TIDMMRX
RNS Number : 0641J
Metalrax Group PLC
24 March 2010
24 March 2010 Metalrax Group PLC
Preliminary results for the year ended 31 December 2009
Metalrax Group PLC ("Metalrax", the "Group"), the niche supplier of specialist
engineering and consumer durables products, today announces its preliminary
results for the year ended 31 December 2009.
Results
+---------------+------------+----------+------------+----------+
| | 2009 | 2009 | 2008 | 2008 |
+---------------+------------+----------+------------+----------+
| | Continuing | Total | Continuing | Total |
| | activities | Group+ | activities | Group+ |
| | GBP'm | GBP'm | GBP'm | GBPm |
+---------------+------------+----------+------------+----------+
| External | 61.2 | 62.9 | 72.3 | 104.8 |
| revenues | | | | |
+---------------+------------+----------+------------+----------+
| Gross | 23.8% | 22.3% | 24.9% | 21.6% |
| margins | | | | |
+---------------+------------+----------+------------+----------+
| Operating | (0.2) | (0.6) | 2.3 | 3.1 |
| (loss)/profit | | | | |
| before | | | | |
| exceptional | | | | |
| items*, | | | | |
| goodwill | | | | |
| impairment | | | | |
| and share | | | | |
| option costs | | | | |
+---------------+------------+----------+------------+----------+
| Loss | (2.7) | (10.6) | (1.0) | (14.5) |
| before | | | | |
| interest | | | | |
| and | | | | |
| taxation | | | | |
+---------------+------------+----------+------------+----------+
| Loss | | (11.5) | | (16.2) |
| for | | | | |
| the | | | | |
| year | | | | |
+---------------+------------+----------+------------+----------+
| Loss | ( | (9.62p) | (2.19p) | (13.55p) |
| per 5p | 2.96p) | | | |
| Ordinary | | | | |
| share | | | | |
+---------------+------------+----------+------------+----------+
| Adjusted | (0.90p) | (1.29p) | 0.53p | 1.10p |
| earnings | | | | |
| per 5p | | | | |
| Ordinary | | | | |
| share | | | | |
+---------------+------------+----------+------------+----------+
| Cash | 2.0 | 0.5 | 2.7 | 5.2 |
| generated | | | | |
| from | | | | |
| operations | | | | |
+---------------+------------+----------+------------+----------+
| Net | | 12.2 | | 12.5 |
| debt | | | | |
+---------------+------------+----------+------------+----------+
| Gearing | | 89.6% | | 40.1% |
+---------------+------------+----------+------------+----------+
| Dividends | | nil | | nil |
| paid per | | | | |
| 5p | | | | |
| Ordinary | | | | |
| share | | | | |
+---------------+------------+----------+------------+----------+
* Exceptional items (note 3) are items of income and expenditure that, in the
judgement of management, should be disclosed separately on the basis that they
are material, either by their nature or their size, to the understanding of the
financial statements and where not to do so would distort the comparability of
financial performance between periods.
+ The results of the total Group have been reported above to aid the comparison
of the results presented in 2008 Annual Report and Accounts. Within the
statutory accounts, the net results of discontinued operations are reported as a
single line item within the income statement.
Highlights:
· The full year operating loss before exceptional items, goodwill impairment,
share option costs and interest of GBP0.6m was in line with market expectations
and reflects a strong return to profit in the second half of GBP0.8m (compared
to a loss of GBP1.4m in the first half)
· Cash generation from continuing operations remains strong at GBP2.0m (2008:
GBP2.7m)
· Revenues down 15.3% to GBP61.2m (2008: GBP72.3m) from continuing activities
reflecting the economic downturn in most sectors in which we operate
· Gross margin reduced year on year by 1.1% to 23.8% (2008: 24.9%) from
continuing activities
· Continuing operations made a GBP0.2m operating loss before exceptional
items, goodwill impairment and share option costs (2008: profit GBP2.3m). The
Group has made a loss for the year of GBP11.5m (2008: 16.2m)
· The Group successfully refinanced in October 2009, with up to GBP23.7m of
banking facilities which provides a good base for the continued implementation
of our strategy
· Disposal or restructuring of four businesses was completed in line with
strategic review goals, leaving nine refocused businesses positioned for future
growth
Andrew Richardson, Group Chief Executive, said:
"2009 was a challenging year for many businesses. Metalrax was no exception. We
operate across a broad range of sectors, all of which were impacted by the first
wave of the global recession. However, we worked hard in 2009 to refocus the
Group and we exited the year a leaner, fitter business with a focused group of 9
businesses. We are well placed for future growth and we anticipate meeting
market expectations in 2010."
For further information:
+--------------------------------+--------------------------+
| Metalrax Group PLC | |
+--------------------------------+--------------------------+
| Andrew Richardson, Chief | 0845 030 3300 |
| Executive | |
+--------------------------------+--------------------------+
| | |
+--------------------------------+--------------------------+
| Arden Partners plc | |
+--------------------------------+--------------------------+
| Steve Douglas/Matthew Armitt | 0121 423 8900 |
+--------------------------------+--------------------------+
| | |
+--------------------------------+--------------------------+
Chairman's Statement
Significant advances
Firstly, I am delighted to be joining your Group as Chairman following my
appointment to the Board on 1 March 2010. 2009 has seen significant progress
being made within the Group which provides a momentum to the business that has
not been apparent for some time. The Group has demonstrated resolve and
flexibility during what can only be described as challenging times. As a result,
the business is shifting its focus away from survival to future shareholder
growth. Since my appointment to the Board, I have had the opportunity to see the
Group in action and it is exciting to be joining at a time when the business is
looking forward.
During the year, the Group has further reduced the number of operations from
thirteen to nine. The continued restructuring and the successful renegotiation
of the Group's banking facilities enables us to continue to pursue the drive for
growth that the Board originally outlined back in 2008. During the intervening
period our strategy has remained unaltered throughout - only our tactics and
timing have changed.
Results
Against the backdrop of difficult global and national economic climates, 2009
was, unsurprisingly, a difficult trading year across all of our operating units.
Revenues from continuing operations were GBP61.2m, 15.3% below prior year (2008:
GBP72.3m). The full year operating loss (before exceptional items, goodwill
impairment, share option costs and interest) of GBP0.6m was in line with market
expectations and reflects a strong return to profit in the second half of
GBP0.8m (compared to a loss of GBP1.4m in the first half). Whilst this
improvement reflects the seasonality experienced in three of the operating units
as well as the impact of aggressive but appropriate cost cutting, it also
reflects a strengthening in several of the core businesses. After exceptional
items, goodwill impairment and share option costs, the Group reports a loss
before interest and taxation of GBP10.6m (2008: GBP14.5m). Significant levels of
exceptional costs were incurred in 2009 totalling GBP10.0m (2008: GBP17.6m) of
which GBP8.4m (2008: GBP11.6m) was non-cash and GBP10.2m (2008: GBP6.4m) was
incurred in the first half. GBP7.5m of the total exceptional charge was
incurred in respect of discontinued businesses (2008: GBP14.3m). The basic loss
per share was 9.62p compared to a basic loss of 13.55p per share in 2008. The
Group's strong focus on cash continued with GBP0.5m (2008: GBP5.2m) of cash
being generated during the year despite the GBP11.5m (2008: GBP16.2m) loss after
tax.
Dividend
In light of the Group's performance in 2009, no dividend will be payable in
respect of the year ended 31 December 2009.
People
2009 saw a number of Board changes as the needs of the restructured Group
changed. John Adcock stepped down in July 2009 after seven years on the board
and more recently, after seven years as Chair, John Crabtree announced that he
will retire from the board on 31 March 2010. Following the completion of the
bank refinancing and as part of the drive to reduce central overheads, Michael
Stock left the Group and his role was jointly taken over by the Group Financial
Controller and Finance Director - Operations. The Board would like to express
its thanks to John Adcock, John Crabtree and Michael Stock for their
contributions to Metalrax. I joined the group as Chairman on 1 March 2010 at an
exciting time when the whole Group is facing forward and on a mission to grow.
The restructuring activity over the past two years has been very unsettling and
challenging for many employees and the Board would like thank all of the
employees for their ongoing commitment and support which is very much
appreciated.
Financing
In October 2009, the Group successfully refinanced its banking facilities with
its incumbent banks, HSBC and RBS, agreeing facilities of up to GBP23.7m for a
period of three years. Interest rates are in line with market norms with
covenants tests relating to consolidated EBITDA and consolidated net borrowings.
Warrants have been granted over 4.99% of the issued share capital at the time of
exercise, with an exercise price of 5 pence per share. This renewed facility
provides a good base to continue the implementation of our strategy.
Outlook
Managing a Group of nine operating entities is clearly a more straight forward
challenge than managing the disparate group of 23 trading units inherited by
management two years ago. Whilst the economic climate has not yet materially
improved in many of the sectors in which the Group operates, all of the
remaining businesses have clear strategic goals, are operationally fitter and
are all focused on profitable organic revenue growth and cash generation as the
Group's key 2010 imperatives. We are optimistic that we can meet the market's
expectations for this year's trading.
Chief Executive Officer's Operational and Financial Review
Overview
As we entered 2009, I knew it was going to be a challenging year: our key
markets were in recession, key customers were slashing production schedules with
some shutting down for months, the Group had uncommitted banking facilities and
like everyone, no visibility on when the economy would improve. Against this
backdrop, I am proud of what we have achieved; we have eliminated further
non-core businesses resulting in a lean and more stable group of nine, we have
agreed our banking facilities for three years and we have seen a positive trend
in recent months to show that our restructuring initiatives are paying off.
We have made good progress in achieving our ambition to ensure that our
businesses operate in niche markets with significant growth potential. During
2009, our focus was on stopping losses, exiting non-core businesses and
strengthening the strategic focus of the remaining businesses. We have focused
on cash, generating GBP2.0m from continuing businesses (2008: GBP2.7m) despite
recording a loss from continuing operations (post exceptional items, share
options costs and goodwill impairment) of GBP2.7m (2008: GBP1.0m). We have
reduced central costs by GBP1.2m, from GBP3.3m in 2008 to GBP2.1m in 2009. In
2010, every business and individual within the Group has two key objectives:
- Profitable revenue growth; and
- Cash generation with the objective of minimising borrowings.
We have de-risked our remaining nine businesses by reducing their reliance on
declining markets and refocusing them on growing sectors. A great example of
this is Weston Body Hardware which has reduced its exposure to the automotive
and construction sectors by winning contracts to supply the renewable energy
sector. Focusing on the future, we have group-wide initiatives to drive growth.
For example we are improving our sales pipeline and order book management
processes in what have historically been manufacturing-led companies. Group wide
innovation workshops are delivering exciting results.
The recession combined with the restructuring of the Group has impacted our
employees - we have made redundancies and have, at times, implemented short time
working across most businesses. I am very proud that all the employees at
Metalrax understood the need to support these actions and responded positively.
Our employees deserve recognition and our thanks for doing so. I have confidence
that every business in the Group is well positioned to take advantage of its
markets now and as those markets recover.
2009 Performance
The 2009 results are reported in line with the structure implemented in 2008
which comprises of two divisions: Consumer Durables and Specialist Engineering.
Specialist Engineering
This division now comprises seven businesses which delivered GBP39.2m of
revenues compared to GBP46.9m in 2008, a decrease of 16.4%, and an operating
profit (before exceptional, share option costs and goodwill impairment) of
GBP1.6m (2008: GBP4.1m).
The decline in revenues was experienced in all but one of the Specialist
Engineering businesses and felt most sharply in Toolspec and Weston Body
Hardware, both of which have exposure to the automotive and off-highway markets.
Toolspec, the supplier of high technology tube manipulation products reacted
swiftly when its key customers announced factory shut-downs for the beginning of
2009 and through aggressive cost management and appropriate headcount
reductions, the business delivered a profit for the full year. Weston Body
Hardware reacted to the downturn by seeking new markets and was successful in
winning contracts to supply components to wind turbine manufacturers. The
business has also retrained its entire workforce to take advantage of future
growth and won a number of prestigious awards.
The business that experienced growth in the period was PG Lifelink, the provider
of electrical power safety equipment which we acquired in 2008. PG Lifelink has
experienced success in de-risking its exposure to the North American markets by
increasing exports into the Far East. Ongoing geographic expansion plans
combined with the exciting new product developments give PG Lifelink a strong
footing for further growth in 2010.
The Group's largest business, Cooper Coated Coil which coats steel for consumer,
automotive, and printing markets had a challenging year with a decline in volume
reflecting situations where its end customers had lost contracts. We are
confident that this business will demonstrate growth in 2010 as it focuses on
international expansion and the launch of its new products. Following on from
the 2008 investment which gave Cooper Coated Coil the most efficient coil
coating line for bakeware in the world, we have now completed the consolidation
of this business onto one site which will give operational and management's
benefits in 2010.
We have integrated our cold rolled steel sections business, Sections and Tubes
into Metalrax Storage, its sister business and number one customer. Both
businesses experienced severe demand issues as their customers cut back on
capital expenditure in the difficult economy. Metalrax Storage continued its
drive into niche sectors including the launch of its museum storage web site
focusing on this niche market. The management team remains focused on growth but
the underlying market has yet to show signs of recovery.
Advanced Handling, which manufactures and supplies a range of bespoke handling
solutions, also had a difficult year as its customers' appetite to invest in
capital equipment remained low. During 2009, the business invested in
strengthening its direct sales force to drive its strategy of growing bespoke
sales into niche sectors. The business is now resourced to grow both bespoke and
service sales.
The smallest company in the group, Premier Architectural Metalwork had a tough
time in 2009 as the new management team endeavoured to turn the company around
in a very difficult construction market. The business, which makes and installs
steel and glass stairways and balustrades has cut its workforce and used short
time working when necessary to reflect the downturn in demand. It is now well
placed to take advantage of new opportunities.
Consumer Durables
This division now comprises two businesses following the 2008 consolidation of
RTA Wineracks and our China operations into GW International. Divisional
turnover declined by 13.8% to GBP21.9m (2008: GBP25.4m), a performance that
resulted in a profit of GBP0.3m (2008: GBP1.5m) before exceptional items, share
options costs and goodwill impairment.
GW International, the second largest Group business, manufactures and supplies
bakeware, kitchen tools and gadgets, wine racks and bathroom furniture into the
retail markets. The business had a very difficult year with some key account
losses (including businesses such as Woolworths), increased margin pressure from
retailers pushing low cost promotions and increased competition from low cost
overseas imports. On a positive note, our factory automation programme
continued, we delivered our first orders into North America to Michaels, the
leading speciality and hobby store, and we refocused the business on higher
margin products. Since the year end, we have changed the senior management team
and the business is re-energised and focused to deliver growth in 2010.
Samuel Groves spent the early part of 2009 bedding down in its new premises and
focusing on increasing customer service levels. The business which supplies both
the catering and retail markets had a disappointing year in terms of sales and
profit. Since the year end, the senior management has been changed and
management with proven turnaround skills have been appointed.
Discontinued businesses
2009 saw the Group reduce by a further four trading units; BSC and Commercial
Bearings were sold to trade buyers, Sections and Tubes was integrated with a
sister business and Hidrosib, the Romanian business, commenced insolvency
proceedings and was ultimately sold to management. The business disposals over
2008/2009 have left the Group with a number of properties which are no longer
used by the Group. The book value of these properties was GBP5.9m as at the end
of 2009 and we are actively seeking to sell these properties to reduce the
Group's debt.
Current trading and prospects
The current year budgets have been built on the basis that the economies in
which the Group operates will broadly be the same as in 2009; any economic
uplifts would be a bonus. For several of our businesses, Sterling's weakness
represents improved export opportunities and we will be aggressively looking to
grow in key overseas markets. I feel very confident that the lean, focused nine
trading entities remaining in the Group are all in a strong position to grow
this year, to exploit hitherto untapped market niches and to take advantage of
any economic recovery.
Financial Results summary
The Consolidated Income Statement reports the Revenue and Operating income and
expenditure of the Group's continuing businesses. The trading results of
businesses that have been sold are reported separately as discontinued
operations at the base of the Income Statement.
Revenues
Revenues for continuing activities for the year ended 31 December 2009 at
GBP61.2m were 15.3% below the prior year (2008: GBP72.3m). Total external
revenues for the Group were GBP62.9m (2008: GBP104.8m). Further details of the
divisional performances are set out above.
Operating Profit/loss
The operating loss for continuing businesses before exceptional items, goodwill
impairment, share option costs and interest at GBP0.2m (2008 profit: GBP2.3m)
was in line with the market expectations. Operating losses for continuing
businesses before net finance costs and taxation were GBP2.7m (2008 loss:
GBP1.0m).
Cash generation
The Group has continued to focus on working capital management and cost control
during the year. The cash out flow on discontinued activities represents the
cash cost of reorganisation and the experienced downturn in trade prior to
closure or disposal of these businesses. Total cash generated from operations
was GBP0.5m (2008: GBP5.2m). Of this, GBP2.0m was generated from continuing
operations (2008: GBP2.7m).
The Group has incurred significant one-off exceptional costs in 2009 totalling
GBP10.0m (2008: GBP17.6m). The vast majority of this total was incurred in
respect of discontinued businesses (GBP7.5m) as the Group continued to implement
its strategy to reposition its focus on businesses that operate in niche
markets, have significant growth potential and barriers to entry and that can be
expected to contribute meaningful cash and profits. Of the GBP10.0m of
exceptional items incurred in 2009, GBP8.4m related to non-cash items resulting
from the impairment of assets prior to business disposal, the impairment of
goodwill and the charge for the IFRS2 share option expense.
The exceptional items incurred can be broadly categorised into the following
types:
· Re-organisation costs incurred in restructuring various elements of the
group has resulted in a GBP1.0m charge to exceptional items (2008: GBP4.4m).
This mainly results from redundancy plans put in place at Metalrax Storage,
Toolspec, RTA Wineracks, MRX China and Head Office ;
· The exit of the Romanian business has resulted in impairment provisions
and loss making contracts totalling GBP6.4m (2008: GBP0.5m) reflecting the
realisation of fixed asset and working capital at less than book value.
· The closure and disposal of businesses has resulted in impairment
provisions totalling GBP1.0m reflecting the realisation of fixed asset and
working capital at less than book value (2008: GBP5.3m)
· Onerous lease costs of GBP0.2m (2008: GBP1.4m) relate to future vacant
property rentals payable following the exit of the Bacol Fine Blanking premises
in Bromsgrove; and
· The deterioration in the commercial property market in 2009 resulted in
the devaluation of our property portfolio. Of the GBP2.8m (2008: GBP4.6m)
reduction in market value, GBP2.3m (2008: GBP4.3m) has been taken directly to
the revaluation reserve and GBP0.5m (2008: GBP0.3m) charged to exceptional,
being the impairment below the original historic cost of two of our properties.
Each year, the Group reviews the carrying value of its goodwill and in 2009 this
has resulted in an impairment of GBP0.6m (2008: GBP5.5m), which relates to
Samuel Groves.
The IFRS 2 share option charge of GBP0.3m (2008: GBP0.2m) has been disclosed
separately on the face of the income statement as this is considered to be a
non-trading item.
Net finance costs
Finance costs incurred in the year comprise bank interest of GBP0.5m (2008:
GBP0.7m), amortisation of debt issue costs GBP0.2m (2008: GBPnil) and the
pension finance cost of GBP0.3m (2008: GBP0.2m).
Taxation
The Group is not expecting to pay any UK cash tax in respect of its 2009 trading
results. A further repayment of tax of GBP0.2m (2008: GBP1.2m) was refunded in
January 2010 in respect of 2007 losses carried back to prior tax periods.
The effective tax rate of the Group is 18.4% (2008: 23.5%) which is
significantly lower than the standard rate of 28.0% (2008: 28.5%). The major
reconciling items are due to the high level of expenses not deductible (mainly
goodwill impairment) and the losses not recognised in 2009.
Loss /earnings per share
The basic and diluted loss per share was 9.62p compared with 13.55p in the
previous year. There are no dilutive effects associated with share options
granted under either the executive share option plans or the employee Sharesave
scheme during the year since these options are currently out-of-the-money.
Dividend and dividend policy
The Group is committed to its dividend policy announced in its 2007 Report and
Accounts. This progressive and sustainable policy aims to pay, where
appropriate, 40% to 50% of net profit.
In line with this policy, the Board does not propose to pay a final dividend for
the year, and therefore there has been no dividend in 2009 (2008: nil). The
Board believes that this is appropriate given the status of the turnaround plan
and is consistent with its stated policy and with its current focus on cash
management.
Property, plant & Equipment
The directors have updated the valuation of commercial properties in 2009,
following the formal valuation exercise that was commissioned at the end of
2008. The review has resulted in a further devaluation of our properties of
GBP2.8m (2008: GBP4.6m) which has been reflected in the financial statements. Of
this GBP2.8m, GBP2.3m relates mainly to properties that were previously revalued
upwards in 2007 and this has been taken against the revaluation reserve. The
balance of GBP0.5m which is shown as an exceptional impairment relates to
property values falling below historic cost.
The Group has invested GBP1.0m (2008: GBP3.4m) in new capital, mainly relating
to the finishing line at Cooper Coated Coil (GBP0.3m), the automation of plant
at GW International (GBP0.2m) and new plant at Samuel Groves (GBP0.2m).
Goodwill & Intangibles
The annual review of goodwill resulted in a GBP0.6m (2008: GBP5.5m) impairment
during the year, relating to Samuel Groves (2008: Discontinued businesses). Of
the remaining goodwill at the end of the year of GBP7.0m, GBP1.7m relates to PGL
and GBP5.3m relates to the Consumer Durables Division.
Movement in Working capital
The Group maintained a clear focus on managing its working capital and achieved
an overall net reduction in the year of GBP1.5m (2008: GBP2.1m) in continuing
businesses.
Pensions
The pension deficit over the year has increased by GBP1.6m. The deficit at 31
December 2009 is GBP4.6m (2008: GBP3.0m). The pension fund concluded its
triennial scheme specific valuation as at 1 January 2008 and the Group has
agreed a deficit recovery plan and future contributions with the Trustees based
on this valuation.
Cash flow and Borrowings
Bank borrowings at 31 December 2009 were GBP14.4m (2008 GBP12.5m). Net debt at
31 December 2009 stood at GBP12.2m, compared with GBP12.5m for the previous
year. Net debt is after taking into account GBP2.2m of unamortised debt issues
costs (2008: GBPnil).
The Group successfully refinanced its banking facilities with HSBC and RBS on 9
October 2009 for a three year term. The Group has secured banking facilities
with HSBC and RBS, totalling up to GBP17.7m at 31 December 2009, and an
additional uncommitted Rolling Credit Facility of up to GBP4.5m. The Group
also has uncommitted ancillary facilities with HSBC of GBP1.0m. Total available
facilities at 31 December 2009 were up to GBP23.2m.
The Group's bank facilities contain certain financial covenant tests relating to
Consolidated EBITDA and Consolidated Net Borrowings. The Group reports on these
covenants to the providers quarterly as part of the facility agreements. As at
the year end, the terms of the facilities, including covenants, were all met.
There is a risk that a further downturn in economic conditions may result in a
breach of the banking covenants. In setting the financial covenants, the
directors have negotiated appropriate levels of EBITDA and cashflow headroom to
allow a degree of flexibility were such a downturn to arise. The directors have
reviewed the Group's borrowing requirements for the next twelve months and the
financial covenant tests as set out in the banking facilities, and can confirm
that the preparation of the Group Accounts on a going concern basis remains
appropriate.
Cautionary note
This review of business operations has been prepared solely to provide
additional information to shareholders to allow them to assess the Company's
strategies and the potential for those strategies to succeed. It should not be
relied on by any other party or for any other purpose.
It contains certain forward-looking statements, made by the directors in good
faith based on the information available to them up to the time of their
approval of this report. Such statements should be treated with caution due to
the inherent uncertainties, including both economic and business risk factors,
underlying any such forward-looking information.
Financial Statements for the year ended 31 December 2009
Consolidated income statement
+------------------+--------+--------+--------+---------+----------+
| | Note | | | 2009 | 2008 |
| | | | | GBPm | GBPm |
+------------------+--------+--------+--------+---------+----------+
| | | | | | |
+------------------+--------+--------+--------+---------+----------+
| Turnover: | | | | | |
| continuing | | | | | |
| operations | | | | | |
+------------------+--------+--------+--------+---------+----------+
| Revenue | 2 | | | 61.2 | 72.3 |
+------------------+--------+--------+--------+---------+----------+
| Cost | | | | (46.6) | (54.3) |
| of | | | | | |
| sales | | | | | |
+------------------+--------+--------+--------+---------+----------+
| | | | | | |
+------------------+--------+--------+--------+---------+----------+
| Gross | | | | 14.6 | 18.0 |
| profit | | | | | |
+------------------+--------+--------+--------+---------+----------+
| | | | | | |
+------------------+--------+--------+--------+---------+----------+
| Distribution | | | | (5.8) | (6.0) |
| costs | | | | | |
+------------------+--------+--------+--------+---------+----------+
| Administrative | | | | (11.5) | (13.0) |
| expenses | | | | | |
+------------------+--------+--------+--------+---------+----------+
| | | | | | |
+------------------+--------+--------+--------+---------+----------+
| Operating | | | | (0.2) | 2.3 |
| (loss)/profit | | | | | |
| before | | | | | |
| exceptional | | | | | |
| items, share | | | | | |
| option costs | | | | | |
| and Goodwill | | | | | |
| impairment | | | | | |
+------------------+--------+--------+--------+---------+----------+
| | | | | | |
+------------------+--------+--------+--------+---------+----------+
| Exceptional | 3 | | | (1.6) | (2.3) |
| items* | | | | | |
+------------------+--------+--------+--------+---------+----------+
| Share | 3 | | | (0.3) | (0.2) |
| option | | | | | |
| costs | | | | | |
+------------------+--------+--------+--------+---------+----------+
| Goodwill | 3 | | | (0.6) | (0.8) |
| impairment | | | | | |
+------------------+--------+--------+--------+---------+----------+
| | | | | | |
+------------------+--------+--------+--------+---------+----------+
| Operating | | | | (2.7) | (1.0) |
| loss | | | | | |
+------------------+--------+--------+--------+---------+----------+
| Finance | | | | - | 0.1 |
| income | | | | | |
+------------------+--------+--------+--------+---------+----------+
| Finance | | | | (1.0) | (0.9) |
| expense | | | | | |
+------------------+--------+--------+--------+---------+----------+
| | | | | | |
+------------------+--------+--------+--------+---------+----------+
| Loss | | | | (3.7) | (1.8) |
| before | | | | | |
| income | | | | | |
| tax | | | | | |
+------------------+--------+--------+--------+---------+----------+
| | | | | | |
+------------------+--------+--------+--------+---------+----------+
| Income | 5 | | | 0.1 | (0.9) |
| tax | | | | | |
| credit/(expense) | | | | | |
+------------------+--------+--------+--------+---------+----------+
| | | | | | |
+------------------+--------+--------+--------+---------+----------+
| Loss | | | | (3.6) | (2.7) |
| for | | | | | |
| the | | | | | |
| year | | | | | |
| from | | | | | |
| continuing | | | | | |
| operations | | | | | |
+------------------+--------+--------+--------+---------+----------+
| | | | | | |
+------------------+--------+--------+--------+---------+----------+
| Discontinued | | | | (7.9) | (13.5) |
| operations | | | | | |
+------------------+--------+--------+--------+---------+----------+
| | | | | | |
+------------------+--------+--------+--------+---------+----------+
| Loss | | | | (11.5) | (16.2) |
| for | | | | | |
| the | | | | | |
| year | | | | | |
+------------------+--------+--------+--------+---------+----------+
| | | | | | |
+------------------+--------+--------+--------+---------+----------+
| Loss | | | | (11.5) | (16.2) |
| for | | | | | |
| the | | | | | |
| year | | | | | |
| attributable | | | | | |
| to equity | | | | | |
| holders of | | | | | |
| the parent | | | | | |
+------------------+--------+--------+--------+---------+----------+
| | | | | | |
+------------------+--------+--------+--------+---------+----------+
| Loss | | | | | |
| per | | | | | |
| ordinary | | | | | |
| share - | | | | | |
| Continuing | | | | | |
+------------------+--------+--------+--------+---------+----------+
| Basic | 6 | | | (2.96)p | (2.19)p |
| and | | | | | |
| diluted | | | | | |
| loss | | | | | |
| per | | | | | |
| share | | | | | |
+------------------+--------+--------+--------+---------+----------+
| | | | | | |
+------------------+--------+--------+--------+---------+----------+
| Loss | | | | | |
| per | | | | | |
| ordinary | | | | | |
| share - | | | | | |
| Discontinued | | | | | |
+------------------+--------+--------+--------+---------+----------+
| Basic | | | | (6.66)p | (11.28p) |
| and | | | | | |
| diluted | | | | | |
| loss | | | | | |
| per | | | | | |
| share | | | | | |
+------------------+--------+--------+--------+---------+----------+
| | | | | | |
+------------------+--------+--------+--------+---------+----------+
| Loss | | | | | |
| per | | | | | |
| ordinary | | | | | |
| share - | | | | | |
| Continuing | | | | | |
| & | | | | | |
| Discontinued | | | | | |
+------------------+--------+--------+--------+---------+----------+
| Basic | 6 | | | (9.62)p | (13.55p) |
| and | | | | | |
| diluted | | | | | |
| loss | | | | | |
| per | | | | | |
| share | | | | | |
+------------------+--------+--------+--------+---------+----------+
| | | | | | |
+------------------+--------+--------+--------+---------+----------+
| Dividends | | | | | |
| in | | | | | |
| respect | | | | | |
| of the | | | | | |
| year | | | | | |
+------------------+--------+--------+--------+---------+----------+
| Paid | 7 | | | - | - |
| (GBPm) | | | | | |
+------------------+--------+--------+--------+---------+----------+
| Paid | 7 | | | - | - |
| per | | | | | |
| share | | | | | |
+------------------+--------+--------+--------+---------+----------+
| | | | | | |
+------------------+--------+--------+--------+---------+----------+
* Exceptional items (note 3) are items of income and expenditure that, in the
judgement of management, should be disclosed separately on the basis that they
are material, either by their nature or their size, to the understanding of the
financial statements and where not to do so would distort the comparability of
financial performance between periods. In 2009, the GBP1.6 million (2008:
GBP2.3million) charge comprises further restructuring costs and asset
impairments as the strategy set out previously has continued to be implemented.
For further details see note 3.
Consolidated balance sheet
+----------------------------+--------+--------+--------+---------+----------+
| | | | | 2009 | 2008 |
| | | | | GBPm | GBPm |
+----------------------------+--------+--------+--------+---------+----------+
| | | | | | |
+----------------------------+--------+--------+--------+---------+----------+
| Assets | | | | | |
+----------------------------+--------+--------+--------+---------+----------+
| Goodwill | | | | 7.0 | 7.6 |
+----------------------------+--------+--------+--------+---------+----------+
| Other intangible assets | | | | 0.6 | 0.6 |
+----------------------------+--------+--------+--------+---------+----------+
| Property, plant and | | | | 20.7 | 33.8 |
| equipment | | | | | |
+----------------------------+--------+--------+--------+---------+----------+
| Deferred tax asset | | | | - | 1.4 |
+----------------------------+--------+--------+--------+---------+----------+
| | | | | | |
+----------------------------+--------+--------+--------+---------+----------+
| Total non-current assets | | | | 28.3 | 43.4 |
+----------------------------+--------+--------+--------+---------+----------+
| | | | | | |
+----------------------------+--------+--------+--------+---------+----------+
| Inventories | | | | 7.2 | 11.1 |
+----------------------------+--------+--------+--------+---------+----------+
| Trade and other | | | | 12.8 | 18.5 |
| receivables | | | | | |
+----------------------------+--------+--------+--------+---------+----------+
| Current tax asset | | | | 0.2 | - |
+----------------------------+--------+--------+--------+---------+----------+
| Assets held for sale | | | | - | 0.8 |
+----------------------------+--------+--------+--------+---------+----------+
| Cash at bank and in hand | | | | 2.5 | - |
+----------------------------+--------+--------+--------+---------+----------+
| | | | | | |
+----------------------------+--------+--------+--------+---------+----------+
| Total current assets | | | | 22.7 | 30.4 |
+----------------------------+--------+--------+--------+---------+----------+
| | | | | | |
+----------------------------+--------+--------+--------+---------+----------+
| Total assets | | | | 51.0 | 73.8 |
+----------------------------+--------+--------+--------+---------+----------+
| | | | | | |
+----------------------------+--------+--------+--------+---------+----------+
| Liabilities | | | | | |
+----------------------------+--------+--------+--------+---------+----------+
| Trade and other payables | | | | 13.9 | 22.6 |
+----------------------------+--------+--------+--------+---------+----------+
| Provisions | | | | 0.2 | 0.7 |
+----------------------------+--------+--------+--------+---------+----------+
| Current tax payable | | | | - | 0.3 |
+----------------------------+--------+--------+--------+---------+----------+
| Bank overdrafts and loans | | | | 4.7 | 12.5 |
+----------------------------+--------+--------+--------+---------+----------+
| | | | | | |
+----------------------------+--------+--------+--------+---------+----------+
| Total current liabilities | | | | 18.8 | 36.1 |
+----------------------------+--------+--------+--------+---------+----------+
| | | | | | |
+----------------------------+--------+--------+--------+---------+----------+
| Bank loans | | | | 10.0 | - |
+----------------------------+--------+--------+--------+---------+----------+
| Provisions | | | | 1.1 | 1.2 |
+----------------------------+--------+--------+--------+---------+----------+
| Employee benefits | | | | 4.6 | 3.0 |
+----------------------------+--------+--------+--------+---------+----------+
| Deferred tax liabilities | | | | - | 2.3 |
+----------------------------+--------+--------+--------+---------+----------+
| | | | | | |
+----------------------------+--------+--------+--------+---------+----------+
| Total non-current | | | | 15.7 | 6.5 |
| liabilities | | | | | |
+----------------------------+--------+--------+--------+---------+----------+
| | | | | | |
+----------------------------+--------+--------+--------+---------+----------+
| Total liabilities | | | | 34.5 | 42.6 |
+----------------------------+--------+--------+--------+---------+----------+
| | | | | | |
+----------------------------+--------+--------+--------+---------+----------+
| Net assets | | | | 16.5 | 31.2 |
+----------------------------+--------+--------+--------+---------+----------+
| | | | | | |
+----------------------------+--------+--------+--------+---------+----------+
| Equity | | | | | |
+----------------------------+--------+--------+--------+---------+----------+
| Share capital (ordinary | | | | 6.0 | 6.0 |
| shares) | | | | | |
+----------------------------+--------+--------+--------+---------+----------+
| Share premium | | | | 2.7 | 2.7 |
+----------------------------+--------+--------+--------+---------+----------+
| Capital redemption reserve | | | | 0.3 | 0.3 |
+----------------------------+--------+--------+--------+---------+----------+
| Revaluation reserve | | | | 4.2 | 6.3 |
+----------------------------+--------+--------+--------+---------+----------+
| Other reserve | | | | 0.6 | 0.2 |
+----------------------------+--------+--------+--------+---------+----------+
| Retained earnings | | | | 2.7 | 15.7 |
+----------------------------+--------+--------+--------+---------+----------+
| | | | | | |
+----------------------------+--------+--------+--------+---------+----------+
| Total equity | | | | 16.5 | 31.2 |
+----------------------------+--------+--------+--------+---------+----------+
| | | | | | |
+----------------------------+--------+--------+--------+---------+----------+
Consolidated Cash flow Statement
+---------------------+--------+---------+---------+
| | | |
+---------------------+--------+-------------------+
| | | 2009 | 2008 |
| | | GBPm | GBPm |
+---------------------+--------+---------+---------+
| | | | |
+---------------------+--------+---------+---------+
| Operating | | (10.6) | (14.5) |
| loss | | | |
+---------------------+--------+---------+---------+
| Depreciation | | 1.8 | 2.5 |
| | | | |
+---------------------+--------+---------+---------+
| Impairment | | 8.9 | 10.7 |
| losses | | | |
+---------------------+--------+---------+---------+
| Share-based | | 0.3 | 0.2 |
| payment | | | |
| expense | | | |
+---------------------+--------+---------+---------+
| Exchange | | 0.6 | (0.7) |
| losses | | | |
+---------------------+--------+---------+---------+
| Amortisation | | - | - |
| of | | | |
| intangibles | | | |
+---------------------+--------+---------+---------+
| Decrease | | 3.6 | 1.9 |
| in | | | |
| inventories | | | |
+---------------------+--------+---------+---------+
| Decrease | | 5.2 | 4.6 |
| in trade | | | |
| and | | | |
| other | | | |
| receivables | | | |
+---------------------+--------+---------+---------+
| (Decrease)/increase | | (8.7) | (0.4) |
| in payables | | | |
+---------------------+--------+---------+---------+
| (Decrease)/increase | | (0.5) | 1.3 |
| in provisions | | | |
+---------------------+--------+---------+---------+
| Other | | (0.1) | (0.4) |
| non-cash | | | |
| movements | | | |
+---------------------+--------+---------+---------+
| | | | |
+---------------------+--------+---------+---------+
| Cash | | 0.5 | 5.2 |
| generated | | | |
| from | | | |
| operations | | | |
+---------------------+--------+---------+---------+
| Interest | | - | 0.1 |
| received | | | |
+---------------------+--------+---------+---------+
| Interest | | (0.5) | (1.0) |
| paid | | | |
+---------------------+--------+---------+---------+
| Income | | (0.5) | 1.2 |
| Tax | | | |
| (paid)/received | | | |
+---------------------+--------+---------+---------+
| | | | |
+---------------------+--------+---------+---------+
| Net | | (0.5) | 5.5 |
| cash | | | |
| generated | | | |
| from | | | |
| operating | | | |
| activities | | | |
+---------------------+--------+---------+---------+
| | | | |
+---------------------+--------+---------+---------+
| Investing | | | |
| activities | | | |
+---------------------+--------+---------+---------+
| Purchase | | (1.0) | (3.4) |
| of | | | |
| property, | | | |
| plant and | | | |
| equipment | | | |
+---------------------+--------+---------+---------+
| Proceeds | | 1.6 | 0.4 |
| from | | | |
| sales of | | | |
| property, | | | |
| plant and | | | |
| equipment | | | |
+---------------------+--------+---------+---------+
| Acquisitions | | - | (3.6) |
| of | | | |
| businesses, | | | |
| net of cash | | | |
| acquired | | | |
+---------------------+--------+---------+---------+
| Sales | | 0.2 | 0.6 |
| of | | | |
| businesses | | | |
+---------------------+--------+---------+---------+
| | | | |
+---------------------+--------+---------+---------+
| Net | | 0.8 | (6.0) |
| cash | | | |
| generated | | | |
| from/(used | | | |
| in) | | | |
| investing | | | |
| activities | | | |
+---------------------+--------+---------+---------+
| | | | |
+---------------------+--------+---------+---------+
| Financing | | | |
| activities | | | |
+---------------------+--------+---------+---------+
| Equity | | - | - |
| dividends | | | |
| paid | | | |
+---------------------+--------+---------+---------+
| Repayment | | (11.4) | (5.0) |
| of | | | |
| borrowings | | | |
+---------------------+--------+---------+---------+
| New | | 19.1 | 3.0 |
| bank | | | |
| loans | | | |
| raised | | | |
+---------------------+--------+---------+---------+
| Debt | | (2.2) | - |
| issue | | | |
| costs | | | |
+---------------------+--------+---------+---------+
| (Decrease)/increase | | (3.3) | 2.5 |
| in bank overdraft | | | |
+---------------------+--------+---------+---------+
| | | | |
+---------------------+--------+---------+---------+
| Net | | 2.2 | 0.5 |
| cash | | | |
| from | | | |
| financing | | | |
| activities | | | |
+---------------------+--------+---------+---------+
| | | | |
+---------------------+--------+---------+---------+
| Net | | 2.5 | - |
| increase | | | |
| in cash | | | |
| and cash | | | |
| equivalents | | | |
+---------------------+--------+---------+---------+
| Cash | | - | - |
| and | | | |
| cash | | | |
| equivalents | | | |
| at | | | |
| beginning | | | |
| of year | | | |
+---------------------+--------+---------+---------+
| | | | |
+---------------------+--------+---------+---------+
| Cash | | 2.5 | - |
| and | | | |
| cash | | | |
| equivalents | | | |
| at end of | | | |
| year | | | |
+---------------------+--------+---------+---------+
| | | | |
+---------------------+--------+---------+---------+
Consolidated statement of comprehensive income
+----------------------------------------+-+--------+----------+----------+---------+
| | 2009 | 2009 | 2008 | 2008 |
| | GBP'm | GBP'm | GBP'm | GBP'm |
+----------------------------------------+----------+----------+----------+---------+
| Loss for the period | | (11.5) | | (16.2) |
+----------------------------------------+----------+----------+----------+---------+
| Loss on property devaluation | (2.6) | | (4.0) | |
| Actuarial (loss)/gain on defined | (1.4) | | 0.3 | |
| benefit pension scheme | (0.4) | | 0.4 | |
| Exchange differences | | | | |
+----------------------------------------+----------+----------+----------+---------+
| Tax relating to components of other | 0.8 | | (0.1) | |
| comprehensive income | | | | |
+------------------------------------------+--------+----------+----------+---------+
| Other comprehensive income for the | | (3.6) | | (3.4) |
| period | | | | |
+----------------------------------------+----------+----------+----------+---------+
| Total comprehensive income for the | | (15.1) | | (19.6) |
| period | | | | |
+----------------------------------------+----------+----------+----------+---------+
| Attributable to equity shareholders of | | (15.1) | | (19.6) |
| the parent | | | | |
+----------------------------------------+----------+----------+----------+---------+
| | | | | | |
+----------------------------------------+-+--------+----------+----------+---------+
Consolidated statement of changes in equity
Year ended 31 December 2009
+----------------+--------+--+---------+--------+----+-+--------+---+--------+-+--------+-+--------+--------+
| | | | | |
+----------------+--------+------------+--------+-----------------------------------------------------------+
| | | Share | | | Capital | | | |
| | Share | Premium | Revaluation | Other | Redemption | Retained | | |
| | Capital | Account | Reserve | Reserve | reserve | Earnings | Total | |
| | GBP'm | GBP'm | GBP'm | GBP'm | GBP'm | GBP'm | GBP'm | |
+----------------+-----------+---------+-------------+----------+------------+----------+----------+--------+
| | | | | | | | |
+----------------+-----------+---------+---------------+------------+----------+----------+-----------------+
| Loss for | - | - | - | - | - | (11.5) | (11.5) |
| the period | | | | | | | |
+----------------+-----------+---------+---------------+------------+----------+----------+-----------------+
| Losses on | | | | | | | |
| property | - | - | (2.6) | - | - | - | (2.6) |
| revaluation | | | | | | | |
+----------------+-----------+---------+---------------+------------+----------+----------+-----------------+
| Exchange | - | - | - | - | - | (0.4) | (0.4) |
| differences | | | | | | | |
+----------------+-----------+---------+---------------+------------+----------+----------+-----------------+
| Actuarial | | | | | | | |
| loss on | | | | | | | |
| defined | - | - | - | - | - | (1.4) | (1.4) |
| benefit | | | | | | | |
| pension | | | | | | | |
| schemes | | | | | | | |
+----------------+-----------+---------+---------------+------------+----------+----------+-----------------+
| Tax | | | | | | | |
| relating | | | | | | | |
| to | | | | | | | |
| components | - | - | 0.3 | - | - | 0.5 | 0.8 |
| of other | | | | | | | |
| comprehensive | | | | | | | |
| income | | | | | | | |
+----------------+-----------+---------+---------------+------------+----------+----------+-----------------+
| | | | | | | | |
| Total | | | | | | | |
| comprehensive | - | - | (2.3) | - | - | (12.8) | (15.1) |
| income for | | | | | | | |
| the period | | | | | | | |
+----------------+-----------+---------+---------------+------------+----------+----------+-----------------+
| Transfer | - | - | 0.2 | - | - | (0.2) | - |
| between | | | | | | | |
| reserves | | | | | | | |
+----------------+-----------+---------+---------------+------------+----------+----------+-----------------+
| Credit to | | | | | | | |
| equity for | | | | | | | |
| equity-settled | - | - | - | 0.4 | - | - | 0.4 |
| share option | | | | | | | |
| costs | | | | | | | |
+----------------+-----------+---------+---------------+------------+----------+----------+-----------------+
| Balance at | | | | | | | |
| 1 January | 6.0 | 2.7 | 6.3 | 0.2 | 0.3 | 15.7 | 31.2 |
| 2009 | | | | | | | |
| | | | | | | | |
+----------------+-----------+---------+---------------+------------+----------+----------+-----------------+
| Balance at | | | | | | | |
| 31 | 6.0 | 2.7 | 4.2 | 0.6 | 0.3 | 2.7 | 16.5 |
| December | | | | | | | |
| 2009 | | | | | | | |
+----------------+-----------+---------+---------------+------------+----------+----------+-----------------+
| | | | | | | | |
+----------------+-----------+---------+---------------+------------+----------+----------+-----------------+
| | | | | | | | | | | | | | | |
+----------------+--------+--+---------+--------+----+-+--------+---+--------+-+--------+-+--------+--------+
Consolidated statement of changes in equity (continued)
Year ended 31 December 2008
+----------------+---------+---------+-------------+---------+------------+----------+--------+
| | | Share | | | Capital | | |
| | Share | Premium | Revaluation | Other | Redemption | Retained | |
| | Capital | Account | Reserve | Reserve | reserve | Earnings | Total |
| | GBP'm | GBP'm | GBP'm | GBP'm | GBP'm | GBP'm | GBP'm |
+----------------+---------+---------+-------------+---------+------------+----------+--------+
| | | | | | | | |
+----------------+---------+---------+-------------+---------+------------+----------+--------+
| Loss | - | - | - | - | - | (16.2) | (16.2) |
| for | | | | | | | |
| the | | | | | | | |
| period | | | | | | | |
+----------------+---------+---------+-------------+---------+------------+----------+--------+
| Losses | | | | | | | |
| on | - | - | (4.6) | - | - | - | (4.6) |
| property | | | | | | | |
| revaluation | | | | | | | |
+----------------+---------+---------+-------------+---------+------------+----------+--------+
| Exchange | - | - | - | - | - | 0.4 | 0.4 |
| differences | | | | | | | |
+----------------+---------+---------+-------------+---------+------------+----------+--------+
| Actuarial | | | | | | | |
| loss on | | | | | | | |
| defined | - | - | - | - | - | 0.3 | 0.3 |
| benefit | | | | | | | |
| pension | | | | | | | |
| schemes | | | | | | | |
+----------------+---------+---------+-------------+---------+------------+----------+--------+
| Tax | | | | | | | |
| relating | | | | | | | |
| to | | | | | | | |
| components | - | - | 0.6 | - | - | (0.1) | 0.5 |
| of other | | | | | | | |
| comprehensive | | | | | | | |
| income | | | | | | | |
+----------------+---------+---------+-------------+---------+------------+----------+--------+
| Total | | | | | | | |
| comprehensive | | | | | | | |
| income for | - | - | (4.0) | - | - | (15.6) | (19.6) |
| the period | | | | | | | |
+----------------+---------+---------+-------------+---------+------------+----------+--------+
| Credit | | | | | | | |
| to | | | | | | | |
| equity | - | - | - | 0.2 | - | - | 0.2 |
| for | | | | | | | |
| equity-settled | | | | | | | |
| share option | | | | | | | |
| costs | | | | | | | |
+----------------+---------+---------+-------------+---------+------------+----------+--------+
| | | | | | | | |
| Balance | 6.0 | 2.7 | 10.3 | - | 0.3 | 31.3 | 50.6 |
| at 1 | | | | | | | |
| January | | | | | | | |
| 2008 | | | | | | | |
| | | | | | | | |
+----------------+---------+---------+-------------+---------+------------+----------+--------+
| Balance | | | | | | | |
| at 31 | 6.0 | 2.7 | 6.3 | 0.2 | 0.3 | 15.7 | 31.2 |
| December | | | | | | | |
| 2008 | | | | | | | |
+----------------+---------+---------+-------------+---------+------------+----------+--------+
Notes
1 Basis of preparation
Metalrax Group PLC (the "Company") is a Company incorporated in the United
Kingdom under the Companies Act 2006. This preliminary announcement is an
extract from the consolidated financial statements of the Company for the year
ended 31 December 2009 and comprise the Company and its subsidiaries (together
referred to as the "Group"). The consolidated financial statements were
authorised for issuance on 24 March 2010. The Group financial statements have
been prepared and approved by the Directors in accordance with International
Financial Reporting Standards and interpretations adopted for use by the EU
("IFRS").
The financial statements have been prepared on the historical cost basis except
that freehold and long leasehold properties, derivative financial instruments
and assets classified as held for sale are held at fair value. The preparation
of financial statements in conformity with IFRSs requires management to make
judgements, estimates and assumptions that affect the application of policies
and reported amounts of assets and liabilities, income and expenses. The
estimates and associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the judgements
about carrying values of assets and liabilities that are not readily apparent
from other sources.
The financial information set out below does not constitute the Company's
statutory accounts for the years ended 31 December 2008 or 2009, but is derived
from those accounts. Statutory accounts for 2008 have been delivered to the
Registrar of Companies and those for 2009 will be delivered following the
company's annual general meeting. The auditors' report on the statutory
accounts for the year ended 31 December 2008 were unqualified and contained an
emphasis of matter paragraph in respect of the going concern and the ongoing
refinancing and did not contain a statement under Sections 237 (2) or (3) of the
Companies Act 1985. The auditors' report on the statutory accounts for the year
ended 31 December 2009 were unqualified and do not contain statements under
s498(2) or (3) Companies Act 2006.
While the financial information included in this preliminary announcement has
been prepared in accordance with the recognition and measurement criteria of
International Financial Reporting Standards (IFRSs), this announcement does not
itself contain sufficient information to comply with IFRSs. The Company will
publish its full financial statements for the year ended 31 December 2009 by 30
April 2010, which will be available on the Company's website at
www.metalraxgroup.co.uk and at the Company's registered office at Ardath Road,
Kings Norton, Birmingham, B38 9PN. The Annual General Meeting will be held on
Tuesday 25 May 2010.
The Group's principal accounting policies as set out in the Annual Report have
been applied consistently.
Changes in accounting policy
In the current financial year, the Group has adopted International Financial
Reporting Standard 8 "Operating Segments" and International Accounting Standard
1 "Presentation of Financial Statements" (revised 2007).
IFRS 8 requires operating segments to be identified on the basis of internal
reports about components of the Group that are regularly reviewed by the Chief
Executive to allocate resources to the segments and to assess their performance.
In contrast, the predecessor Standard (IAS 14 "Segment Reporting") required the
Group to identify two sets of segments (business and geographical), using a
risks and rewards approach, with the Group's system of internal financial
reporting to key management personnel serving only as the starting point for the
identification of such segments. As a result, the segmental information which is
included in note 2 below is presented in accordance with IFRS 8.
IAS 1(revised) requires the presentation of a statement of changes in equity as
a primary statement, separate from the income statement and statement of
comprehensive income. As a result, a condensed consolidated statement of changes
in equity has been included in the primary statements, showing changes in each
component of equity for each period presented.
2 Segmental reporting
a) Segmental analysis by activity
Year ended 31 December 2009
+-------------+-------------+----------+-------------+---------+--------------+---------+
| | Continuing businesses | |
+-------------+------------------------------------------------+------------------------+
| | Specialist | Consumer | Unallocated | Total | Discontinued | |
| | Engineering | Durables | central | | businesses | Total |
| | 2009 | 2009 | costs 2009 | | 2009 | Group |
| | | | | Group | | 2009 |
| | | | | 2009 | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| Total | 43.3 | 22.0 | 0.2 | 65.5 | 2.1 | 67.6 |
| revenues | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| Inter-group | (4.1) | (0.1) | (0.1) | (4.3) | (0.4) | (4.7) |
| revenues | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| Revenue | 39.2 | 21.9 | 0.1 | 61.2 | 1.7 | 62.9 |
| from | | | | | | |
| external | | | | | | |
| customers | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| Operating | 1.6 | 0.3 | (2.1) | (0.2) | (0.4) | (0.6) |
| profit | | | | | | |
| before | | | | | | |
| exceptional | | | | | | |
| items, | | | | | | |
| share | | | | | | |
| options | | | | | | |
| costs and | | | | | | |
| goodwill | | | | | | |
| impairment | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| Exceptional | (0.4) | (0.4) | (0.8) | (1.6) | (7.5) | (9.1) |
| items | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| Share | - | - | (0.3) | (0.3) | - | (0.3) |
| option | | | | | | |
| costs | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| Goodwill | - | (0.6) | - | (0.6) | - | (0.6) |
| impairment | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| Operating | 1.2 | (0.7) | (3.2) | (2.7) | (7.9) | (10.6) |
| (loss) / | | | | | | |
| profit | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| Finance | | | | (1.0) | - | (1.0) |
| expense | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| Loss | | | | (3.7) | (7.9) | (11.6) |
| before | | | | | | |
| taxation | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| Taxation | | | | 0.1 | - | 0.1 |
| expense | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| Loss | | | | (3.6) | (7.9) | (11.5) |
| after | | | | | | |
| taxation | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
Intra-Group sales are charged at prevailing market prices and mostly originate
from the Specialist Engineering segment.
Year ended 31 December 2008
+-------------+-------------+----------+-------------+---------+--------------+---------+
| | Continuing businesses | |
+-------------+------------------------------------------------+------------------------+
| | Specialist | Consumer | Unallocated | Total | Discontinued | Total |
| | Engineering | Durables | central | Group | Businesses | Group |
| | 2008 | 2008 | costs | 2008 | 2008 | 2008 |
| | | | 2008 | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| Total | 51.6 | 25.8 | 0.4 | 77.8 | 33.8 | 111.6 |
| revenues | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| Inter-group | (4.7) | (0.4) | (0.4) | (5.5) | (1.3) | (6.8) |
| revenues | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| Revenue | 46.9 | 25.4 | - | 72.3 | 32.5 | 104.8 |
| from | | | | | | |
| external | | | | | | |
| customers | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| Operating | | | | | | |
| profit | | | | | | |
| before | | | | | | |
| exceptional | 4.1 | 1.5 | (3.3) | 2.3 | 0.8 | 3.1 |
| items, | | | | | | |
| share | | | | | | |
| options | | | | | | |
| costs and | | | | | | |
| goodwill | | | | | | |
| impairment | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| Exceptional | (0.7) | (1.0) | (0.6) | (2.3) | (9.6) | (11.9) |
| items | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| Share | - | - | (0.2) | (0.2) | - | (0.2) |
| option | | | | | | |
| costs | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| Goodwill | (0.8) | - | - | (0.8) | (4.7) | (5.5) |
| impairment | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| Operating | 2.6 | 0.5 | (4.1) | (1.0) | (13.5) | (14.5) |
| (loss) / | | | | | | |
| profit | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| Finance | | | | (0.8) | - | (0.8) |
| expense | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| Loss | | | | (1.8) | (13.5) | (15.3) |
| before | | | | | | |
| taxation | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| Taxation | | | | (0.9) | - | (0.9) |
| expense | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| Loss | | | | (2.7) | (13.5) | (16.2) |
| after | | | | | | |
| taxation | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
| | | | | | | |
+-------------+-------------+----------+-------------+---------+--------------+---------+
b) Revenue analysis by geographical destination
+-----------+--------------+---------------+------------+----------+--------------+---------------+----------+
| | Continuing | Discontinuing | 2009 | Continuing | Discontinuing | 2008 |
+-----------+--------------+---------------+-----------------------+--------------+---------------+----------+
| | GBP'm | GBP'm | GBPm | GBP'm | GBP'm | GBPm |
+-----------+--------------+---------------+-----------------------+--------------+---------------+----------+
| United | 37.4 | 1.0 | 38.4 | 46.8 | 28.7 | 75.5 |
| Kingdom | | | | | | |
+-----------+--------------+---------------+------------+-------------------------+---------------+----------+
| Rest of | 16.0 | 0.5 | 16.5 | 17.6 | 3.1 | 20.7 |
| Europe | | | | | | |
+-----------+--------------+---------------+------------+-------------------------+---------------+----------+
| North | 4.5 | 0.2 | 4.7 | 4.6 | 0.6 | 5.2 |
| America | | | | | | |
+-----------+--------------+---------------+------------+-------------------------+---------------+----------+
| Rest of | 3.3 | - | 3.3 | 3.3 | 0.1 | 3.4 |
| World | | | | | | |
+-----------+--------------+---------------+------------+-------------------------+---------------+----------+
| Revenue | 61.2 | 1.7 | 62.9 | 72.3 | 32.5 | 104.8 |
| from | | | | | | |
| external | | | | | | |
| customers | | | | | | |
+-----------+--------------+---------------+-----------------------+--------------+---------------+----------+
| | | | | | | | |
+-----------+--------------+---------------+------------+----------+--------------+---------------+----------+
3 Exceptional items
Exceptional items are items of income and expenditure that, in the judgement of
management, should be disclosed separately on the basis that they are material,
either by their nature or their size, to the understanding of the financial
statements and where not to do so would distort the comparability of financial
performance between periods. Items which have been considered appropriate to
disclose as exceptional include: profits and losses on the disposal of
non-current assets; restructuring and reorganisation costs including profits or
losses on the disposal of businesses; and significant impairments of other
current assets.
+-----------------------------+-------+------------+--------------+---------+---------+
| | | Continuing | Discontinued | 2009 | 2008 |
| | | GBPm | GBPm | GBPm | GBPm |
+-----------------------------+-------+------------+--------------+---------+---------+
| | | | | | |
+-----------------------------+-------+------------+--------------+---------+---------+
| Reorganisation and | | 1.0 | - | 1.0 | 4.4 |
| restructuring costs | | | | | |
+-----------------------------+-------+------------+--------------+---------+---------+
| Provision for Romanian | | - | 6.4 | 6.4 | 0.5 |
| losses and impairment | | | | | |
+-----------------------------+-------+------------+--------------+---------+---------+
| Impairment of assets | | 0.1 | 0.9 | 1.0 | 5.3 |
+-----------------------------+-------+------------+--------------+---------+---------+
| Onerous lease costs | | - | 0.2 | 0.2 | 1.4 |
+-----------------------------+-------+------------+--------------+---------+---------+
| Property devaluation | | 0.5 | - | 0.5 | 0.3 |
+-----------------------------+-------+------------+--------------+---------+---------+
| | | | | | |
+-----------------------------+-------+------------+--------------+---------+---------+
| Total exceptional items | | 1.6 | 7.5 | 9.1 | 11.9 |
| before taxation | | | | | |
+-----------------------------+-------+------------+--------------+---------+---------+
| Impairment of goodwill | | 0.6 | - | 0.6 | 5.5 |
+-----------------------------+-------+------------+--------------+---------+---------+
| IFRS2 Share option expense | | 0.3 | - | 0.3 | 0.2 |
+-----------------------------+-------+------------+--------------+---------+---------+
| | | | | | |
+-----------------------------+-------+------------+--------------+---------+---------+
| Total | | 2.5 | 7.5 | 10.0 | 17.6 |
+-----------------------------+-------+------------+--------------+---------+---------+
| | | | | | |
+-----------------------------+-------+------------+--------------+---------+---------+
| Total cash exceptional | | 1.0 | 0.6 | 1.6 | 6.0 |
| items | | | | | |
+-----------------------------+-------+------------+--------------+---------+---------+
| | | | | | |
+-----------------------------+-------+------------+--------------+---------+---------+
4 Discontinued operations
The Group has undertaken a review of its underperforming businesses and has
taken actions to close or sell those businesses. The businesses that are no
longer part of the Group are:
+------------------+------------------------+--------------------------+
| Bacol Fine | Sold | February 2008 |
| Blanking | | |
+------------------+------------------------+--------------------------+
| Down and Francis | Closed | June 2008 |
+------------------+------------------------+--------------------------+
| MRX Automotive | Sold | December 2008 |
+------------------+------------------------+--------------------------+
| Welland | Sold | December 2008 |
| Engineering | | |
+------------------+------------------------+--------------------------+
| Stackright | Closed | December 2008 |
+------------------+------------------------+--------------------------+
| Makespace | Closed | December 2008 |
+------------------+------------------------+--------------------------+
| | | |
+------------------+------------------------+--------------------------+
| BSC (Diecasting) | Sold | April 2009 |
+------------------+------------------------+--------------------------+
| Commercial | Sold | July 2009 |
| Bearings | | |
+------------------+------------------------+--------------------------+
| Hidrosib SA | Administration/Sold | June 2009/March2010 |
+------------------+------------------------+--------------------------+
All of these businesses have been presented as discontinued operations in the
income statement on the basis that irreversible management decisions were taken
in 2008 and 2009, and the communications to interested parties, including the
employees and creditors of the businesses involved, were completed in 2008 and
2009, respectively. Management is of the view that this presentation of
information enables the users of the financial statements to understand the
financial effects of these operations no longer being part of the Group.
+-----------------------------------+----------+--------+--------+----------+-----------+
| | | | | 2009 | 2008 |
| | | | | GBPm | GBPm |
+-----------------------------------+----------+--------+--------+----------+-----------+
| | | | | | |
+-----------------------------------+----------+--------+--------+----------+-----------+
| Revenue | | | | 1.7 | 32.5 |
+-----------------------------------+----------+--------+--------+----------+-----------+
| Cost of sales | | | | (1.4) | (27.9) |
+-----------------------------------+----------+--------+--------+----------+-----------+
| | | | | | |
+-----------------------------------+----------+--------+--------+----------+-----------+
| Gross profit | | | | 0.3 | 4.6 |
+-----------------------------------+----------+--------+--------+----------+-----------+
| Administrative expenses | | | | (0.7) | (3.8) |
+-----------------------------------+----------+--------+--------+----------+-----------+
| Exceptional costs (note 3) | | | | (7.5) | (9.6) |
+-----------------------------------+----------+--------+--------+----------+-----------+
| Goodwill impairment | | | | - | (4.7) |
+-----------------------------------+----------+--------+--------+----------+-----------+
| | | | | | |
+-----------------------------------+----------+--------+--------+----------+-----------+
| Loss before tax of discontinued | | | | (7.9) | (13.5) |
| operations | | | | | |
+-----------------------------------+----------+--------+--------+----------+-----------+
| Attributable tax expense | | | | - | - |
+-----------------------------------+----------+--------+--------+----------+-----------+
| | | | | | |
+-----------------------------------+----------+--------+--------+----------+-----------+
| Loss after tax of discontinued | | | | (7.9) | (13.5) |
| items | | | | | |
+-----------------------------------+----------+--------+--------+----------+-----------+
| Pre tax gain/(loss) of disposal | | | | - | - |
| group | | | | | |
+-----------------------------------+----------+--------+--------+----------+-----------+
| Taxation | | | | - | - |
+-----------------------------------+----------+--------+--------+----------+-----------+
| | | | | | |
+-----------------------------------+----------+--------+--------+----------+-----------+
| After tax gain/(loss) of disposal | | | | - | - |
| group | | | | | |
+-----------------------------------+----------+--------+--------+----------+-----------+
| | | | | | |
+-----------------------------------+----------+--------+--------+----------+-----------+
| Loss for the year from | | | | (7.9) | (13.5) |
| discontinued operations | | | | | |
+-----------------------------------+----------+--------+--------+----------+-----------+
| | | | | | |
+-----------------------------------+----------+--------+--------+----------+-----------+
5 Taxation
+-------------------------------------------+----------+----------+--------+----------+----------+
| | | | | 2009 | 2008 |
| | | | | GBPm | GBPm |
+-------------------------------------------+----------+----------+--------+----------+----------+
| Current tax: | | | | | |
+-------------------------------------------+----------+----------+--------+----------+----------+
| UK corporation tax | | | | - | - |
+-------------------------------------------+----------+----------+--------+----------+----------+
| Adjustments in respect of prior years | | | | (0.2) | (0.8) |
+-------------------------------------------+----------+----------+--------+----------+----------+
| | | | | | |
+-------------------------------------------+----------+----------+--------+----------+----------+
| | | | | (0.2) | (0.8) |
+-------------------------------------------+----------+----------+--------+----------+----------+
| | | | | | |
+-------------------------------------------+----------+----------+--------+----------+----------+
| Overseas taxation | | | | 0.2 | 0.2 |
+-------------------------------------------+----------+----------+--------+----------+----------+
| | | | | | |
+-------------------------------------------+----------+----------+--------+----------+----------+
| Current tax credit | | | | - | (0.6) |
+-------------------------------------------+----------+----------+--------+----------+----------+
| | | | | | |
+-------------------------------------------+----------+----------+--------+----------+----------+
| Deferred tax | | | | | |
+-------------------------------------------+----------+----------+--------+----------+----------+
| Current year | | | | (0.3) | (0.5) |
+-------------------------------------------+----------+----------+--------+----------+----------+
| Effect of change in legislation | | | | - | 1.2 |
+-------------------------------------------+----------+----------+--------+----------+----------+
| Adjustments in respect of prior years | | | | 0.2 | 0.8 |
+-------------------------------------------+----------+----------+--------+----------+----------+
| | | | | | |
+-------------------------------------------+----------+----------+--------+----------+----------+
| | | | | (0.1) | 0.9 |
+-------------------------------------------+----------+----------+--------+----------+----------+
| | | | | | |
+-------------------------------------------+----------+----------+--------+----------+----------+
Taxation for other jurisdictions is calculated at the rates prevailing in the
respective jurisdictions.
6 Loss per share
The basic and diluted loss per share are calculated using the loss attributable
to equity holders of the parent. The adjusted earnings per share uses this
figure adjusted by the post-tax exceptional charges.
There is no dilution in the loss per share calculation at the 31 December 2009.
Diluted earnings per share needs to be disclosed when a Company could be called
upon to issue shares that would decrease net profit or increase net loss per
share. It would be inappropriate to assume that option holders would act
irrationally in exercising out of-the-money options when the Company has made a
loss and therefore the existing options have no dilutive effect in the current
year. Since there are no other diluting future share issues, diluted loss per
share equals basic loss per share for the current year. In the previous year
there were no potential diluting future shares.
The weighted average number of shares used in the calculation of the basic loss
per share, the adjusted earnings per share, and the diluted loss per share is
therefore 119,897,298 (200: 119,897,298).
7 Dividends paid
+-------------------------------------------+----------+----------+--------+---------+---------+
| | | | | 2009 | 2008 |
| | | | | GBPm | GBPm |
+-------------------------------------------+----------+----------+--------+---------+---------+
| | | | | | |
+-------------------------------------------+----------+----------+--------+---------+---------+
| Final dividend (2008: final nil pence) | | | | - | - |
+-------------------------------------------+----------+----------+--------+---------+---------+
| Interim dividend for 2009 (2008: interim | | | | - | - |
| nil pence) | | | | | |
+-------------------------------------------+----------+----------+--------+---------+---------+
| | | | | | |
+-------------------------------------------+----------+----------+--------+---------+---------+
| Total equity dividends paid | | | | - | - |
+-------------------------------------------+----------+----------+--------+---------+---------+
| | | | | | |
+-------------------------------------------+----------+----------+--------+---------+---------+
The Directors recommend that no final dividend be paid and a resolution to this
effect will be proposed at the Annual General Meeting to be held on 25 May 2010.
Therefore the total dividend for the year amounts to GBPnil (2008: GBPnil).
8 Post balance sheet events
Hidrosib SA was placed into Administration in July 2009 and the residual
business and its assets were sold to local management in March 2010, as part of
the disposal of the Advanced Quality Solutions Limited Group of companies.
9 Annual report
Copies of the Annual Report will be posted to
Shareholders by Friday 30 April 2010 and will be available from the same date to
the public on the Company's website (www.metalraxgroup.co.uk) or from Metalrax
Group PLC, Ardath Road, Kings Norton, B39 9PN.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR PGUWWWUPUGRW
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