RNS No 7458w
METALRAX GROUP PLC
21 September 1999
Record #6.52m interim profit for Metalrax Group - despite lower turnover
Interim dividend rises by 20% to 1.5p per share
"...further positive developments...scheduled for the second half of the year"
- chairman
An interim pre-tax profit of #6.52m, up 3.3% on last year's #6.31m, despite a
drop in turnover, is reported today by Metalrax Group PLC - specialist
engineers - for the half year to June 30. The interim dividend has been
increased by 20% to 1.5p per share, and Mr Eric Moore, chairman, states:
"We...look forward to reporting further positive developments which are being
scheduled for the second half of the year".
The turnover during the period was #46.42m against #52.67m last year, and
diluted earnings per share have risen by 7% to 3.67p (3.43p). Operating
profit at #6.28m (#5.97m) was up 5.3%, and taxation is #1.97m compared with
#1.96m last year.
In noting the ability of Metalrax group management teams to respond
positively, Mr Moore states that these "impressive results" were achieved in a
difficult environment for manufacturing companies.
In precision components, volume reductions were compensated by expansion
in areas where lower priced commodities "provided more favourable profit
margins" and created new opportunities to supply a widening selection of
industries. Operating profit is up to #3.10m (#3.08m).
Housewares continued to perform well and the product range and customer
portfolios were extended on RTA Wine Rack Company joining the group in April.
Plans were implemented by the group's US companies "for sales presentations of
selected wine rack products to key retailers". There is a rise in operating
profit to #2.04m (#1.88m).
While the cyclical nature of storage and handling equipment was affected
by shortage of turnover from major turnkey projects, "the successful
commissioning of a number of prestigious contracts provided the impetus for a
solid divisional performance", notes Mr Moore. Operating profit is #1.14m
(#1.01m).
The report also shows a near doubling of export turnover to Belgium, and
major export increases to France and Holland.
Capitalised at more than #100m, Metalrax Group PLC - a broad spectrum
engineering group - has a consistent long-term record of outperforming
companies in the engineering sector.
Note: A copy of the interim statement follows
Further information:
Mr Eric Moore, chairman
Telephone: 0121-433 3444
STATEMENT BY THE CHAIRMAN
Results and dividend
Record profitability was again the key feature of our group trading
performance during the first six months of the year. Profit before taxation
increased to #6.524m from #6.314m and operating profit improved by 5.3%
compared with 1998 figures. These advances were accomplished by successfully
increasing added values and implementing cost cutting measures to neutralise
the effect of lower turnover, which at #46.423m reflected reduced raw material
input prices, competitive pressures and a temporary decline in demand from
some customers.
The board has declared an interim dividend of 1.5 pence per share, which
represents an increase of 20% and continues our policy of narrowing the
disparity between the value of interim and final payments. A recommendation of
the increase in total dividends for the current year will be made at the time
of the preliminary announcement next March.
Review
The testing market conditions at home and overseas have placed challenging
demands on management teams throughout the group. Their ability to respond
positively has been underlined by these impressive results which were achieved
in such a difficult environment for manufacturing companies. The accompanying
newsletter for July 1999 provides relevant examples of further developments in
each of the three divisions.
Precision components
The value of our long-established programme of investment in flexible and
versatile production facilities was well demonstrated in the automotive sector
when volumes were reduced by customers engaged in restructuring and preparing
for the introduction of new models. These shortfalls were compensated by
expansion in areas where lower priced commodities provided more favourable
profit margins. This strategic business development created new opportunities
to supply a widening selection of industries.
Housewares
This division has continued to perform well and our product range and customer
portfolios were extended when RTA Wine Rack Company Limited joined the group
in April 1999. As anticipated the ensuing brief selling period was seasonally
quiet and contribution to the half year results became insignificant. As part
of the constant search for additional home and export business, plans were
implemented by our United States colleagues for sales presentations of
selected wine rack products to key retailers.
Storage and handling equipment
The broad base of our general order book again served to deflect any potential
vulnerability to the relatively sluggish market. The cyclical nature of this
sector was vividly illustrated by the shortage of turnover from major turnkey
projects incorporating structural steelwork and related specialist services.
However, the successful commissioning of a number of prestigious contracts
provided the impetus for a solid divisional performance.
Prospects
We are constantly looking for opportunities to expand our operations and to
stimulate growth organically and by acquisition. In the medium term our
fortunes will continue to be influenced by the strength of sterling and
perceived improvements in domestic and global economies. Trade index
statistics reveal some encouraging signs for manufacturing output and consumer
confidence.
We remain clearly focused on our objective of enhancing shareholder value
and look forward to reporting further positive developments which are being
scheduled for the second half of the year.
Eric Moore
CONSOLIDATED PROFIT AND LOSS ACCOUNT
six months ended 30th June 1999
1999 1998 1998
Six months Six months Twelve months
ended ended ended
30th June 30th June 31st December
Unaudited Unaudited Audited
#'000 #'000 #'000
TURNOVER 46,423 52,669 105,799
====== ====== =======
OPERATING PROFIT 6,283 5,968 13,404
Interest receivable 309 433 902
------ ------ ------
6,592 6,401 14,306
Interest payable 68 87 197
------ ------ ------
PROFIT BEFORE TAXATION 6,524 6,314 14,109
TAXATION 1,974 1,957 4,320
------ ------ ------
PROFIT AFTER TAXATION 4,550 4,357 9,789
Minority interests -
equity interests 69 67 187
------ ------ ------
PROFIT FOR THE PERIOD 4,481 4,290 9,602
====== ====== ======
APPROPRIATED AS FOLLOWS:
INTERIM DIVIDEND:
1.50p per share payable
29th October 1999
(1998: 1.25p per share) 1,821 1,558 5,631
RETAINED PROFIT FOR THE PERIOD 2,660 2,732 3,971
------ ------ ------
4,481 4,290 9,602
====== ====== ======
EARNINGS PER SHARE
Basic 3.67p 3.45p 7.75p
Diluted 3.67p 3.43p 7.72p
CONSOLIDATED BALANCE SHEET
30th June 1999
1999 1998 1998
30th June 30th June 31st December
Unaudited Unaudited Audited
#'000 #'000 #'000
FIXED ASSETS
Tangible assets 23,243 23,284 23,778
Intangible assets 2,037 - -
Investments 200 200 200
------ ------ ------
25,480 23,484 23,978
------ ------ ------
CURRENT ASSETS
Stocks 15,209 15,204 13,231
Debtors 19,014 20,248 19,046
Cash at bank 10,883 13,211 12,283
------ ------ ------
45,106 48,663 44,560
CREDITORS
Amounts falling due within one year 22,890 26,177 22,647
------ ------ ------
NET CURRENT ASSETS 22,216 22,486 21,913
------ ------ ------
TOTAL ASSSETS LESS CURRENT
LIABILIITES 47,696 45,970 45,891
CREDITORS
Amounts falling due after more than
one year 121 870 328
------ ------ ------
47,575 45,100 45,563
PROVISION FOR LIABILITIES
AND CHARGES
Deferred taxation 1,293 417 1,293
------ ------ ------
NET ASSETS 46,282 44,683 44,270
====== ====== ======
Financed by:
CAPITAL AND RESERVES
Called up share capital 6,071 6,232 6,119
Share premium account 2,356 2,318 2,318
Capital redemption reserve 166 - 113
Profit and loss account 36,675 35,303 34,775
------ ------ ------
SHAREHOLDERS' FUNDS -
EQUITY INTERESTS 45,268 43,853 43,325
Minority interests -
equity interests 1,014 830 945
------ ------ ------
46,282 44,683 44,270
====== ====== ======
CASH FLOW STATEMENT
six months ended 30th June 1999
1999 1998 1998
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 6,535 4,923 14,046
NET CASH INFLOW FROM RETURNS
ON INVESTMENTS AND SERVICING
OF FINANCE 241 346 705
TAXATION PAID (154) (8) (4,829)
NET CASH OUTFLOW FOR CAPITAL
EXPENDITURE AND FINANCIAL
INVESTMENT (724) (1,375) (3,388)
NET CASH OUTFLOW FOR ACQUISITION (2,387) - (230)
EQUITY DIVIDENDS PAID (4,076) (3,931) (5,462)
------ ------ ------
CASH OUTFLOW BEFORE MANAGEMENT OF
LIQUID RESOURCES AND FINANCING (565) (45) 842
NET CASH INFLOW FOR MANAGEMENT OF
LIQUID RESOURCES 2,419 (677) 631
FINANCING
Issue of ordinary share capital 42 370 370
Purchase of own shares (879) - (1,970)
New borrowings - - 316
Borrowings repaid (4) (181) (341)
------ ------ ------
(841) 189 (1,625)
------ ------ ------
INCREASE IN CASH IN THE PERIOD 1,013 (533) (152)
====== ====== ======
SEGMENTAL ANALYSIS
ANALYSIS BY ACTIVITY
1999 1998 1998
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
Precision components 22,742 3,097 28,323 3,077 53,069 6,359
Housewares 16,611 2,042 16,116 1,877 35,571 4,647
Storage and handling 7,070 1,144 8,230 1,014 17,159 2,398
------ ------ ------ ------ ------- ------
46,423 6,283 52,669 5,968 105,799 13,404
====== ====== ====== ====== ======= ======
GEOGRAPHICAL ANALYSIS
BY ORIGIN
Operating Operating Operating
Turnover profit Turnover profit Turnover profit
#'000 #'000 #'000 #'000 #'000 #'000
United Kingdom 42,846 5,994 49,536 5,691 98,670 12,672
North America 3,577 289 3,133 277 7,129 732
------ ------ ------ ------ ------ ------
46,423 6,283 52,669 5,968 105,799 13,404
====== ====== ====== ====== ======= ======
GEOGRAPHICAL TURNOVER
ANALYSIS BY DESTINATION
#'000 #'000 #'000
North America 3,934 3,240 7,529
Germany 554 1,162 2,255
Sweden 165 221 740
France 321 225 547
Spain 810 853 1,484
Holland 315 202 544
Belgium 421 235 542
Rest of Europe 768 707 1,302
Africa 45 80 154
Far East, Australia,
and other 627 877 1,472
United Kingdom 38,463 44,867 89,230
------ ------ -------
46,423 52,669 105,799
====== ====== =======
Copies of the interim report will be posted to all shareholders on 21st
September 1999 and will be available from the same date to the public from:
The Company Secretary
Metalrax Group PLC
Ardath Road
Kings Norton
Birmingham B38 9PN
END
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