Hydro Intnl. PLC - Final Results
March 19 1999 - 2:30AM
UK Regulatory
RNS No 3525c
HYDRO INTERNATIONAL PLC
19th March 1999
HYDRO INTERNATIONAL PLC FINAL 18 March 1999
PRELIMINARY ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 31 DECEMBER 1998
CHAIRMANS STATEMENT
Technical development and financial consolidation have formed
the cornerstones of the Groups advancement in 1998. In
keeping with the past 3 years, the second half of 1998 showed
a marked financial improvement over the first six months, with
a profit of #206,000 being achieved in the six months to 31
December 1998. This has resulted in a profit before tax for
the year of #36,000 compared to a profit before tax of
#31,000 in 1997. Whilst the years turnover and profit shows
little change from 1997, I am pleased to report that the
closing order book exceeds #1 million; two and a half times
that on which we started 1998. Equally pleasing is the fact
that both the UK and the US operating companies achieved
profitability.
The major technical achievement of the year has been the
bringing of the Hydro-Jet Screen (Trademark) to the market.
This non-powered, self-cleansing screen has been developed to
meet the UK water industry demands for a simple, robust and
low cost screening solution. The first two units are now
installed, with further orders already received and an
encouraging level of enquiries. Key site demonstrations are
being undertaken to show the effectiveness of the screen on
both the combined sewer overflow and the sewage treatment
markets. The process of development, incorporating rigorous
testing at the National CSO Test Facility, site demonstrations
and marketing has been assisted by the award of a SMART grant
from the Department of Trade and Industry. I congratulate all
of our staff involved with the Jet Screens success.
Elsewhere in the UK market, the Hydro-Brake(Registered
Trademark Flow Control packaged with our plastic honeycomb
storage medium (Stormcell(Trademark)) continues to make
market progress. Sales of the Stormcell(Trademark) product
have been assisted by an increasing level of acceptance from
developers and consultants.
The supply of flow controls to three phases of the City of
Evanston flood alleviation scheme has underpinned the US
results. A healthy order book has been built up in the US,
largely consisting of grit separators (Grit King(Registered
Trademark)) for waste water treatment plants. Included in
this is the #425,000 order for Chattanooga, where our scope of
supply includes five units - this is scheduled for delivery
during 1999. Our two major US sites are progressing well,
with Columbus, Georgia in its third year of operation and the
New York Flushing Meadow site now completed its first year of
operation using hydrodynamic vortex separators (Storm
King(Registered Trademark)).
The Groups first storm overflow separator (Swirl-
Cleanse(Trademark)) order was delivered in Australia during
September. A working installation will strengthen our
position in Australia from which we can continue to build.
Strong contacts are being built with the Brisbane and Sydney
water companies.
Product development continues to be a high priority to the
Group and a full report on Development activities is included
as part of the Operating and Financial Review. Work was
completed in 1998 on the Hydro-Jet Screen(Trademark) and an
improved version of the Grit King(Registered Trademark)
classifier. To assist in the development of a wider product
range, we have entered into a licence agreement for a wedge
wire screen and a licence agreement to import oil interceptors
from France.
Excellent technical progress is being made, albeit resultant
sales have developed more slowly than your Board had
originally hoped. Although it is still possible to achieve
our stated aim of turnover at an annualised rate of #10
million by the end of 1999, a more modest outcome is probable.
The potential for Hydro's equipment remains high. In both the
UK and US there is evidence of increased focus on achieving a
cleaner environment, including river water quality, and we are
confident that this will lead to the recognition of the
benefits of innovative technology to meet the standards at
lower overall cost than current conventional solutions.
I would like to welcome David Latham and Chris Williams to the
Board. David joined us in July as a non-executive director
and brings with him a wealth of knowledge in the water
industry in both the UK and overseas following from his time
with Anglian Water. Chris as Operations Director of HRD, our
UK subsidiary, is well experienced in our operation and has
overseas consulting experience. Congratulations are due to
Bob Andoh on gaining a Visiting Professorship from Liverpool
John Moores University. I would also like to take this
opportunity to give my thanks and appreciation to all our
staff for their hard work in the last twelve months.
Ronald D N Somerville, CBE
Chairman
March 1999
Preliminary Results
Consolidated Profit and Loss Account
Year ended 31 December 1998
1998 1997
#000 #000
Turnover - continuing operations 3,575 3,525
Gross profit 2,085 2,128
Administrative expenses (1,995) (2,045)
Operating profit - continuing
operations 90 83
Net interest payable (54) (52)
Profit on ordinary activities before
taxation 36 31
Taxation on profit on ordinary
activities - -
Profit for the financial year 36 31
Dividends paid - -
Retained profit for the financial 36 31
year
Earnings per ordinary share 0.27p 0.23p
Fully diluted earnings per ordinary
share 0.26p 0.22p
Consolidated Balance Sheets
31 December 1998
1998 1997
#000 #000
Fixed assets
Tangible assets 952 995
Current assets
Stocks 22 34
Debtors 1,225 958
Cash and short term deposits 315 326
1,562 1,318
Creditors: amounts falling due
within one year (1,203) (1,052)
Net current assets 359 266
Total assets less current 1,311 1,261
Liabilities
Creditors: amounts falling due after (572) (560)
more than one year
Net assets 739 701
Capital and reserves
Called up share capital 658 658
Share premium 2,100 2,100
Profit and loss account (2,019) (2,057)
Total equity shareholders' funds 739 701
Statement of Total Recognised Gains and Losses
Year ended 31 December 1998
1998 1997
#000 #000
Profit for the financial year 36 31
Currency translation differences on
foreign currency net investments 2 (3)
Total recognised gains and losses 38 28
related to the year
Reconciliation of Movement in Group Shareholders' Funds
Year ended 31 December 1998
1998 1997
#000 #000
Total recognised gains and losses
related to the year 38 28
Adjustment to share premium account - (26)
Net increase in shareholders' funds 38 2
Opening shareholders' funds 701 699
Closing shareholders' funds 739 701
Consolidated Cash Flow Statement
Year ended 31 December 1998
1998 1997
#000 #000
Net cash inflow from operating activities 167 140
Returns on investments and servicing of
finance
Interest received 11 13
Interest paid (87) (53)
Net cash outflow from returns on
investments and servicing of finance (76) (40)
Taxation
Corporation tax refund - 87
Capital Expenditure and Financial
Investment
Payments to acquire tangible fixed assets (23) (62)
Receipts from sale of tangible fixed 2 12
assets
Net cash outflow from Capital Expenditure
and Financial Investment (21) (50)
Cash inflow before management of liquid
resources and financing 70 137
Management of Liquid Resources
Cash withdrawn from short term deposits - 85
Financing
Debt due within a year
Repayment of secured loan (26) (25)
Debt due beyond a year
Increase in long term loan 5 -
Capital element of finance lease rental (27) (66)
payments
Movement on share premium account - (26)
Decrease in debt (48) (117)
Increase in cash in year 22 105
Notes to the Accounts
The preliminary announcement has been prepared on the basis of
the accounting policies as stated in the Financial Statements
for the years ended 31 December 1997 and 1998.
Earnings per share
The earnings per ordinary share for each year have been
calculated on the profit after tax for the year, divided by
the weighted average number of ordinary shares in issue in the
relevant year. The number of ordinary shares used in the
calculation is 13,158,716 shares in both years. The fully
diluted earnings per ordinary share is calculated after the
inclusion of share options and the weighted average of
ordinary shares used in the calculation is 13,979,985 (1997 -
13,808,053)
Your Board does not recommend the payment of a dividend in
respect of the year ended 31 December 1998.
Status of information
The financial information set out above is unaudited and does
not amount to full accounts for the purposes of Section 240 of
the Companies Act 1985. The profit and loss account and cash
flow statement for the year to 31 December 1997 and the
balance sheet as at that date represent an abridged version of
the audited accounts of the Group which have been filed with
the Registrar of Companies. The auditors reported on the
accounts for the year ended 31 December 1997. Their report
was unqualified and did not contain statements under Section
237(2) or (3) of the Companies Act 1985.
Full audited accounts of Hydro International plc for the
twelve months ended 31 December 1998 will be despatched to
shareholders within the next 42 days and copies will be
available from the Company's registered office from 10 May
1999. The audited accounts will be delivered to the Registrar
of Companies following the Annual General Meeting.
This announcement was approved by the Board of Hydro
International plc on 18 March 1999
Enquiries
Keith Marshall, Director/Company Secretary, Hydro International plc
(01275) 878371
Rod Venables, Director, Greig Middleton & Co Limited
(0171) 655 4000
END
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