Hydro Intnl. PLC - Interim Results
August 28 1998 - 3:30AM
UK Regulatory
RNS No 2035c
HYDRO INTERNATIONAL PLC
28th August 1998
HYDRO INTERNATIONAL PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30TH JUNE 1998
CHAIRMAN'S STATEMENT
The first half of 1998 has seen an improved operating performance over that
of the comparable 1997 period. The loss on operating activities fell by
38% to #141,000 from #228,000. This has been achieved through a
combination of an improved gross margin resulting from a different sales
mix than 1997, and through the effect of the reduction in overheads. The
financial result for the six months is in line with the budget set at the
beginning of the year.
The cost of the continued sales and marketing activities in the US
operation have resulted in the majority of the loss, albeit a better result
than that originally budgeted. It is a pleasure to report that these
activities are achieving positive results, with almost $1.5 million of
orders and letters of intent being received since 30 June 1998. The sale
of vortex valves to the City of Evanston for the ongoing flood alleviation
scheme continues as reported in the annual report and accounts, with one
phase delivered in June and a further order for the next phase valued at
#0.25 million being received in July.
The UK operation is trading at a break even level for the first six months.
Worries over the UK economy entering a recession and continued interest
rate rises have led to a slow down in the housing market, which in turn has
affected the level of Hydro-Brake Flow Control sales. Activity has started
to pick up again since July and the combination of the Hydro-Brake with the
plastic honeycomb storage medium (Stormcell) as a packaged product has
assisted the sales effort.
The new non-powered Hydro Jet-Screen, which represents a cost effective
competitor to conventional powered screens, is attracting significant
levels of market interest. The absence of a power requirement along with
the simple self cleansing mechanism is proving attractive to the water
industry. As with all new products, initial market penetration will take
some time, but the first two units are now on order and if the bank of
enquiries can be converted, the product should be an important contributor
to the Group's future sales.
The Storm King range of products are facing a difficult market, with the
focus of water companies being on screening to achieve aesthetic water
quality improvements, rather than on total water quality improvement
through the reduction of chemical and biological pollutant levels. Whilst
long term legislation will be in favour of these products, in the short
term we can not expect any significant sales volume in this area, and this
is why the Hydro Jet-Screen has been developed.
Following the shift in the focus to Australia for our Asia Pacific effort,
I am pleased to report the receipt of our first order, which is for
Brisbane. Additionally, a sub-licence has been completed for part of the
technology, giving our products a far greater market coverage than could
otherwise be achieved.
I would like to welcome David Latham OBE to the Board as a non-executive
director with effect from 1 July 1998. David brings with him considerable
experience of the water industry gained most recently from his nine years
as a director within Anglian Water.
Over the last three years the second six months have shown an improved
trading performance over the first six months and the indications are that
1998 will be no different.
Ronald Somerville CBE MA
Chairman
Group Profit and Loss Account
for the six months ended 30 June 1998
6 mths 6 mths Year ended
ended 30 ended 30 31
June 1998 June 1997 December
(Unaudited) (Unaudited) 1997
(Audited)
#000 #000 #000
__________________________________________________________________________
Turnover - continuing operations 1,392 1,406 3,525
__________________________________________________________________________
Gross profit 841 813 2,128
Administrative expenses (982) (1,041) (2,045)
__________________________________________________________________________
Operating (loss)/profit - continuing (141) (228) 83
operations
Net interest payable (29) (26) (52)
__________________________________________________________________________
(Loss)/profit on ordinary activities
before taxation (170) (254) 31
Taxation - - -
__________________________________________________________________________
(Loss)/profit attributable to (170) (254) 31
shareholders
Dividend - - -
__________________________________________________________________________
Retained (loss)/profit for period (170) (254) 31
__________________________________________________________________________
(Losses)/earnings per ordinary share (1.29p) (1.93p) 0.23p
__________________________________________________________________________
Notes:
1) The Interim Report has been drawn up using the same accounting
policies as for the year ended 31 December 1997.
2) Losses per ordinary share are based on 13,158,716 shares in issue
during the period.
3) The result for the year ended 31 December 1997 is an abridged version
of the information contained in the Company's
accounts which received an unqualified auditors' report and have been
filed with the Registrar of Companies.
4) Copies of the interim results will be distributed to shareholders and
made available to the general public at the Company's
registered office.
5) The Group is continuing to implement its Year 2000 compliance review
as outlined in the Annual Report and Accounts. It
is fully anticipated that the Group will suffer no business
interruption due to the millennium date change.
Group Balance Sheet
30 June 1998
30 June 30 June 31
1998 1997 December
(Unaudited) (Unaudited) 1997
(Audited)
#000 #000 #000
__________________________________________________________________________
Fixed assets
Tangible assets 955 1,030 995
Current assets
Stocks and work in progress 53 49 34
Debtors 921 892 958
Cash and short term deposits 217 139 326
__________________________________________________________________________
1,191 1,080 1,318
Creditors: amounts falling due within (1,085) (1,113) (1,052)
one year
__________________________________________________________________________
Net current assets/(liabilities) 106 (33) 266
Total assets less current liabilities 1,061 997 1,261
Creditors: amounts falling due after
more than one year (530) (550) (560)
__________________________________________________________________________
Net assets 531 447 701
__________________________________________________________________________
Capital and reserves
Share capital 658 658 658
Share premium account 2,100 2,126 2,100
Profit and loss account (2,227) (2,337) (2,057)
__________________________________________________________________________
Total equity shareholders' funds 531 447 701
__________________________________________________________________________
Statement of Total Recognised Gains and Losses
for the six months ended 30 June 1998
6 mths 6 mths Year ended
ended 30 ended 30 31
June 1998 June 1997 December
(Unaudited) (Unaudited) 1997
(Audited)
#000 #000 #000
__________________________________________________________________________
(Loss)/profit for the period (170) (254) 31
Currency translation differences on
foreign currency net investments - 2 (3)
__________________________________________________________________________
Total recognised gains and losses (170) (252) 28
__________________________________________________________________________
Reconciliation of Movements in Group Shareholders' Funds
for the six months ended 30 June 1998
6 mths 6 mths Year ended
ended 30 ended 30 31
June 1998 June 1997 December
(Unaudited) (Unaudited) 1997
(Audited)
#000 #000 #000
__________________________________________________________________________
Total recognised gains and losses (170) (252) 28
Adjustment to share premium account - - (26)
__________________________________________________________________________
Net (decrease)/increase in (170) (252) 2
shareholders' funds
Opening shareholders' funds 701 699 699
__________________________________________________________________________
Closing shareholders' funds 531 447 701
__________________________________________________________________________
Consolidated Cash Flow Statement
for the six months ended 30 June 1998
6 mths 6 mths Year ended
ended 30 ended 30 31
June 1998 June 1997 December
(Unaudited) (Unaudited) 1997
(Audited)
Notes #000 #000 #000
__________________________________________________________________________
Net cash (outflow)/inflow from (56) (195) 140
operating (1) activities
Return on investment and servicing of (29) (20) (40)
finance
Taxation refund - 87 87
Capital expenditure and financial (11) (29) (50)
investment
__________________________________________________________________________
Cash (outflow)/inflow before
management of liquid resources and (96) (157) 137
financing
Management of liquid resources -
Cash withdrawn from short term 60 200 85
investments
Financing (41) (43) (117)
(2)
__________________________________________________________________________
(Decrease)/increase in cash in period (77) 0 105
__________________________________________________________________________
Notes to the Consolidated Cash Flow Statement
1. Reconciliation of the operating (loss)/profit to net cash
(outflow)/inflow from operating activities
6 mths 6 mths Year ended
ended 30 ended 30 31
June 1998 June 1997 December
(Unaudited) (Unaudited) 1997
(Audited)
#000 #000 #000
__________________________________________________________________________
Operating (loss)/profit (141) (228) 83
Depreciation charges 66 69 144
(Increase)/decrease in stocks (19) 5 20
Decrease in debtors 37 148 82
Increase/(decrease) in creditors 1 (186) (186)
Profit on sale of fixed assets 0 (3) (3)
__________________________________________________________________________
Net cash (outflow)/inflow from (56) (195) 140
operating activities
__________________________________________________________________________
2. Reconciliation of net cash flow to movement in net debt
6 mths 6 mths Year ended
ended 30 ended 30 31
June 1998 June 1997 December
(Unaudited) (Unaudited) 1997
(Audited)
#000 #000 #000
__________________________________________________________________________
(Decrease)/increase in cash for the (77) 0 105
period
Cash outflow from reduction in debt 41 43 91
__________________________________________________________________________
Change in net debt resulting from cash (36) 43 196
flows
New finance leases (15) - (33)
Translation differences 0 2 (3)
__________________________________________________________________________
Movement in net debt in the period (51) 45 160
Net debt at start of period (429) (589) (589)
__________________________________________________________________________
Net debt at end of period (480) (544) (429)
__________________________________________________________________________
END
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