Longmead Group PLC - Interim Results
March 17 1999 - 10:38AM
UK Regulatory
RNS No 2662c
LONGMEAD GROUP PLC
17th March 1999
CHAIRMAN'S STATEMENT
Trading Results
As I anticipated in my Statement at the last year end, trading
conditions have continued to be difficult. The interim results
for the half year ended 30 January 1999 are very disappointing
with turnover for the period falling to #1.754 million (#2.055
million) and profits before taxation falling to #12,000
(#236,000). The problems highlighted in my Statement have
continued with retail sales depressed and competition from low
cost imports increasing. Successive interest rate cuts have done
very little to revitalise the manufacturing sector so far and
margins continue to be under extreme pressure with discounting now
becoming a feature of every day operating. Strenuous efforts are
being made to improve sales and margins and these are commented on
below.
Bathroom Accessories
Sales of bathroom accessories fell by 14% compared with the
previous year, very largely due to a cut back in demand from major
customers. We have concentrated on product development in this
area to enable us to get into new markets and to counter the
effect of cheap foreign imports through better design and
presentation. Some seven new product ranges are being shown at
the International Bathroom Show in Frankfurt later this month and
we are optimistic that this will lead to an increase in sales both
at home and overseas. We are beginning to use materials other
than simply ceramic in our products and two of the new ranges
incorporate metal components and we are also concentrating much of
our development on free-standing ranges which are now increasing
in popularity in the UK.
We have invested heavily in new plant and equipment over the last
six months to reduce both labour and energy costs with the aim of
improving margins and this programme will continue.
Door Furniture
Sales in this section of the business fell by a similar amount to
that of bathroom accessories but we have managed to reduce costs
by manufacturing more products "in-house". Since the last year
end we have acquired new turning equipment and presses and we will
be investing in new automatic spray equipment over the next few
months.
New designs and products have been launched from which we have
received an encouraging response.
Dividend
Your Board remain confident in the longer term prospects of the
Company and as a result it is proposed to pay an interim dividend
of 0.5p per ordinary share. This will be paid on 30th April 1999
to shareholders on the register on 6th April 1999.
Board of Directors
The Board of Directors was reconstructed on 1st January of this
year. As I have now passed the age of 65, I decided to step down
as Managing Director but to continue as Chairman on a part-time
basis. Nigel Newman, the Finance Director, was promoted to
Managing Director and David Wheeler, the Financial Controller,
became Finance Director. The new team has settled in well and I
wish them every success in their new responsibilities.
Future Prospects
Although the reported results are quite unsatisfactory, we believe
that we are taking the right steps to meet the challenge of the
future. We have a major programme of development and investment
which we believe will lead to significant improvements in the
longer term. We continue to seek suitable acquisitions but, so
far, we have not been able to identify a target that meets our
requirements.
Trading during the remainder of the current year will continue to
be difficult and I expect the results to be substantially below
those achieved last year. I am confident, however, that the work
currently being carried out on product development and cost
reduction should lead to growth in both turnover and profits in
the longer term.
R E W Newman
Chairman
17 March 1999
UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR 26 WEEKS ENDED 30 JANUARY 1999
Unaudited Unaudited Audited
26 weeks to 26 weeks to 52 weeks to
30 Jan 1999 31 Jan 1998 1 Aug 1998
#'000 #'000 #'000
TURNOVER 1,754 2,055 4,046
Cost of Sales (1,220) (1,295) (2,716)
_______ _______ ______
Gross Profit 534 760 1,330
Operating Costs (465) (432) (885)
_______ _______ ______
OPERATING PROFIT 69 328 445
Interest Receivable 2 3 9
Interest Payable (59) (95) (153)
_______ _______ ______
PROFIT ON ORDINARY ACVTIVITIES 12 236 301
BEFORE TAXATION
Tax on profit on ordinary (3) (66) (61)
activities
______ ______ ______
PROFIT ON ORDINARY ACTIVITIES 9 170 240
AFTER TAXATION
Dividends (18) (9) (81)
______ ______ ______
RETAINED (LOSS)/PROFIT FOR THE (9) 161 159
PERIOD ===== ===== =====
EARNINGS PER SHARE (PENCE) 0.26 6.33 7.65
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 30 JANUARY 1999
Unaudited Unaudited Audited
as at as at as at
30 Jan 1999 31 Jan 1998 1 Aug 1998
#'000 #'000 #'000
FIXED ASSETS
Tangible Assets 2,555 2,645 2,603
_____ _____ _____
CURRENT ASSETS
Stocks 1,851 1,648 1,844
Debtors 987 1,062 897
Cash at bank and in hand - 210 30
_____ ______ _____
2,838 2,920 2,771
CREDITORS: amounts falling due
within one year (1,176) (1,191) (1,016)
_____ ______ ______
NET CURRENT ASSETS 1,662 1,729 1,755
_____ ______ ______
TOTAL ASSETS LESS CURRENT 4,217 4,374 4,358
LIABILITIES
CREDITORS: amounts falling due (678) (838) (811)
after one year
PROVISONS FOR LIABILITIES & (68) (59) (68)
CHARGES
______ _______ ______
3,471 3,477 3,479
===== ====== =====
CAPITAL AND RESERVES
Called up share capital 361 360 361
Share premium account 1,225 1,221 1,225
Revaluation reserve 294 299 297
Profit and loss account 1,591 1,597 1,596
_____ _____ _____
TOTAL EQUITY SHAREHOLDERS' 3,471 3,477 3,479
FUNDS ===== ==== =====
UNAUDITED CASH FLOW STATEMENT
FOR 26 WEEKS ENDED 30 JANUARY 1999
Unaudited Unaudited Audited
26 weeks to 26 weeks to 52 weeks to
30 Jan 1999 31 Jan 1998 1 Aug 1998
#'000 #'000 #'000
CASH FLOW FROM OPERATING
ACTIVITIES (Note 1) 97 158 271
Returns on investment and
servicing of finance (59) (106) (153)
Taxation - (111) (278)
Capital expenditure and 10 (61) (96)
financial investment
Equity dividends paid (72) (92) (101)
_____ ______ ______
NET CASH INFLOW/(OUTFLOW)
BEFORE FINANCING (24) (212) (357)
Issue of ordinary shares - 1,282 1,287
Financing - (172) (679) (719)
(decrease)/increase in debt
_____ _____ _____
(DECREASE)/INCREASE IN CASH (196) 391 211
==== ===== =====
NOTE 1: Reconciliation of operating profit to net cash inflow
from operating activities
Unaudited Unaudited Audited
26 weeks to 26 weeks to 52 weeks to
30 Jan 1999 31 Jan 1998 1 Aug 1998
#'000 #'000 #'000
Operating profit 69 328 445
Depreciation 106 103 204
(Profit) on sale of fixed (18) - (7)
assets
(Increase) in stock (7) (191) (387)
(Increase)/decrease in debtors (89) (95) 70
Increase/(decrease) in 36 13 (54)
creditors
_____ _____ _____
97 158 271
==== ===== =====
Note 2: Reconciliation of net cash flow to movement in net debt
Unaudited Unaudited Audited
26 weeks to 26 weeks to 52 weeks to
30 Jan 1999 31 Jan 1998 1 Aug 1998
#'000 #'000 #'000
(Decrease)/Increase in cash in (196) 391 211
the period
Cash inflow/(outflow) from 172 679 719
increase in debt and lease and _____ _____ _____
hire purchase financing
(24) 1,070 930
New finance lease and hire (51) (40) (57)
purchase obligations _____ ______ _____
Movement in net debt in period (75) 1,030 873
Net debt at beginning of (986) (1,859) (1,859)
period
_____ ______ ______
Net debt at end of period (1,061) (829) (986)
===== ===== =====
ANALYSIS OF NET DEBT
At 1 Cash Other At 30
August Flow non-cash January
1998 changes 1999
#'000 #'000 #'000 #'000
Cash 30 (30) - -
Overdraft - (166) - (166)
_____ ______ ______ ______
30 (196) - (166)
Debt due within (150) 135 (135) (150)
one year
Debt due after (720) - 135 (585)
one year
Finance leases (146) 37 (51) (160)
_____ ______ ______ ______
TOTAL (986) (24) (51) (1,061)
==== ===== ===== =====
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 3,609,391 in the period (26 weeks to
31 January 1998: 2,686,140 and 52 weeks to 1 August 1998:
3,144,016).
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 1998
statutory financial statements.
Copies of the interim financial statement will be dispatched to
shareholders in due course.
Copies of this announcement are available from Smith & Williamson,
No 1 Riding House Street, London, W1A 3AS.
END
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