companies by representing their best interests and seeking new
commercial opportunities.
Work to maximise the value of our property assets continues. Our Brackley site
is shortly expected to receive planning permission for residential development,
at which point we intend to place the site on the market. During the year we
disposed of our property in Sandbach which was surplus to our needs.
The continued improvement in our trading results and the strength of our
balance sheet has led us to propose a final dividend of 0.35p per share. This
dividend together with the interim dividend of 0.175p already paid will result
in a total dividend for the year of 0.525p per share. This compares with a
total dividend of 0.15p for the year ended 31 March 2010 and demonstrates our
determination to return to being a dividend growth stock. Subject to approval
at our AGM, the final dividend will be payable on 12 August 2011, to
shareholders on the register on 1 July 2011.
May I once again thank our shareholders for their loyal support and everyone at
Ensor for their efforts and hard work which have contributed to these excellent
results.
K A Harrison TD
Chairman
10 June 2011
Enquiries:
Ensor Holdings PLC
Roger Harrison/Marcus Chadwick
0161 945 5953
Westhouse Securities Limited
Tim Feather/Matthew Johnson
0113 246 2610
BUSINESS REVIEW
______________________________________________________________________________________
Although remaining below pre-recession levels, Group results continued to
improve throughout 2010/11. Whilst both of the preceding two years were
distorted by the decline to, and subsequent rise from, the low point of
recession, the current year improvement has been relatively consistent.
Turnover for the first-half showed an 8% increase against the prior year
comparative, and 10% for the second-half.
Gross profit levels have improved overall, from 22.9% to 23.6%, as a result of
several small influences, rather than individually significant factors; market
stabilisation, exchange rates, procurement policy, and judicious selling price
increases being the foremost contributors. Nevertheless, transportation and
packaging material costs in particular have kept margins under pressure.
The improvements in sales and gross margin resulted in an increase in gross
profit of GBP574,000, to GBP5,035,000 (2010 : GBP4,461,000), which has been only
slightly eroded by higher administrative expenses - increased by 3.5%, from GBP
3,957,000 to GBP4,097,000. However, a significant part of this apparent increase
results from a re-classification of payroll costs to administrative expenses
from cost of sales.
The cost base of the Group remained substantially as it was in the previous
year. Pay restraint continues to represent a high priority, however recognition
has been given in those businesses which have better weathered the recession.
Some additional cost was occasioned by the management of the liabilities of the
defined-benefit pension fund - an objective which will be pursued further as
our financial position allows.
Building Products, the major segment of Group activities, translated a 9%
increase in turnover into a GBP409,000 increase in operating profit as margins
were strengthened and overheads curbed. Daily sales progressed from GBP68,000 to
GBP74,200 and gross margins from 22.1% to 23.1%.
Although Packaging achieved strong sales growth, with daily sales up from GBP
6,500 to GBP7,200, gross margins were eroded, from 36.7% to 31.1%, by
significantly higher costs for polythene products, driven by escalating oil
prices. These influences resulted in a modest increase in segment profit.
Overall, the combined factors of sales growth, margin improvement and control
of overheads, resulted in Group operating profit increasing from GBP504,000 to GBP
938,000.
Financial expenses
Financial expenses comprise borrowing costs and an actuarial calculation
reflecting the net cost of financing the deficit in the Group's defined-benefit
pension scheme. The reduction in financial expenses, from GBP248,000 to GBP125,000,
reflects a reduction in both elements.
The cost of financing Group borrowings has reduced, year on year, primarily as
a result of strong cash generation and reduced borrowings.
The benefit of our move to Lloyds TSB Bank plc, was limited by the transfer not
taking place until February 2011, and by our significantly improved cash
position.
The net pension-related cost reduced from GBP158,000 in 2009/10, to GBP60,000 this
year, principally by reason of the improvement in the value of pension fund
investments between March 2010 and March 2011.
Earnings per share
Earnings per share were 2.1p (2010: 1.3p) - up by 62%, although this increase
does not reflect the extent of increase in underlying profits, due to the
effect of the tax credit in 2010.
Cash flow and financial position
Cash of GBP1,167,000 (2010: GBP1,069,000) was generated over the course of the
year, eliminating borrowings and leaving the Group in a positive net cash
position at the year end.
Cash generated from operations of GBP1,312,000 was augmented by GBP200,000 from the
sale of a redundant property, and by a reduction in corporation tax payable due
to the utilisation of prior year losses.
Inventories were reduced, despite the increase in activity levels, and the
ageing of receivables was maintained, notwithstanding evidence of some
deterioration in the ability of some customers to pay.
Payables have increased as a normal consequence of increasing activity levels,
but additionally, the increase in corporation tax and VAT liabilities are more
marked than usual due to the previously cited loss relief and the strength of
the final quarter's trading.
The Group's consolidated balance sheet at 31 March 2011 shows:-
* Borrowings reduced from GBP1.03m to GBPnil
* Gearing reduced from 14% to nil%
* Working capital (inventories, receivables and payables, excluding
corporation and deferred tax) reduced from GBP3.8m to GBP3.4m
* Total equity attributable to shareholders of GBP8.1m, which equates to 27.5
pence per share
These changes underline our caution in relation to both debt and risk in
current assets, particularly in these uncertain times. Nevertheless, with a
strong balance sheet, and available borrowing facilities, the Group remains
well-placed to pursue the opportunities which such times may present.
Key performance indicators
In addition to the universal performance indicators of sales, gross margins,
operating profit, earnings per share, cash flow and gearing referred to above,
or in the Chairman's Statement, indicators of a more activity-specific nature
are used within the Group to assess the performance of subsidiary companies.
These indicators are used in conjunction with the controls described in the
Corporate Governance statement and relate to a wide variety of aspects of the
businesses, for example, working capital measures, production yields, quality
control, targets, market share information, product return rates, etc. Due to
the differences in size and markets across the Group's businesses it is not
practicable to provide a more detailed analysis of how these indicators are
applied to each of the respective activities.
Principal risks and uncertainties
The directors believe that the most significant risk and uncertainty facing the
Group remains that of the general economic outlook for the UK and for the
construction sector in particular.
The Group's businesses have adapted to the current economic climate, whilst
retaining the capacity to increase market share. Their diversified nature and
the lack of over-reliance on any one business, serves to moderate the range of
risks.
Dividend
The directors propose to pay a final dividend of 0.35p per share in respect of
the financial year ended 31 March 2011 (2010: 0.15p). Dividends of GBP83,000 were
paid on ordinary shares during the year ended 31 March 2011 (2010: nil).
Share capital
The Companies Act 2006 permits a company to purchase its own shares if the
purchase has been authorised by the shareholders in general meeting. It is
common practice for quoted companies to seek such authority and the directors
consider it is prudent for them to do so. At the Annual General Meeting,
shareholders will be asked to renew the Company's authority to purchase its own
issued ordinary shares of 10p each at a price of not less than 10p per share
and not more than 5% above the average of the middle-market quotations of the
London Stock Exchange for the five days before the purchase. The authority is
for the purchase of a maximum of 4,416,848 shares, being approximately 15% of
the issued share capital, and will expire at the earlier of the conclusion of
the next Annual General Meeting or 18 months from the date of the Resolution.
In addition, the shareholders will be asked to approve the purchase of shares
which will be issued to M A Chadwick and A E Coyne, who are each directors of
the Company, in the event that they exercise their options over up to 1,172,415
ordinary shares. The purchase price payable by the Company would be calculated
as the average middle-market price for the three days prior to the purchase,
subject to a maximum purchase price of 25 pence per share. The total value of
the purchase by the Company would be limited to a maximum of GBP152,414, being
the maximum amount to be subscribed by Mr Chadwick and Mr Coyne for the
exercise of the options. The rationale for the resolution is to prevent the
offer for sale of those shares on the open market having a potentially
prolonged, adverse impact on the Company's share price and to enhance the
Company's earnings and net asset value per share. Taken together, the exercise
of options and purchase of shares would be cash-neutral to the Company and the
shares would be purchased from a market maker.
At 31 March 2010 and 2011, the Company did not hold any of its shares in
treasury.
Consolidated Income Statement
for the year ended 31 March 2011
_____________________________________________________________________________
2011 2010
GBP'000 GBP'000
Revenue 21,357 19,443
Cost of sales (16,322) (14,982)
______ ______
Gross profit 5,035 4,461
Administrative expenses (4,097) (3,957)
______ ______
Operating profit 938 504
Financial costs (125) (248)
______ ______
Profit before tax 813 256
Income tax (expense)/credit (203) 127
______ ______
Profit for the year attributable to equity 610 383
shareholders
______ ______
Earnings per share
Basic and fully diluted 2.1p 1.3p
______ ______
Consolidated Statement of Comprehensive Income
GBP'000 GBP'000
Profit for the year 610 383
Other comprehensive income:
Actuarial loss (80) (433)
Income tax relating to components of (108) 116
other comprehensive income
Revaluation of land and buildings (26) -
______ ______
Total comprehensive income attributable 396 66
to equity shareholders
______ ______
Consolidated Statement of Financial Position
at 31 March 2011
______________________________________________________________________________________
31 March 31 March
2011 2010
GBP'000 GBP'000
ASSETS
Non-current assets
Property, plant & equipment 4,113 4,117
Intangible assets 2,438 2,438
Deferred tax asset 778 886
______ ______
Total non-current assets 7,329 7,441
______ ______
Current assets
Assets held for sale 542 742
Inventories 2,390 2,451
Trade and other receivables 4,596 4,185
Cash and cash equivalents 137 -
______ ______
Total current assets 7,665 7,378
______ ______
Total assets 14,994 14,819
______ ______
LIABILITIES
Non-current liabilities
Retirement benefit obligations (3,111) (3,165)
Obligations under finance leases (16) -
______ ______
Total non-current liabilities (3,127) (3,165)
______ ______
Current liabilities
Borrowings - (1,030)
Trade and other payables (3,766) (2,836)
______ ______
Total current liabilities (3,766) (3,866)
______ ______
Total liabilities (6,893) (7,031)
______ ______
NET ASSETS 8,101 7,788
______ ______
EQUITY
Share capital 2,945 2,945
Share premium 470 470
Revaluation reserve 545 571
Retained earnings 4,141 3,802
______ ______
Total equity attributable to equity 8,101 7,788
shareholders
______ ______
The financial statements were approved by the Board and were authorised for
issue on 10 June 2011. They were signed on its behalf by:
A R Harrison )
Directors
M A Chadwick )
Consolidated Statement of Changes in Equity
for the year ended 31 March 2011
_____________________________________________________________________________
Attributable to equity share holders of the parent
Issued Share Revaluation Retained Total
Capital Premium Reserve Earnings Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 1 April 2,945 470 571 3,736 7,722
2009
Profit for the year - - - 383 383
Other comprehensive
income:
Actuarial loss - - - (433) (433)
Related deferred tax - - - 116 116
_____ _____ _____ _____ _____
Balance as at 1 April 2,945 470 571 3,802 7,788
2010
Profit for the year - - - 610 610
Other comprehensive
income:
Actuarial loss - - - (80) (80)
Related deferred tax - - - (108) (108)
Revaluation of land and - - (26) - (26)
buildings
Dividends paid (see - - - (83) (83)
below)
_____ _____ _____ _____ _____
Balance at 31 March 2,945 470 545 4,141 8,101
2011
_____ _____ _____ _____ _____
2011 2010
GBP'000 GBP'000
Dividends per share
Interim dividend paid 0.175p 0.000p
Final dividend proposed 0.350p 0.150p
______ ______
0.525p 0.150p
______ ______
Share premium
The share premium reserve represents the consideration that has been received
in excess of the nominal value of shares on issue of new ordinary share
capital, less permitted expenses.
Revaluation reserve
The revaluation reserve has arisen as a result of net increases in the carrying
value of the Group's land and buildings.
Retained earnings
The retained earnings reserve represents profits and losses retained in the
current and previous periods.
Consolidated Cash Flow Statement
for the year ended 31 March 2011
______________________________________________________________________________________
2011 2010
GBP'000 GBP'000
Net cash generated from operations 1,312 941
_______ _______
Cash flows from investing activities
Proceeds from sale of property, plant and 37 41
equipment
Proceeds from disposal of assets held for 200 308
sale
Acquisition of property, plant and equipment (295) (221)
_______ _______
Net cash generated from investing activities (58) 128
_______ _______
Cash flows from financing activities
Equity dividends paid (83) -
Amounts repaid in respect of finance leases (4) -
_______ _______
Net cash absorbed by financing activities (87) -
_______ _______
Net increase in cash and equivalents 1,167 1,069
Opening cash and cash equivalents (1,030) (2,099)
_______ _______
Closing cash and cash equivalents 137 (1,030)
_______ _______
Accounting Policies
for the year ended 31 March 2011
______________________________________________________________________________________
1. Basis of preparation
The consolidated financial statements of Ensor Holdings PLC have been prepared
in accordance the Companies Act 2006 and International Financial Reporting
Standards (IFRS) as adopted by the European Union in accordance with the rules
of the London Stock Exchange for companies trading securities on the
Alternative Investment Market. The Group financial statements have been
prepared under the historical cost convention, as modified by the revaluation
of land and buildings, and derivative financial instruments at fair value
through profit or loss. The principal accounting policies adopted by the Group
are set out below.
2. Basis of consolidation
Where the Company has the power, either directly or indirectly, to govern the
financial and operating policies of another entity so as to obtain benefits
from its activities, the entity is classified as a subsidiary. The consolidated
financial statements present the results of the Company and its subsidiaries
("the Group") as if they formed one single entity. Intercompany transactions
and balances between Group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business
combinations using the purchase method. In the consolidated balance sheet, the
subsidiary's identifiable assets, liabilities and contingent liabilities are
initially recognised at their fair values at the acquisition date. The results
of acquired operations are included in the consolidated income statement from
the date on which control is obtained.
3. Earnings per share
The calculation of earnings per share on continuing operations is based upon
the profit after taxation of GBP610,000 (2010: GBP383,000) divided by the weighted
average number of ordinary shares in issue during the year, 29,445,659 (2010:
29,445,659). The fully diluted earnings per share calculation is based upon the
weighted average number of shares of 29,665,193 (2010: 29,445,659). The
dilution in 2011 is due to subsisting share options. There was no dilution in
2010 because the market value of the shares was lower than the option price.
The earnings per share on a basic and fully diluted basis was 2.1p (2010:
1.3p).
4. Segmental analysis
For management purposes, the Group's business activities are organised into
business units based on their products and services and have three primary
operating segments as follows:
* Building Products - manufacture, marketing, supply and distribution of
building materials, tools, components and access control equipment to the
construction industry;
* Packaging - marketing and distribution of packaging materials;
* Other -manufacture of rubber crumb and waste recycling.
These segments are the basis on which information is reported to the Group
Board. The segment result is the measure used for the purposes of resource
allocation and assessment and represents the operating profit of each segment
before exceptional operating costs, amortisation and impairment charges, other
gains and losses, net finance costs and taxation.
Details of the types of products and services from which each segment derives
its revenues are given above.
The accounting policies applied in preparing the management information for
each of the reportable segments are the same as the Group's accounting
policies.
Inter-segment sales are charged on an arm's length basis.
The Group's revenues and results by reportable segment for the year ended 31
March 2011 are as follows:
Building Packaging Other Unallocated Total
Products
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 18,487 2,046 824 - 21,357
______ _____ _____ _____ _____
Depreciation 195 14 28 27 264
______ _____ _____ _____ _____
Operating 670 241 27 - 938
profit
______ _____ _____ ______
Financial costs (125)
Income tax expense (203)
_____
Profit for the year 610
_____
Capital 204 60 55 - 319
expenditure
______ _____ _____ _____ _____
Assets 10,671 1,261 827 2,235 14,994
Liabilities (2,925) (361) (84) (3,523) (6,893)
______ _____ _____ _____ _____
Net assets 7,746 900 743 (1,288) 8,101
______ _____ _____ ______ ______
The Group's revenues and results by reportable segment for the year ended 31
March 2010 are as follows:
Building Packaging Other Other Unallocated Total
Products (see
below)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 16,932 1,619 892 105 - 19,548
______ _____ _____ _____ _____ _____
Depreciation 217 11 39 5 25 297
______ _____ _____ _____ _____ _____
Operating profit 262 220 22 - - 504
______ _____ _____ _____ ______
Financial costs (248)
Income tax credit 127
_____
Profit for the year 383
_____
Capital 176 - 5 1 39 221
expenditure
______ _____ _____ _____ _____ _____
Assets 9,554 1,062 775 - 3,428 14,819
Liabilities (2,263) (325) (115) - (4,328) (7,031)
______ _____ _____ _____ _____ _____
Net assets 7,291 737 660 - (900) 7,788
______ _____ _____ _____ ______ _____
The "other" column for 2010 includes revenue, depreciation and capital
expenditure for a discontinued operation, Powerplus (UK) Limited, whose
business and assets were sold on 5 May 2009. All other operations were
continuing.
Income and expenditure arising directly from a reporting segment are identified
to that segment. Income and expenditure arising from central operations which
relate to the Group as a whole or cannot reasonably be allocated between
segments are apportioned on the basis of the individual segments' earnings.
Head office costs are apportioned to the segments on the basis of earnings.
The Group operates almost exclusively in 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 has therefore not been
separately disclosed .
Revenue from a single customer did not exceed more than 10% of turnover during
the reporting period.
5. Cash flow generated from operations
2011 2010
GBP'000 GBP'000
Cash flows from operating activities
Profit for the year attributable to equity 610 383
shareholders
Depreciation charge 264 297
Financial costs 125 248
Income tax expense/(credit) 203 (127)
Profit on disposal of property, plant & (4) (3)
equipment
_______ _______
Operating cash flow before changes in 1,198 798
working capital
Decrease in inventories 61 318
(Increase)/decrease in receivables (435) 413
Increase/(decrease) in payables 665 (263)
_______ _______
Cash generated from continuing operations 1,489 1,266
Interest paid (171) (84)
Income taxes paid (6) (241)
_______ _______
Net cash generated from operations 1,312 941
_______ _______
6. Reconciliation of net cash flow to movement in net debt
2011 2010
GBP'000 GBP'000
Increase in cash in the year 1,167 1,069
______ ______
Movement in net debt arising from cash flow 1,167 1,069
Net debt at 1 April 2010 (1,030) (2,099)
______ ______
Net cash/(debt) at 31 March 2011 137 (1,030)
______ ______
At 31 March 2011 the Group had undrawn committed borrowing facilities of GBP
3,000,000 (2010: GBP1,970,000) in respect of these balances.
7. Other information
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 2011 or 31 March 2010 but is derived from those accounts. Statutory
accounts for 2010 have been delivered to the Registrar and those for 2011 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 a statement under section 498 of the Companies Act 2006.
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 Friday 15 July 2011.
The Report and Accounts will be sent to shareholders on 20 June 2011 and be
available from the Company's website at www.ensor.co.uk on that date.
Additional copies of the Annual Report and of this statement will be available
at the Company's registered office.
END
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