RNS Number:1384C
Meriden Group PLC
28 April 2006
28 April 2006
Enquiries:
Russell Stevens 07860 562621
Chief Executive Russell@meriden-group.co.uk
Jonathan Wright 020 7107 8000
Seymour Pierce Limited
Meriden Group Plc (the "Company" or "the Group")
Interim results for the six months ended 31 January 2006
Strategic Highlights
* The Group continues to review exit opportunities with regards to its
Logistics division
* Following the Chancellors decision on 6 April to remove the tax efficient
benefits on the Home Computer Initiative it appears that there will be a
significant loss of future revenue streams.
* The Group continues to fulfil its commitments under pre budget contracted
HCI schemes
Financial Highlights
* The Group losses totalled #424,024 for the six month period
* The Logistics division impacted significantly on the Groups losses
* No interim dividend is recommended
* Loss per share of 0.12 pence (2005: loss 0.29)
Commenting Russell Stevens, Chief Executive said:
'The board has spent significant time over the last six months attempting to
invoke a turnaround strategy with respect to its Logistics division whilst
looking at all possible exit routes. Currently no final exit route has been
decided upon. However, strategies are in place to resolve this matter in the
near future, in addition the monthly losses have begun reducing and consequently
the Logistics division is moving towards a break-even position.
The Chancellor's decision to remove the tax efficient benefits on the HCI
schemes was extremely disappointing given the investment on both people and
technology which Meriden had undertaken in the last two years. Meriden is
continuing to work with its IT suppliers to see what opportunities there may be
in the new environment and we will inform our shareholders as soon as this is
concluded.
As a board we remain convinced that once a resolution has been found to the
issues over the divestment of the Logistics division then a return to
profitability will be imminent.'
Chairman's Statement
I am pleased to present my Chairman's report for Meriden Group Plc for the six
months ended 31 January 2006.
During the period the Group made pre tax losses of #424,024 (2005: profit
#219,555) on a turnover of #7,674,835 (2005: #4,400,692). For the first time,
the Directors are recommending that no dividend be paid
In my 2006 year end Statement I referred to the Board's intention to divest
non-core activities. As previously noted during the 2005 financial year, we
closed the Publishing Division and the Scottish Branch of the Logistics
division. During the first half of the financial year, the Group has been
unable to divest the French Logistics division, which has continued to make
significant losses and the results for the Group have consequently again been
depressed. It is still the Company's objective secure an exit from the logistics
business during the second half of 2006.
The Employee Benefits Division, which was launched in 2004, has won a large
number of prestige clients wishing to implement Home Computer Schemes (HCI's).
These schemes enable their employees to acquire computers in a tax efficient
manner. The Chancellor's recent budget statement removed these benefits from 6th
April 2006. Meriden is continuing to fulfil its commitments under pre-existing
contracts and is working with the industry and government to see if an approved
'son of HCI' scheme can be delivered.
The remaining core divisions of Marketing & Communications and Management
Consultancy have continued to deliver acceptable but unspectacular results
during the first half of this year. The IT solutions division has suffered a
poor first half and significant efforts are being expended on this division to
restructure and reduce the cost base.
Following its floatation on Aim in 2001 the Group had been profitable until
2005. Since then the losses sustained by the Logistics business have severely
strained Meriden's resources and the probable loss of the HCI-related business
removes a significant revenue and profit stream from the immediate future. The
Directors are confident that the Group can return to profitability immediately
following the exit of the Logistics business, that shareholder value can be
enhanced by further acquisitions and that a dividend will be restored from the
2006 year-end.
The Board is delighted to welcome newcomers to the Meriden family and as always
we thank all of our staff for their hard work. The Board would also thank its
shareholders for their loyalty during these very difficult times for the Group.
Derek Hall
28 April 2006
Consolidated Profit and Loss Account for the 6 months ended 31 January 2006
Note 6 months 6 months Year
ended ended ended
31 January 31 January 31 July
2006 2005 2005
(unaudited) (unaudited) (audited)
# # #
Turnover 7,674,835 4,400,692 8,891,713
Cost of sales (7,227,697) (3,317,327) (7,718,875)
----------- ----------- -----------
Gross profit 447,138 1,083,365 1,172,838
Administrative expenses (826,405) (867,507) (1,950,583)
----------- ----------- -----------
Operating (loss)/profit (379,267) 215,858 (777,745)
Profit on disposal of fixed
assets 886 - -
Interest receivable 8,163 5,093 712
Interest payable (53,806) (1,396) (95,972)
----------- ----------- -----------
(Loss)/profit on ordinary
activities before taxation (424,024) 219,555 (873,005)
Taxation - (70,000) (12,805)
----------- ----------- -----------
(Loss)/profit for the
financial period (424,024) 149,555 (885,810)
Dividends - (29,000) (49,700)
----------- ----------- -----------
Retained (loss)/profit for the
period (424,024) 120,555 (935,510)
----------- ----------- -----------
Basic and diluted (loss)/
earnings per share (pence) 3 (0.12) 0.052 (0.29)
Dividend per share for the
period (pence) - 0.010 0.016
----------- ----------- -----------
The company has no recognised gains or losses other than the profit for the
period, which has been derived from continuing operations.
Consolidated Balance Sheet as at 31 January 2006
Note As at As at As at
31 January 31 January 31 July
2006 2005 2005
(unaudited) (unaudited) (audited)
# # #
Fixed assets
Tangible assets 1,241,140 1,173,632 1,344,842
Fixed asset investments 177,853 177,853 177,853
----------- ----------- -----------
1,418,993 1,351,485 1,522,695
Current assets
Stocks and work in progress 136,109 273,721 134,220
Debtors 4,138,970 4,380,292 3,884,527
Cash at bank and in hand 198,790 241,125 400,049
----------- ----------- -----------
4,473,869 4,895,138 4,418,796
Current liabilities falling
due within one year (3,922,893) (3,404,967) (3,406,918)
----------- ----------- -----------
Net current assets 550,976 1,490,171 1,011,878
----------- ----------- -----------
Total assets less current
liabilities 1,969,969 2,841,656 2,534,573
Creditors: Amounts falling due
after one year (798,482) (770,880) (939,062)
Provisions for liabilities and
charges (5,977) (5,977) (5,977)
----------- ----------- -----------
Net assets 1,165,510 2,064,799 1,589,534
----------- ----------- -----------
Capital and reserves
Called up share capital 345,000 290,000 345,000
Share premium 1,049,155 523,355 1,049,155
Profit and loss account (228,645) 1,251,444 195,379
----------- ----------- -----------
Equity shareholders' funds 5 1,165,510 2,064,799 1,589,534
----------- ----------- -----------
Consolidated Cash Flow Statement for the 6 months ended 31 January 2006
Note 6 months 6 months Year
ended ended ended
31 January 31 January 31 July
2006 2005 2005
(unaudited) (unaudited) (audited)
# # #
Net cash (outflow)/inflow from
operating activities 6 (74,511) 74,881 (394,329)
Return on investments
Interest received 8,163 5,093 712
Interest payable (53,806) (1,396) (95,972)
----------- ----------- -----------
Net cash (outflow)/inflow from
returns on investment and
servicing of finance (45,643) 3,697 (95,260)
Tax paid (47,497) (80,702) (74,138)
Capital expenditure and
financial investment
Payments to acquire tangible
fixed assets (32,600) (1,006,168) (1,349,925)
Receipts from the sale of
tangible fixed assets 13,988 - -
----------- ----------- -----------
Net cash (outflow)/inflow from
capital expenditure and
financial investments (18,612) (1,006,168) (1,349,925)
Dividend paid (112) (58) (66,421)
----------- ----------- -----------
Net cash (outflow)/inflow
before financing (186,375) (1,008,350) (1,980,073)
Financing
Issue of ordinary shares for
cash - - 580,800
Bank loan drawdowns - 963,600 1,272,507
Repayment/other movements in
bank loans (9,231) - -
Increase in invoice
discounting facilities 42,994 13,598 149,079
Capital element of finance
lease rentals (1,141) - (964)
----------- ----------- -----------
Net cash inflow from financing 32,622 977,198 2,001,422
----------- ----------- -----------
(Decrease)/Increase in cash 7 (153,753) (31,152) 21,349
----------- ----------- -----------
Notes to the Interim Results for the period ended 31 January 2006
1 Basis of preparation
The interim report does not represent statutory accounts within the meaning
of section 240 Companies Act 1985. Comparative figures for the year ended 31
July 2005 are an abridged version of the Group's full accounts which carries
an unqualified audit report and have been delivered to the Registrar. The
interim report has not been audited or reviewed but was approved by the
Board on 28 April 2006.
2 Basis of consolidation
The Consolidated Profit and Loss Account, Balance Sheet and Cash Flow
Statement consolidate those of the Company and its subsidiary undertakings
as at 31 January 2006. Intra-group transactions have been eliminated in
full.
3 Basic earnings per share
The calculation of the basic earnings per share is based on the profit on
ordinary activities after taxation and on the weighted average number of
shares in issue during the period. The profit and weighted average number of
shares used in the calculations are set out below:
Weighted Basic
(Loss)/ average (loss)/
profit number earnings
# of shares per share
(pence)
6 months ended 31 January 2006 (424,024) 345,000,000 (0.12)
6 months ended 31 January 2005 149,555 290,000,000 0.052
Year ended 31 July 2005 (885,810) 301,000,000 (0.29)
----------- --------------- -----------
4 Debtors
The Debtors figure on the Consolidated Balance Sheet at 31 January 2006
includes an amount which has been reclassified as falling due after one year
of #576,440. As at 31 July 2005 this amount was previously classified as
being recoverable within one year.
5 Reconciliation of movements in shareholders' funds
6 months 6 months Year
ended ended ended
31 January 31 January 31 July
2006 2005 2005
(unaudited) (unaudited) (audited)
# # #
(Loss)/profit on ordinary
activities after taxation (424,024) 149,555 (885,810)
Dividend - (29,000) (49,700)
Share subscription - - 605,000
Share subscription costs - - (24,200)
----------- ----------- -----------
(Loss)/profit on ordinary
activities after taxation and
dividends (424,024) 120,555 (354,710)
Opening shareholders' funds 1,589,534 1,944,244 1,944,244
----------- ----------- -----------
Closing shareholders' funds 1,165,510 2,064,799 1,589,534
----------- ----------- -----------
6 Reconciliation of operating profit with net cash flow from operating
activities
6 months 6 months Year
ended ended ended
31 January 31 January 31 July
2006 2005 2005
(unaudited) (unaudited) (audited)
# # #
Operating (loss)/profit (379,267) 215,858 (777,745)
Depreciation 123,200 46,983 231,561
(Increase)/decrease in stocks and
work in progress (1,889) (10,689) 128,812
(Increase)/decrease in debtors (254,443) 153,654 649,419
(Decrease)/increase in creditors 437,888 (330,925) (626,376)
----------- ----------- -----------
Net cash (outflow)/inflow from
operating activities (74,511) 74,881 (394,329)
----------- ----------- -----------
7 Analysis of changes in net debt
As at
1 August Cash flow 31 January
2005 in period 2006
# # #
Cash at bank and in hand 400,049 (201,259) 198,790
Bank overdraft (106,423) 47,506 (58,917)
-----------
(153,753)
Bank loans (1,272,507) 9,231 (1,263,276)
Invoice discounting facilities (862,883) (42,994) (905,877)
Finance lease
And hire purchase contracts (11,067) 1,141 (9,926)
----------- ----------- -----------
(1,852,831) (186,375) (2,039,206)
----------- ----------- -----------
8 Interim Dividend
The directors do not recommend payment of an interim dividend.
9 Notification of Results
Copies of the Interim Results will be available for download from the
Company's website at www.meriden-group.co.uk from 1 May 2006 or by request
from the Company's registered office, Meriden House, 6 Great Cornbow,
Halesowen, West Midlands B63 3AB.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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