RNS Number:5239B
Metalrax Group PLC
24 September 2002
Pre-tax profits up 7.6% on turnover up 11.1%
Encouraging resumption of trading pattern
"Cautious optimism for rest of year"
Mr Eric Moore, chairman of Metalrax Group PLC, the engineering
specialists, reports pre-tax profits of #5.709m (#5.305m) on
turnover of #55.790m (#50.208m) for the half year to 30th June
2002.
Earnings per share are 3.24p (3.04p). The interim dividend is
unchanged at 1.65p per share.
Mr Moore reports "The most encouraging feature of our trading
performance...........was the resumption of the familiar
cyclical pattern to which we were accustomed......... prior to
the anomalies of last year".
In Engineering & Storage he points out "new products
introduced last year have been enhanced by the wider range of
ancillary items, which should assist in the penetration of
further new markets".
In Housewares "our design teams successfully introduced a
number of innovative products to meet the demands of customers
at home and abroad". He says that the full benefits of
accommodating the operations of the two companies acquired
last year will be reflected in future periods.
For the future of the group "orders on hand remain at
acceptable levels" and "we are approaching the remainder of
the year with cautious optimism".
Further information: Mr. Eric Moore, chairman - Telephone
0121 433 3444
Statement by the chairman
Results and dividend
The most encouraging feature of our trading performance in
the first half of this year was the resumption of the
familiar cyclical pattern to which we had become accustomed
prior to the anomalies experienced last year. In accordance
with the projections outlined at the annual general meeting,
turnover for the six months to 30th June 2002 was
increased by 11.1% to the record #55.790m from #50.208m,
with profit before taxation rising by 7.6% to #5.709m
compared with #5.305m for the corresponding period in the
previous year.
The directors are pleased to declare an unchanged interim
dividend of 1.65 pence per share which will be paid on 31st
October 2002 to shareholders on the register of members on
4th October 2002.
Review
During the period under review we successfully completed our
programme of board restructuring with the promotion of
Jeffrey Edwards and Garry Gresham to executive director
status, and the appointment of John Adcock as an independent
non-executive director.
Within these revised operational frameworks we have
retained the experience and versatility to ensure that
appropriate opportunities can be taken to streamline
management procedures and facilities. Best practice
standards in quality control, product development,
manufacturing techniques and customer service have continued
to be given strategic priority.
The group newsletter enclosed with this report illustrates
some interesting current developments relating to the
products and markets of our two operating divisions.
Engineering and storage products
A welcome improvement in the volume of business available to
this division enabled our management teams to make the best
possible use of the substantial production resources at
their disposal. Productivity improvements became even more
important when responding to customer demands for price
reductions and shorter delivery lead times in many
instances.
New products introduced last year have been enhanced by the
wider range of ancillary items which should assist in the
penetration of further new markets. The publication of a new
mail order catalogue for storage and workplace equipment has
added a new dimension to our marketing strategy, with
another award having been won for excellence of service in
the distributor arm of the business.
Housewares
Our logistical abilities have been fully tested in recent
months as we embarked on the initial phases of accommodating
the operations of the two companies acquired last year
within our existing divisional production and warehousing
complexes. Full benefits of this work will be reflected in
future periods when the integration programmes have been
completed.
Challenging conditions have persisted in all market sectors,
with monumental efforts being required to defend profit
margins. Our design teams successfully introduced a number
of innovative products to meet the demands of customers at
home and abroad, where overseas sales have been well
maintained despite the persistent relative strengthening of
sterling. Selling activity has remained buoyant with retail
outlets supplying our wide range of products for use in all
rooms of the house.
Prospects
World stock markets and financial institutions have
continued to experience volatile conditions, and in some
areas the uncertainties have affected consumer confidence.
Despite these causes for concern the main focus will remain
on maximising shareholder values whenever opportunities for
expansion are available, either through organic growth or
carefully selected acquisitions.
Trading has continued to run broadly in line with our
expectations, and considering the challenging conditions
which prevail in all markets, orders on hand remain at
acceptable levels.
Subject to the possible effects of any global upheaval or
economic downturn we are approaching the remainder of the
year with cautious optimism.
Eric Moore
24th September 2002
Consolidated profit and loss account
six months ended 30th June 2002
2002 2001 2001
Six months Six months Twelve months
ended ended ended
30th June 30th June 31st December
Unaudited Unaudited Audited
Notes #'000 #'000 #'000
Turnover 1 55,790 50,208 108,543
====== ====== =======
Operating profit 5,795 5,384 11,821
Goodwill amortisation 151 131 268
------ ------ -------
5,644 5,253 11,553
Interest receivable 108 165 234
------ ------ -------
5,752 5,418 11,787
Interest payable 43 113 177
------ ------ -------
Profit before taxation 5,709 5,305 11,610
Taxation 3 1,758 1,631 3,541
------ ------ -------
Profit after taxation 3,951 3,674 8,069
Minority interests -
equity interests 54 12 29
------ ------ -------
Profit for the period 3,897 3,662 8,040
====== ====== =======
Appropriated as follows:
Interim dividend
1.65p per share payable
31st October 2002
(2001: 1.65p per share) 5 1,984 1,984 6,495
Retained profit for
the period 1,913 1,678 1,545
------ ------ -------
3,897 3,662 8,040
====== ====== =======
Earnings per share
basic and diluted 6 3.24p 3.04p 6.68p
Consolidated balance sheet
30th June 2002
2002 2001 2001
30th June 30th June 31st December
Unaudited Unaudited Audited
#'000 #'000 #'000
Fixed assets
Intangible assets 5,246 4,734 5,397
Tangible assets 25,655 25,922 26,116
Investments 200 200 200
------ ------ -------
31,101 30,856 31,713
------ ------ -------
Current assets
Stocks 19,688 20,457 18,149
Debtors 23,733 22,910 22,648
Freehold property
for disposal 1,040 - 1,040
Cash at bank 5,326 3,879 9,310
------ ------ -------
49,787 47,246 51,147
Creditors
Amounts falling
due within one year 25,702 24,925 27,487
------ ------ -------
Net current assets 24,085 22,321 23,660
------ ------ -------
Total assets less
current liabilities 55,186 53,177 55,373
Creditors
Amounts falling due
after more than one year 259 15 2,333
------ ------ -------
54,927 53,162 53,040
Provision for liabilities
and charges
Deferred taxation 1,426 1,366 1,426
------ ------ -------
Net assets 53,501 51,796 51,614
====== ====== =======
Financed by:
Capital and reserves
Called up share capital 6,014 6,014 6,014
Share premium account 2,355 2,355 2,355
Capital redemption reserve 224 224 224
Profit and loss account 44,298 42,659 42,447
------ ------ -------
Shareholders' funds -
equity interests 52,891 51,252 51,040
Minority interests -
equity interests 610 544 574
------ ------ -------
53,501 51,796 51,614
====== ====== =======
Cash flow statement
six months ended 30th June 2002
2002 2001 2001
Six months Six months Twelve months
ended ended ended
30th June 30th June 31st December
Unaudited Unaudited Audited
#'000 #'000 #'000
Cash inflow from
operating activities 4,210 5,325 17,224
Net cash inflow from
returns on investments
and servicing of finance 65 52 57
Taxation paid (1,623) (1,553) (4,158)
Net cash outflow for capital
expenditure and
financial investment (1,199) (1,771) (3,610)
Net cash outflow
for acquisitions - (891) (562)
Equity dividends paid (4,510) (4,510) (6,495)
------ ------ -------
Cash outflow before
management of liquid
resources and financing (3,057) (3,348) 2,456
Net cash inflow from
management of
liquid resources 3,090 702 (1,809)
Net cash outflow for financing
Borrowings repaid (925) (177) (549)
------ ------ -------
Decrease in cash
in the period (892) (2,823) 98
====== ====== =======
Notes on the cash flow statement
six months ended 30th June 2002
2002 2001 2001
Six months Six months Twelve months
ended ended ended
30th June 30th June 31st December
Unaudited Unaudited Audited
#'000 #'000 #'000
1 Reconciliation of operating
profit to net cash flow from
operating activities
Operating profit 5,644 5,253 11,553
Depreciation, net of
disposal surpluses 1,690 1,648 3,267
Amortisation of goodwill 151 131 268
Increase in stocks (1,504) (1,577) (590)
Increase in debtors (1,149) (1,643) (681)
Decrease in creditors (622) 1,513 3,407
------ ------ -------
Net cash inflow from operating
activities 4,210 5,325 17,224
====== ====== =======
2 Reconciliation of net cash
flow to movement in net funds
Decrease in cash in the period (892) (2,823) 98
Cash outflow for decrease in debt 925 177 549
Cash inflow from decrease
in liquid resources (3,090) (702) 1,809
------ ------ -------
(3,057) (3,348) 2,456
Effect of foreign
exchange rate changes 59 (132) (66)
------ ------ -------
Movement in net funds
in the period (2,998) (3,480) 2,390
Net funds at 31st December 2001 7,264 4,874 4,874
------ ------ -------
Net funds at 30th June 2002 4,266 1,394 7,264
====== ====== =======
3 Analysis of net funds Foreign
At Cash exchange At
31.12.01 flow movement 30.6.02
#'000 #'000 #'000 #'000
Bank balances 4,577 (892) (2) 3,683
Short-term deposits 4,733 (3,090) - 1,643
------ -------
Cash at bank per
balance sheet 9,310 5,326
Debt (2,046) 925 61 (1,060)
------ ------ ------ -------
7,264 (3,057) 59 4,266
====== ====== ====== =======
Notes to the interim results
six months to 30th June 2002
1 Segmental analysis
Analysis by activity 2002 2001 2001
Six months Six months Twelve months
to 30th June to 30th June to 31st December
Unaudited Unaudited Audited
Operating Operating Operating
Turnover profit Turnover profit Turnover profit
#'000 #'000 #'000 #'000 #'000 #'000
Engineering and
storage products 28,859 3,441 28,246 3,408 55,281 6,930
Housewares 26,931 2,203 21,962 1,845 53,262 4,623
------ ------ ------ ------ ------- ------
55,790 5,644 50,208 5,253 108,543 11,553
====== ====== ====== ====== ====== =====
Geographical analysis
by origin Operating Operating Operating
Turnover profit Turnover profit Turnover profit
#'000 #'000 #'000 #'000 #'000 #'000
United Kingdom 51,466 5,232 46,356 5,053 99,618 11,209
North America 4,324 412 3,852 200 8,925 344
------ ------ ------ ------ ------- ------
55,790 5,644 50,208 5,253 108,543 11,553
====== ====== ====== ====== ====== =====
Geographical turnover
analysis by destination #'000 #'000 #'000
North America 5,581 4,283 10,869
Austria 742 790 1,554
Eire 356 429 741
Spain 328 341 605
Italy 327 200 428
Holland 283 267 592
France 270 410 1,068
Belgium 212 312 441
Sweden 207 229 508
Germany 205 750 1,432
Rest of Europe 496 443 1,079
Africa 56 26 99
Far East, Australia
and other 510 649 1,149
United Kingdom 46,217 41,079 87,978
------ ------ ------
55,790 50,208 108,543
====== ====== =======
2 Accounting policies
The unaudited interim results for the half year ended 30th
June 2002 have been prepared on the basis of the accounting
policies set out in the report and accounts for the year ended
31st December 2001. The financial information contained herein
does not constitute statutory accounts within the meaning of
section 240(5) of the Companies Act 1985.
The statutory accounts for the year ended 31st December 2001,
which have been delivered to the registrar of companies, carry
an unqualified report by the auditors, and do not contain a
statement under section 237(2) or (3) of the Companies Act
1985.
3 Taxation
The charge for taxation is based on the estimated effective
rate for the year as a whole.
4 Recognised gains and losses
There were no material recognised gains or losses in the
results other than the consolidated profit for the period.
5 Dividend
The directors recommend the payment of an interim dividend of
1.65p per ordinary share to shareholders registered on 4th
October 2002 to be paid on 31st October 2002.
6 Earnings per share
The earnings per ordinary share are calculated on the profit
for the period. The number of shares used in the calculation
of basic earnings per share is 120,270,740 being the shares in
issue during the period (2001: 120,270,740).
Diluted earnings per share, taking into account the number of
shares capable of being exercised under the various option
schemes, are the same as the disclosed basic earnings.
7 Announcement of results
These results were announced to the London Stock Exchange on
24th September 2002 and sent to shareholders on the same day.
Further copies are available from the Company Secretary,
Metalrax Group PLC, Ardath Road, Kings Norton, Birmingham B38
9PN.
Directors, bankers and professional advisers
Directors
Eric S. Moore, F.C.A.*
Chairman
Richard E. Arbuthnot, B.Sc., M.Sc.
Chief executive (from 1st July 2002)
Alan J. Mackenzie, A.C.M.A.
Harold J. Musgrove, Hon. DUniv., F.I.M.I.*
Terry R. Jones, A.C.I.S., A.C.M.A.
Reginald Fort, F.C.A.*
Jeffrey G. L. Edwards
Garry H. Gresham, B.A. (Hons)
John K. Adcock, F.C.I.B.*
(Appointed 1st July 2002)
* non-executive
Secretary
Terry R. Jones, A.C.I.S., A.C.M.A.
Registered Office
Ardath Road,
Kings Norton,
Birmingham B38 9PN
Telephone 0121-433 3444
Facsimile 0121-433 3325
E-mail: info@metalrax-group.co.uk
www.metalrax-group.co.uk
Registered in England 793639
Bankers
Barclays Bank PLC
15 Colmore Row,
Birmingham B3 2BY
National Westminster Bank PLC
21 Digbeth,
Birmingham B5 6BL
HSBC Bank plc
130 New Street,
Birmingham B2 4JU
Auditors
Moore Stephens
Chartered Accountants
Legge Street
Birmingham B4 7EU
Solicitors
Hammond Suddards Edge
148 Edmund Street,
Birmingham B3 2JR
Registrars
Computershare Services Plc
P.O. Box 82,
The Pavilions,
Bridgwater Road,
Bristol BS99 7NH
This information is provided by RNS
The company news service from the London Stock Exchange
END
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