RNS Number:0868Q
Lincat Group PLC
24 September 2003
LINCAT GROUP PLC
Lincat Preliminary Results for the year to 30 June 2003
Lincat Group plc, the publicly quoted manufacturer of commercial catering
appliances, bar equipment and domestic range cookers, announces full year
results to 30 June 2003.
Highlights
* 8% increase in operating profits from #4.3m to #4.7m
* Underlying earnings per share up 21% to 43.2p
* Total dividend raised from 17.5p to 18.5p per share
* Year end gearing of just 5% despite expenditure of #2.1m on share
buy-backs and #0.7m on acquisition of Britannia.
Commenting on the year's results, Martin Craddock, Chairman, said:
"Strong organic sales and profits growth in the UK is against the market trend
and represents an increase in market share. A fall in US sales has held back our
overall figures, which will therefore benefit from the anticipated recovery in
US demand. Our strategy of investing in our core businesses and repurchasing
shares at the appropriate time is generating exceptional earnings per share
growth for shareholders."
Contacts Martin Craddock, Chairman
Paul Bouscarle, Chief Executive
Lincat Group plc
01522 875555
24 September 2003
LINCAT GROUP PLC
CHAIRMAN'S STATEMENT
After a disappointing first six months, the Group performed strongly in the
second half to record a result from which we can take some satisfaction. At our
continuing operations sales were still flat but gross margins were up and
operating expenses fell.
Operating profits of #4.7m represented an 8% increase over #4.3m last year and
take us back to the levels achieved two years ago before most of our markets
turned down in late 2001. Underlying earnings per share were up 21% due to the
increase in operating profits coupled with the lower number of shares in issue
as a result of our share repurchase programme. This growth in earnings has given
us scope to raise the dividend for the seventh year in succession, during which
time it has risen by 126%.
Dividend
The Board has declared a final dividend of 12.9p, making a total for the year of
18.5p, an increase of 6% over last year's total of 17.5p. The dividend is
covered 2.3 times by earnings per share of 43.2p. If approved, the final
dividend will be payable on 27 November 2003 to all shareholders on the register
at the close of business on 7 November 2003.
Acquisition of Britannia
The acquisition of Britannia Kitchen Ventilation Ltd in November 2002 for #0.7m
marked our first move into an area of commercial kitchens that we believe has
good long term growth prospects. The end customers of Britannia's products are
similar to those using Lincat Ltd and IMC products and the route to market is
also similar, so there is an opportunity for the Company to benefit from their
knowledge and experience. We are pleased to welcome this highly regarded
business to the Group.
Group Strategy
During the year the Board reviewed the Group's strategic objectives and
reformulated its expectations of the operating subsidiaries, which have been
incorporated into each subsidiary's three year strategic plan.
The first priority for the Group remains the development of its existing
companies with a view to increasing competitiveness and growing sales and
profits. Whilst all five subsidiaries are at different stages of development,
each has clear growth opportunities and possesses the management skills and
financial means to achieve that growth. Subsidiary profit targets are expressed
as a rolling average, to discourage actions that achieve short-term gains at the
expense of long-term benefits.
We are also continually looking for suitable acquisitions that could both
enhance Group earnings and add value to the existing businesses. We make no
apology for exercising caution in this respect, as we are rigorous in
challenging assumptions relating to benefits flowing from post-acquisition
synergies.
During the year we have bought back a further 791,960 shares, representing 10%
of the shares in issue at the beginning of the financial year. The full impact
on earnings per share will not of course be felt until the end of the 2003/4
financial year. It is our policy to continue to repurchase shares so long as it
benefits shareholders generally and increases earnings per share, a core Group
objective.
Prospects
Despite the strong second half performance, it is still too early to forecast a
return to steady sales and profits growth. We expect any recovery, whether in
the US or Europe, to be slow and stuttering, conditions that are not conducive
to a sharp rise in consumer and business confidence. Under these circumstances
equipment purchases are likely to remain at today's depressed level for some
time to come.
Our operations' task, therefore, is to grow through winning market share at the
expense of weaker competitors. Each Group subsidiary either has or is working on
a detailed plan to improve its competitive position, by introducing new products
and improving existing products and by raising the quality of the support
service offered to both dealers and end customers. At the same time each is
tasked with driving all unnecessary cost out of the business.
Our record of out-performing the markets in which we operate is good and we have
confidence in the ability of our operations to continue to achieve their sales
and profits growth targets.
Martin Craddock
Chairman
LINCAT GROUP PLC
Consolidated profit and loss account
For the year ended 30 June 2003
2003 2003 2003 2002
Continuing Acquisitions Total
Operations
#'000 #'000 #'000 #'000
Turnover 29,685 866 30,551 29,733
Cost of sales (14,463) (479) (14,942) (14,641)
Gross profit 15,222 387 15,609 15,092
Other operating expenses (10,494) (432) (10,926) (10,778)
Goodwill amortisation - (17) (17) -
Operating profit 4,728 (62) 4,666 4,314
Profit on sale of long leasehold property - 430
Profit on ordinary activities before interest 4,666 4,744
Net interest payable (82) (46)
Profit on ordinary activities before taxation 4,584 4,698
Tax on profit on ordinary activities (1,381) (1,375)
Profit for the financial year 3,203 3,323
Dividends (1,260) (1,283)
Retained profit for the financial year 1,943 2,040
Earnings per share - basic and diluted 43.2p 40.6p
Earnings per share - underlying (excluding property 43.2p 35.8p
sale)
Ordinary dividend per share 18.5p 17.5p
LINCAT GROUP PLC
CONSOLIDATED BALANCE SHEET
As at As at
30 June 30 June
2003 2002
Restated
#'000 #'000
Fixed assets
Goodwill 518 -
Tangible assets 8,238 8,432
8,756 8,432
Current assets
Stocks 3,840 3,381
Debtors 5,734 5,480
Cash at bank and in hand 387 380
9,961 9,241
Creditors: Amounts falling due within one year (6,906) (5,624)
Net current assets 3,055 3,617
Total assets less current liabilities 11,811 12,049
Creditors: Amounts falling due after more than one year (12) -
Provisions for liabilities and charges (849) (824)
Net assets 10,950 11,225
Capital and reserves - equity
Called-up share capital 710 789
Share premium 1,067 1,067
Capital redemption reserve 254 175
Merger reserve 874 874
Profit and loss account 8,045 8,320
Shareholders' funds 10,950 11,225
LINCAT GROUP PLC
CONSOLIDATED cash flow STATEMENT
For the year ended 30 June 2003
2003 2002
#'000 #'000
Net cash inflow from operating activities 5,594 5,620
Returns on investments and servicing of finance
Interest (82) (47)
Taxation (1,243) (1,436)
Capital expenditure
Purchase of tangible assets (684) (865)
Proceeds from sale of tangible assets 78 1,109
(606) 244
Equity dividends paid (1,300) (1,460)
Acquisitions
Purchase of subsidiary undertaking (734) -
Cash acquired with subsidiary undertaking 38 -
(696) -
Cash inflow before financing and use of liquid resources 1,667 2,921
Financing
Purchase of share capital (2,126) (2,246)
Decrease in debt (13) -
(2,139) (2,246)
(Decrease)/increase in cash (472) 675
LINCAT GROUP PLC
NOTES TO CONSOLIDATED cash flow
For the year ended 30 June 2003
Reconciliation of operating profit to net cash inflow from operating activities
2003 2002
#'000 #'000
Restated
Profit before interest 4,666 4,744
Goodwill amortisation 17 -
Depreciation 893 911
Loss/(profit) on disposal of tangible fixed assets 1 (462)
Increase in provisions 13 140
Increase in stocks (393) (254)
(Increase)/decrease in debtors (4) 470
Increase in creditors 401 71
Net cash inflow from operating activities 5,594 5,620
Reconciliation of net cash flow to movement in net debt
2003 2002
#'000 #'000
(Decrease)/increase in cash in the year (472) 675
Cash flow from change in net debt and lease financing 13 -
Change in cash resulting from cash flows (459) 675
Loan and hire purchase acquired with subsidiary (40) -
Exchange adjustments (54) (72)
Movement in cash in the year (553) 603
Net debt at the start of the year (30) (633)
Net debt at the end of the year (583) (30)
LINCAT GROUP PLC
CONSOLIDATED Statement of total recognised gains and losses
For the year ended 30 June 2003
2003 2002
#'000 #'000
Profit for the financial year 3,203 3,323
Foreign currency translation (92) (125)
Total recognised gains and losses for the year 3,111 3,198
Notes
1 The financial information presented does not amount to full accounts
within the meaning of section 240 of the Companies Act 1985. Full accounts
for the year ended 30 June 2002, with an unqualified audit report, have been
filed with the Registrar of Companies.
2 The basic and diluted earnings per share calculation is based on
earnings of #3,203,000 (2002: #3,323,000) and a weighted average number of
Ordinary Shares of 7,417,006 (2002: 8,182,475).
3 The earnings per share calculation excluding the sale of property is
based on earnings of #3,203,000 (2002: #2,927,000) and a weighted average
number of Ordinary Shares of 7,417,006 (2002: 8,182,475).
4 The number of Ordinary Shares in issue at 30 June 2003 was
7,096,817 (2002: 7,888,777).
5 The restatement of the 2002 balance sheet and cash flow relates to the
reclassification of product warranties of #462,000 within "Provisions for
liabilities and charges"; they were previously included in "Creditors:
Amounts falling due within one year". This adjustment has no effect on
current or prior year profit and loss accounts nor cash flow statements.
6 The annual report and accounts will be sent to shareholders in due
course. Further copies of this announcement are available from The Company
Secretary, Lincat Group plc, Whisby Road, Lincoln LN6 3QZ.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAKNDALPDEFE