TIDMESR
ENSOR HOLDINGS PLC
("Ensor", the "Group" or the "Company")
Preliminary results for the year ended 31 March 2013
CHAIRMAN'S STATEMENT
* Operating profit: Up 66% to GBP2,427,000
* Earnings per share: Up 53% to 5.5p per share
* Final dividend: Up 52% to 0.8p per share
We have just completed what has been a more challenging year for the Group on a
number of fronts. The economy of the construction sector, which directly
affects us, was largely static during the year, making trading more difficult.
We also continued the exciting integration of our recent acquisition,
Technocover Limited, into the Group. I am pleased to say however that the
year's outcome has been excellent and has continued the progress of previous
years.
In January last year we acquired Technocover, a manufacturer of physical
security products for the utilities sector. The company required refinancing,
the introduction of financial controls and production disciplines to meet the
demands of a full order book. Senior management appointments have been made
during the year and we are already seeing very promising returns from our
investment. Profitability has been in line with our forecasts and cash has been
generated to benefit the Group. There continues to be work needed to maximise
our return from Technocover but we are pleased with progress to date.
Our other companies have made good contributions to the results. Our roofing
tools business has responded well to remaining within the Group and has
produced a good result for the year. Our door manufacturing and door motors
businesses have performed very satisfactorily despite operating in difficult
markets, including Ireland, and have introduced exciting new products and
services for the future. Our packaging operation has had a year of good
progress and is sourcing greater volumes from China, enhancing margins. The
roofing and drainage building products business operates at the heart of the
difficult construction sector. With the introduction, however, of innovative
and technical new products, the business has had a satisfactory year.
The Ensor office in China continues to provide an important link to our main
suppliers and has had a very busy year maintaining the levels of supply and
service demanded by the Group.
As much of what we sell is sourced in Europe and the Far East, we must be
constantly aware of the impact of exchange rates on our costs. Although we have
been able to largely contain the effects of the weakened pound by forward
buying of currency, we will be working hard this year to maintain our margins
in a competitive market.
During the year we completed a successful enhanced transfer value exercise
(ETV) with our deferred pension scheme members. This has significantly reduced
our overall Group pension liabilities with over 60% of the deferred members -
by number and by value as at 31 Mach 2012 - taking up our enhanced offer to
move their pension savings away from our scheme. This has been financed using
pension fund assets and about GBP750,000 of cash from the Group.
Our subsidiary companies have generated positive cash flows on profitable
trading with careful working capital control. Despite significant investment in
Technocover, capital expenditure and the ETV exercise, our borrowings remain
modest and gearing is a very acceptable 23%.
Since the year end we have exchanged contracts to sell our land holding in
Stockport. The sale, at a price which is a premium to the book value, is
conditional upon planning permission being granted. The scheme is however
supported by the Local Authority and completion of the sale is expected by the
end of 2014. We continue to work to satisfy pre-planning formalities for our
Brackley site, but recent changes to planning legislation are slowing progress.
We are proposing to pay a final dividend of 0.8p per share, making a total
dividend paid and proposed of 1.2p per share for the year - a 50% increase on
last year. This is in keeping with our desire to maintain dividend growth,
where prudent. The final dividend will be payable on 9 August 2013, to
shareholders registered on 28 June 2013.
It has been said many times by wise heads that an organisation's success is
based on the talents of the people it employs. This could not be truer than at
Ensor. I thank and appreciate all our talented men and women who have worked to
produce these very good results.
K A Harrison TD
Chairman
14 June 2013.
BUSINESS REVIEW
Operating results
Ensor's acquisition of Technocover, in January 2012, has had a marked effect on
the Group result for the year, as we have consolidated a full year's trading
for the first time.
Whilst increasing our focus towards Building and Security Products, the
acquisition has also served to diversify the Group's activities into subtly
different market areas - namely UK utilities. Nevertheless, the Group's
activities remain significantly dependent upon the UK construction market,
which continues to be challenging as restricted public spending and a general
lack of confidence serve to hinder investment in both capital and refurbishment
projects.
On a like-for-like basis, excluding the businesses disposed of and acquired
(being Lowland Ensor Doors and Technocover respectively), the Group results
showed a maintained operating profit in 2012/13, in line with our expectations.
Sales reduced by less than 2% and remained reliable throughout the year. A
significant element of the reduction was due to the continued focus on
higher-margin sales, which ensured that the gross profit margin was improved
from 24.2% to 24.6%, and the aggregate gross profit figure increased
year-on-year. Margins have been maintained or improved across the group.
This growth was mitigated by a modest increase in sales and administrative
overheads.
The year-on-year movement in total Group sales and operating profit (before
exceptional administrative expenses), reflects the consolidation of twelve
months' results from Technocover.
Having experienced a period of distress prior to acquisition, the months
following acquisition presented challenges at Technocover to address a backlog
of work and to manage customer expectations, in particular. Nevertheless, the
company contributed continuously to group operating profits.
Senior appointments were made to strengthen the finance and production
facilities of the business, and essential capital and maintenance expenditure
was undertaken to enable the company to develop.
There is still much to do at Technocover, but the business ended the year in a
significantly more capable condition than it was at acquisition.
Group operating profit of GBP2,427,000 was GBP967,000 (66%) higher than last year.
Discontinued activity and impairment of goodwill
The 2012 Annual Report and Accounts anticipated the disposal of CMS Tools
Limited, which resulted in it being treated as a discontinued operation. The
sale of the business did not proceed and the 2012 results have been represented
to include CMS within continuing operations.
The discontinued operations also included an impairment loss of GBP1,014,000 in
respect of an impairment of the goodwill of CMS Tools Limited. Under
International Financial Reporting Standards previously recognised impairment
losses cannot be reversed in subsequent years.
Finance costs
Finance costs comprise borrowing costs and an actuarial calculation reflecting
the net cost of financing the deficit in the Group's defined-benefit pension
scheme.
The increase in total finance costs, from GBP165,000 to GBP295,000, principally
reflects the full-year impact of finance costs associated with the acquisition
of Technocover - its subsisting bank borrowings, Group bank borrowings assumed
to acquire the business, and a notional charge on contingent consideration.
The majority of Technocover's finance costs are attributable to an enhanced
collar arrangement, which was established in 2007. Whether the arrangement was
mis-sold by the company's bank at the time, is under consideration as part of
the Financial Conduct Authority's review of such arrangements and a separate
claim lodged by the company.
Cash flow and financial position
Cash flow generated from operations of GBP2,133,000 (2012: (GBP795,000) absorbed)
represents a strong performance, having been adversely affected by an increase
in receivables, following particularly high sales at the year-end.
Two notable factors contribute heavily in arriving at the net cash flow for the
year - loan repayments of GBP583,000 and payments of GBP778,000 in relation to
pension fund liability management.
The loan repayments of GBP583,000 relate to a bank loan which was consolidated on
the acquisition of Technocover and which featured a bullet repayment of GBP
250,000, in 2013. The balance of the loan, of GBP1,075,000, is payable by
instalments.
Consolidated group borrowings stood at GBP2,101,000 at the year-end (2012: GBP
2,713,000), representing gearing of 23% (2012: 34%).
Commencing in April 2012, the Company promoted enhanced transfer value offers
to all deferred members of the Ensor Group Pension Fund. By making such offers,
we intended to contain future risks by reducing the size of the scheme
membership and hence reducing the unpredictability of future scheme costs and
investment returns.
The exercise was completed during the year, and the offer was accepted by 116
out of 191 deferred members. The cost of enhancements and associated fees,
totalling GBP778,000, was borne by the Company. Transfer values of GBP2,755,000
were met by the scheme itself, representing 62% of the total transfer values
attributable to deferred members.
The carrying value of the transferred liabilities was such that a loss of GBP
81,000 was crystallised in the accounts. The deficit has been reduced from GBP
3.2m to GBP2.7m, but more importantly, the scheme liabilities have reduced from GBP
5.7m to GBP3.0m.
The Group's net assets have increased to GBP8.9m (2012: GBP8.0m), equivalent to 29p
per share.
Dividend
The directors propose to pay a final dividend of 0.8p per share in respect of
the financial year ended 31 March 2013 (2012: 0.525p). The final dividend will
be payable on 9 August 2013, to shareholders registered on 28 June 2013.
Dividends of GBP280,000 were paid on ordinary shares during the year ended 31
March 2013 (2012: GBP187,000).
Dividends paid and proposed
In respect of the year ended: 2013 2012
Interim dividend paid 0.40p 0.275p
Final dividend proposed 0.80p 0.525p
______ ______
1.20p 0.800p
______ ______
Consolidated Income Statement
for the year ended 31 March 2013
_____________________________________________________________________________
Re-presented
2013 2012
GBP'000 GBP'000
CONTINUING OPERATIONS
Revenue 32,770 24,677
Cost of sales (24,234) (18,200)
______ ______
Gross profit 8,536 6,477
Administrative expenses (6,109) (5,017)
Exceptional administrative expenses - - (1,014)
impairment of goodwill
Total administrative expenses (6,109) (6,031)
______ ______
Operating profit before exceptional 2,427 1,460
administrative expenses
Exceptional administrative expenses - - (1,014)
impairment of goodwill
Operating profit 2,427 446
Finance costs (295) (165)
______ ______
Profit before tax 2,132 281
Income tax expense (474) (209)
______ ______
Profit for the year attributable to equity 1,658 72
shareholders of the parent company
______ ______
Earnings per share - basic and fully diluted 5.5p 0.3p
______ ______
Consolidated Statement of Comprehensive Income
GBP'000 GBP'000
Profit for the year 1,658 72
Other comprehensive income:
Actuarial loss (436) (286)
Income tax relating to components of other 38 28
comprehensive income
Revaluation of land and buildings - 140
______ ______
Total comprehensive income attributable to 1,260 (46)
equity shareholders of the parent company
______ ______
Consolidated Statement of Financial Position
at 31 March 2013
______________________________________________________________________________________
2013 2012
GBP'000 GBP'000
ASSETS
Non-current assets
Property, plant & equipment 6,901 6,753
Intangible assets 3,087 2,771
Deferred tax asset 632 806
______ ______
Total non-current assets 10,620 10,330
______ ______
Current assets
Assets held for sale - 138
Assets of disposal group classified as held - 1,031
for sale
Inventories 3,109 3,005
Trade and other receivables 8,001 6,508
Cash and cash equivalents 298 -
______ ______
Total current assets 11,408 10,682
______ ______
Total assets 22028 21,012
______ ______
LIABILITIES
Non-current liabilities
Retirement benefit obligations (2,749) (3,223)
Borrowings (810) (1,007)
Other creditors (974) (897)
Deferred tax (100) (65)
______ ______
Total non-current liabilities (4,633) (5,192)
______ ______
Current liabilities
Borrowings (1,514) (1,706)
Current income tax liabilities (312) (255)
Liabilities of disposal group classified as - (223)
held for sale
Trade and other payables (6,631) (5,678)
______ ______
Total current liabilities (8,457) (7,862)
______ ______
Total liabilities (13,090) (13,054)
______ ______
NET ASSETS 8,938 7,958
______ ______
EQUITY
Share capital 3,062 3,062
Share premium 522 557
Treasury shares - (79)
Revaluation reserve 140 140
Retained earnings 5,214 4,278
______ ______
Total equity attributable to equity 8,938 7,958
shareholders of the parent company
______ ______
The financial statements were approved by the Board and were authorised for
issue on 14 June 2013. 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 2013
____________________________________________________________________________
Attributable to equity shareholders of the parent company
Issued Share Treasury Revaluation Retained Total
Capital Premium Shares Reserve Earnings Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 1 April 2,945 470 - - 4,686 8,101
2011
_____ _____ _____ _____ _____ _____
Profit for the year - - - - 72 72
Other comprehensive
income:
Actuarial loss - - - - (286) (286)
Related deferred tax - - - - 28 28
Revaluation of land - - - 140 - 140
and buildings
_____ _____ _____ _____ _____ _____
Total comprehensive - - - 140 (186) (46)
income for the year
_____ _____ _____ _____ _____ _____
Issue of shares 117 35 - - - 152
Purchase of treasury - - (152) - - (152)
shares
Sale of treasury - 52 73 - (35) 90
shares
Dividends paid - - - - (187) (187)
_____ _____ _____ _____ _____ _____
Total transactions 117 87 (79) - (222) (97)
recognised directly
in equity
_____ _____ _____ _____ _____ _____
Balance as at 31 3,062 557 (79) 140 4,278 7,958
March 2012
_____ _____ _____ _____ _____ _____
Balance as at 1 April 3,062 557 (79) 140 4,278 7,958
2012
_____ _____ _____ _____ _____ _____
Profit for the year - - - - 1,658 1,658
Other comprehensive
income:
Actuarial loss - - - - (436) (436)
Related deferred tax - - - - 38 38
_____ _____ _____ _____ _____ _____
Total comprehensive - - - - 1,260 1,260
income for the year
_____ _____ _____ _____ _____ _____
Reclassification - (35) 79 - (44) -
Dividends paid - - - - (280) (280)
_____ _____ _____ _____ _____ _____
Total transactions - (35) 79 - (324) (280)
recognised directly
in equity
_____ _____ _____ _____ _____ _____
Balance at 31 March 3,062 522 - 140 5,214 8,938
2013
_____ _____ _____ _____ _____ _____
Share premium
The share premium account 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.
Treasury shares
The deduction from retained earnings in respect of treasury shares results from
the Company's acquisition of its own shares, at cost.
Revaluation reserve
The revaluation reserve represents the unrealised surplus arising on the
revaluation of certain of the Group's freehold properties.
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 2013
______________________________________________________________________________________
2013 2012
GBP'000 GBP'000
Net cash generated from/(used in) operations 2,133 (795)
before pension exercise
Pension fund enhanced transfer value exercise (778) -
_______ _______
Net cash generated from/(used in) operations 1,355 (795)
_______ _______
Cash flows from investing activities
Proceeds from sale of property, plant and 53 88
equipment
Proceeds from disposal of assets held for 150 -
sale
Acquisition of property, plant and equipment (569) (293)
_______ _______
Net cash used in investing activities (366) (205)
_______ _______
Cash flows from financing activities
Equity dividends paid (280) (187)
Issue of shares - 152
Purchase of treasury shares - (152)
Proceeds from sale of own shares - 90
Amounts repaid in respect of finance leases (22) (3)
Loan repayments (583) (92)
_______ _______
Net cash used in financing activities (885) (192)
_______ _______
Net increase/(decrease) in cash and cash 104 (1,192)
equivalents
Opening cash and cash equivalents (1,055) 137
_______ _______
Closing cash and cash equivalents (951) (1,055)
_______ _______
Accounting Policies and Notes to the Final Results
for the year ended 31 March 2013
______________________________________________________________________________________
1. Basis of preparation
The consolidated financial statements of Ensor Holdings PLC have been prepared
in accordance with 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 acquisition 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. 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 and Security Products - manufacture, marketing, supply and
distribution of building materials, security access products and access
control equipment;
* 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.
The Group's revenues and results by reportable segment for the year ended 31
March 2013 are shown in the following table.
Building & Packaging Other Unallocated Total
Security
Products
External revenue 29,835 2,216 719 - 32,770
_____ _____ _____ _____ _____
Depreciation 480 23 32 - 535
_____ _____ _____ _____ _____
Operating profit 2,114 278 35 - 2,427
_____ _____ _____
Finance costs (295) (295)
Income tax expense (474) (474)
_____ _____
Profit for the year (769) 1,658
_____ _____
Total assets 17,257 950 742 3,079 22,028
_____ _____ _____ _____ _____
Total liabilities (6,681) (178) (56) (6,175) (13,090)
_____ _____ _____ _____ _____
Capital expenditure 605 16 - 18 639
_____ _____ _____ _____ _____
The Group's revenues and results by reportable segment for the year ended 31
March 2012 are shown in the following table.
Acquisition Other Total Packag-ing Other Unallo-cated Total
of Building Building
Techno-cover & &
Security Security
Products Products
External 2,850 18,793 21,643 2,199 835 - 24,677
revenue
_____ _____ _____ _____ _____ _____ _____
Depreciation 54 199 253 19 37 - 309
_____ _____ _____ _____ _____ _____ _____
Operating 189 952 1,141 255 64 - 1,460
profit
_____ _____ _____ _____ _____
Finance costs (165) (165)
Income tax (209) (209)
expense
Impairment of (1,014) (1,014)
goodwill
_____ _____
Profit for the (1,388) 72
year
_____ _____
Total assets 5,963 9,987 15,950 1,019 801 3,242 21,012
_____ _____ _____ _____ _____ _____ _____
Total (4,224) (1,831) (6,055) (103) (55) (6,841) (13,054)
liabilities
_____ _____ _____ _____ _____ _____ _____
Capital 49 137 186 3 9 95 293
expenditure
_____ _____ _____ _____ _____ _____ _____
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 current or prior reporting periods.
4. Exceptional item - goodwill impairment charge
At 31 March 2012 there was an agreement in place for the sale of a subsidiary
business, CMS Tools, to the management of the company. The sale was considered
to be highly probable and so, in accordance with IFRS, the operation was
treated as held for sale in the Statement of Financial Position at that date.
The impairment review in respect of the goodwill in this business had resulted
in an impairment charge of GBP1,014,000. The result of the operation, including
the impairment of goodwill, was treated as a discontinued operation in the
Income Statement for the year ended 31 March 2012.
Subsequently, the sale did not proceed and in accordance with IFRS, the
operation is no longer treated as held for sale. The Income Statement for the
year ended 31 March 2012 has been re-presented, with the result of the company
now included in continuing operations and the impairment charge has been
included as an exceptional item.
Under International Financial Reporting Standards previously recognised
impairment losses cannot be reversed in subsequent years.
5. Earnings per share
Basic and fully diluted
Earnings before exceptional administrative expenses 5.5p 3.6p
Exceptional administrative expenses - impairment of - (3.3p)
goodwill
______ ______
Total earnings per share 5.5p 0.3p
______ ______
The calculation of earnings per share for the period is based on the profit for
the period divided by the weighted average number of ordinary shares in issue,
being 30,295,976 (2012: 29,888,168). The fully diluted loss per share is based
upon the weighted average of 30,378,246 shares (2012: 30,002,190). The dilution
is due to subsisting share options.
The weighted average number of shares for the basic and fully diluted earnings
per share calculation can be reconciled as follows:
2013 2012
No. No.
Weighted average number of shares in issue 30,295,976 29,888,168
Weighted average number of dilutive shares arising 82,270 114,022
from subsisting share options
_______ ______
Weighted average number of shares for fully 30,378,246 30,002,190
diluted calculation
______ _ _____
6. Cash flow generated from operations
2013 2012
GBP'000 GBP'000
Cash flows from operating activities
Profit for the year attributable to equity 1,658 72
shareholders
Impairment of goodwill of discontinued - 1,014
operation
Depreciation charge 535 309
Finance costs 295 165
Income tax expense 474 209
Profit on disposal of property, plant & (14) (38)
equipment
Profit on disposal of asset held for sale (12) -
Amortisation of intangible asset 34 -
Charge in respect of enhanced transfer 81 -
exercise
_______ _______
Operating cash flow before changes in 3,051 1,731
working capital
Decrease/(increase) in inventories 112 (462)
(Increase)/decrease in receivables (1,112) 268
Increase/(decrease) in payables 443 (2,064)
_______ _______
Cash generated from/(used in) operations 2,494 (527)
Interest paid (191) (164)
Income taxes paid (170) (104)
_______ _______
Net cash generated from/(used in) 2,133 (795)
operations
_______ _______
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 2013 or 31 March 2012 but is derived from those accounts. Statutory
accounts for 2012 have been delivered to the Registrar and those for 2013 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 Monday 22 July 2013.
The Report and Accounts will be sent to shareholders and be available from the
Company's website at www.ensor.co.uk shortly. Additional copies of the Annual
Report and of this statement will be available at the Company's registered
office.
Enquiries:
Ensor Holdings PLC
Roger Harrison/Marcus Chadwick
0161 945 5953
Westhouse Securities Limited
Richard Baty/Paul Gillam
020 7601 6100
END
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