Longmead Group PLC - Interim Results
March 27 1998 - 2:30AM
UK Regulatory
RNS No 1128j
THE LONGMEAD GROUP PLC
26th March 1998
THE LONGMEAD GROUP plc
CHAIRMAN'S STATEMENT
Trading Results
I am pleased to report an increase in profits before tax of nearly
12% for the six months ended 31st January 1998 compared with the
previous year. The unaudited results show a profit before tax of
#236,000 (Six months to 25th January 1997: #211,000). Turnover in
the period fell slightly from #2.099 million to #2.055 million which
I explain further below. Earnings per share, adjusted for the
average number of shares in issue during the period, increased from
6.09p to 6.33p.
Bathroom Accessories
Sales declined from #1.727 million to #1.556 million, mainly as a
result of a reduction in purchases by one of our major customers.
In the previous half year to 25th January 1997 we had supplied some
200 new stores with opening stock and this inflated sales in the
period by some 25%. As expected, there was some fall back in order
levels as normal trading got under way. In addition, export sales
in 1997-98 suffered from the strength of Sterling which affected
both our own direct exports and sales to some UK customers, who in
turn export our products. However, although sales have declined,
margins have improved which has compensated for this.
Door Furniture
Sales increased by over 22% compared with the first half of the
previous year. In October 1997, the Balmoral operation in Tipton,
Staffs, was closed down and the business was transferred to our main
premises in Axminster. As a result of this transfer, there was a
significant improvement in margins in the latter part of the period
arising from our ability to use labour more efficiently by combining
the production of bathroom accessories and door furniture. We are
gradually phasing in the manufacture of porcelain components for our
door furniture ranges, which we currently buy in, and this will lead
to a further improvement in margins.
Dividend
At the time of the placing, it was reported that our policy would be
to pay one third of the annual dividend at the interim stage and two
thirds at the final. However, for the first dividend, account would
be taken of the period of time the shares have been held since the
placing. Accordingly it is proposed to pay an interim dividend of
0.25p per ordinary share on 28th April 1998 to all shareholders on
the register on 14th April 1998.
Board of Directors
Since the placing we have been actively looking for a non-executive
director to join the Board. I am pleased to report that David Bird
will be joining the Board as a non-executive director on 6th April
1998. David is 58 years of age and was a partner in a leading firm
of Chartered Accountants until his retirement in 1996. He acts as a
consultant to a number of companies and is a non-executive director
of one other AIM company.
Prospects
The second half has started satisfactorily. The additional
business arising from indirect sales to Department Stores is showing
very encouraging results and, of the two new major customers
mentioned in the Placing Document, one is performing well above
expectation although the other has been somewhat disappointing. We
are expanding our labour force to meet increased demand but, due to
the probable mix of sales and the continuing adverse effect of the
strength of Sterling on export sales, there may be some pressure on
margins. Your Board is looking at potential acquisitions and,
although it is difficult to predict the pattern of sales, I am
cautiously optimistic about the future.
R E W Newman, Chairman
26th March 1998
UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR 26 WEEKS ENDED 31 JANUARY 1998
Unaudited Unaudited Audited
26 weeks to 26 weeks to 53 weeks to
31 January 25 January 2 August
1998 1997 1997
#'000 #'000 #'000
TURNOVER
- continuing 2,055 1,711 3,325
operations - 388 976
- acquisitions _____ _____ _____
2,055 2,099 4,301
Cost of Sales (1,295) (1,385) (2,767)
_______ _______ ______
Gross Profit 760 714 1,534
Operating Costs (432) (432) (860)
______ ______ ______
OPERATING PROFIT
- continuing 328 302 581
operations
- acquisitions - (20) 93
_____ _____ _____
TOTAL OPERATING PROFIT 328 282 674
Interest Receivable 3 3 3
Interest Payable (95) (74) (156)
_____ _____ _____
PROFIT ON ORDINARY
ACTIVITIES BEFORE
TAXATION 236 211 521
Tax on profit on (66) (59) (147)
ordinary activities
_____ _____ _____
PROFIT ON ORDINARY
ACTIVITIES AFTER
TAXATION 170 152 374
Dividends (9) - (50)
_____ _____ _____
RETAINED PROFIT FOR THE
PERIOD 161 152 324
===== ===== =====
EARNINGS PER SHARE
(PENCE) 6.33 6.09 15.01
There are no recognised gains and losses other than the gains and
losses set out in the profit and loss account.
UNAUDITED CONSOLIDATED BALANCE SHEET
AT 31 JANUARY 1998
Unaudited as Unaudited as Audited as
at at at
31 Jan 1998 25 Jan 1997 2 August
#'000 #'000 1997
#'000
FIXED ASSETS
Tangible Assets 2,645 2,087 2,646
______ ______ ______
CURRENT ASSETS
Stocks 1,648 1,386 1,457
Debtors 1,062 906 967
Cash at bank and in hand 210 1 1
______ ______ ______
2,920 2,293 2,425
CREDITORS: amounts
falling due within one (1,191) (1,345) (1,540)
year
______ ______ ______
NET CURRENT ASSETS 1,729 948 885
______ ______ ______
TOTAL ASSETS LESS
CURRENT LIABILITIES 4,374 3,035 3,531
CREDITORS: amounts
falling due after one (838) (1,119) (1,439)
year
PROVISIONS FOR
LIABILITIES AND CHARGES (59) (55) (59)
______ _______ _______
3,477 1,861 2,033
===== ====== ======
CAPITAL AND RESERVES
Called up share capital 360 249 249
Share premium account 1,221 50 50
Revaluation reserve 299 304 302
Profit and loss account 1,597 1,258 1,432
______ ______ ______
Total equity 3,477 1,861 2,033
shareholders' funds
===== ===== =====
UNAUDITED CASH FLOW STATEMENT
FOR 26 WEEKS ENDED 31 JANUARY 1998
Unaudited Unaudited Audited
26 weeks 26 weeks to 53 weeks
to 31 Jan 1998 25 Jan 1997 to
2 Aug
1997
#'000 #'000 #'000
CASH FLOW FROM OPERATING
ACTIVITIES (Note 1) 158 133 475
Returns on investment and
servicing of finance (106) (68) (142)
Taxation (111) (48) (48)
Capital expenditure and
financial investment (61) (70) (630)
Acquisitions and disposals - (678) (678)
Equity dividends paid (92) - (8)
_____ _____ _____
NET CASH INFLOW/(OUTFLOW) (212)
BEFORE FINANCING (731) (1,031)
Issue of ordinary shares 1,282 - -
Financing - (679) 561 815
(decrease)/increase in
debt
_____ _____ ______
INCREASE/(DECREASE) IN 391 (170) (216)
CASH
===== ===== =====
NOTE 1: Reconciliation of operating profit to net cash inflow
from operating activities
Unaudited Unaudited Audited
26 weeks to 26 weeks to 53 weeks
31 Jan 1998 25 Jan 1997 to
#'000 #'000 2 August
1997
#'000
Operating profit 328 282 674
Depreciation 103 92 190
(Profit) on sale of fixed - (5) (15)
assets
(Increase) in stock (191) (261) (332)
(Increase)/decrease in (95) 120 61
debtors
Increase/(decrease) in 13 (95) (103)
creditors
______ ______ ______
158 133 475
===== ===== =====
NOTE 2: Reconciliation of net cash flow to movement in net debt
Unaudited Unaudited Audited
26 weeks to 26 weeks to 53 weeks
31 Jan 1998 25 Jan 1997 to
#'000 #'000 2 August
1997
#'000
Increase/(decrease) in 391 (170) (216)
cash in the period
Cash inflow/(outflow) from
increase in debt and lease 679 (561) (815)
and hire purchase
financing
_____ _____ ______
1,070 (731) (1,031)
Acquired from subsidiary - (41) (41)
New finance lease and hire
purchase obligations (40) (51) (140)
_____ _____ _____
Movement in net debt in 1,030 (823) (1,212)
period
Net debt at beginning of (1,859) (647) (647)
period
______ ______ ______
Net debt at end of period (829) (1,470) (1,859)
===== ===== =====
Analysis of net debt
At 2 Cash Other At 31
August Flow non-cash January
1997 changes 1998
#'000 #'000 #'000 #'000
Cash 1 209 - 210
Overdraft (182) 182 - -
_____ _____ _____ _____
(181) 391 - 210
Debt due within one (185) 170 (135) (150)
year
Debt due after one year (1,335) 465 135 (735)
Finance leases (158) 44 (40) (154)
_____ _____ _____ _____
TOTAL (1,859) 1,070 (40) (829)
===== ==== ==== ====
NOTE 3: Earnings per share
The earnings per ordinary share is calculated on the profit on
ordinary activities after taxation and on a weighted average of
ordinary shares in issue of 2,686,140 in the period (26 weeks to 25
January 1997 and 53 weeks to 2 August 1997 : 2,490,780)
NOTE 4: Preparation of interim financial statements
These unaudited interim financial statements have been prepared on
the basis of the accounting policies set out in the Group's 1997
statutory financial statements.
Copies of this announcement will be despatched to shareholders.
Copies of this announcement are available from Smith & Williamson,
No 1 Riding House Street, London, W1A 3AS.
END
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