RNS No 1681j
OMI INTERNATIONAL PLC
2nd December 1997
THE ISSUER HAS REQUESTED THAT THE FOLLOWING REPLACES THE ANNOUNCEMENT
RELEASED AT 7.40 AM, WHICH WAS ISSUED IN ERROR.
OMI INTERNATIONAL PLC
INTERIM RESULTS FOR THE SIX MONTHS TO 30TH SEPTEMBER 1997
OMI International plc, the software, design and engineering
solutions group, today announces its interim results and a
change of name.
HIGHLIGHTS
* Profit before tax of #1.8m (1996: #0.4m )
* Sales of #17.7m (1996: #17.2m) - up 8% in local currency
* Earnings per share of 2.4p (1996: 0.5p)
* Dividend of 0.14p (1996: nil)
* Gearing eliminated (1996: 74%) - much strengthened balance
sheet: net cash of #1.3m at 30th September, 1997
* Acquisitions of Forry Inc. on 25th November and the
Transformer Rectifier product line from ABB (USA) on 27th
November, significantly increase market share in auxiliary
power station controls from 16% to 25%
* Subject to shareholder approval, the Group will be renamed
Solvera plc as of 15th January, 1998.
Commenting on the results, Richard Duggan, Executive Chairman,
said:
"At the end of the last financial year I reported that we would
grow the Group organically and through acquisition. The timing
of the sale of the Optronics division was not only important in
creating shareholder value, it was a natural precursor to
obtaining the resources to grow and to give the Group a much
greater focus to its activities. The two acquisitions recently
concluded are the first steps of our expansion plans to create
a much larger software, design and engineering solutions Group.
"The first half of the year has seen the Group begin to
transform itself into a more focused, financially strong
business and the outlook for the Group remains very
encouraging."
Enquiries: Richard Duggan (Executive Chairman)
OMI International plc
Geoff Eades (Finance Director)
Tel: 0171 491 2121
Jonathan Glass/Katharine Sharkey
Brunswick
Tel: 0171 404 5959
OMI INTERNATIONAL PLC
Interim results for the six months to 30th September, 1997
CHAIRMAN'S' REPORT
I am pleased to announce pre-tax profits for the six months to
30 September 1997 of #1.8 million, compared to a pre-tax profit
of #0.4 million for the corresponding period last year and a
profit of #1.0 million for year to 31 March 1997.
Total Group sales at the continuing operations level were #17.7
million for the six months to September 1997 against #17.2
million this time last year, an increase of 3% (8% in local
currency).
Profits from continuing operations, before exceptional
reorganisation costs, were in line with our expectations at
#258,000 compared to #238,000 for the corresponding period last
year.
An interim dividend of 0.14 pence (1996: nil) will be paid on 2
February 1998 to all shareholders on the register at 12
December 1997.
On 1 September 1997 we successfully completed the sale of the
Optronics Division for #8.0 million, realising a profit on the
sale of #2.4 million. The proceeds have been used to eliminate
debt, leaving the Group with a much strengthened balance sheet
and net cash of #1.4 million. The Group's activities are now
focused on software, design and engineering solutions, where we
have already invested in strengthening our existing operations
to drive organic growth.
Greater focus in our activities has enabled us to look more
closely at the way in which our businesses operate to ensure
that we react more speedily to the changing needs of our
customers. To do this we have invested across the business.
In particular, within our UK Design and Documentation
operations we have made a number of changes to the management
team and taken on a number of highly specialised individuals to
meet the requirements of our customers in this technology-led
industry. We have closed two branch operations and provided
#240,000 for the cost of the vacant leasehold properties, which
is included in the total reorganisation cost for the Division
of #731,000.
We have also strengthened the management of our power station
controls business in the UK at a cost of #140,000. We continue
to be encouraged by the global potential for growth in this
area, particularly in the United States where we have moved key
personnel to manage our ever increasing presence.
The total exceptional charge to profits in this six months
period was #871,000. The trading benefits of these actions
will become apparent in the second half of the year and beyond.
On 24 November 1997 we purchased Forry Inc. of Cleveland Ohio
USA, which designs and manufactures a range of particulate
control systems for industrial processes and the power station
markets in the USA for US$3.9 million (#2.3 million).
The purchase of Forry Inc., like that of Redkoh Inc. in January
1997, provides access to new markets and products for our
existing plant controls businesses, as well as broadening our
base in this increasingly important market. It further
supplements our marketing strategy proven by the Redkoh Inc.
acquisition that USA control equipment can be sold via our
global distribution network and that UK precipitator control
products can be sold into the USA market. This acquisition
increases our market share of precipitator controls world-wide
from 25% to 40% and provides our first presence in power
station boiler controls.
As part of our strategy of providing our customers with a
completely integrated controls solution, on 26 November 1997 we
agreed, subject to contract, to acquire the transformer
rectifier product line of a subsidiary of ABB, Asea Brown
Boveri Limited, based in Virginia, USA for $0.9 million (#0.5
million). Transformer rectifiers are an established and
successful OMI product sold world-wide by our plant control
business, Castlet, based in Lincoln. Manufacture in the USA
will supplement the products sold by Fog and Redkoh in the USA
and will enable the Group to develop further its global sales
of transformer rectifiers.
Overall, these two acquisitions are strategically important to
the development of our existing operations and I anticipate
substantial synergy gains and new market opportunities in 1998.
In our Design and Documentation division, strong European
demand for our software products and design services led to an
increase in operating profits of 76% at Peters & Zabransky and
Logistics Software. However elsewhere in the UK the slow down
in orders received from the Ministry of Defence after the UK
General Election in May affected the performance of our UK
Documentation operations which reduced the overall divisions
results by some 45% below this time last year. Sales of our
unique Omega PS software package have again been strong in the
first six months of the year, exceeding our expectations and we
will be making marketing initiatives in the second half of the
year to exploit the product's world-wide sales potential.
The Environmental Division produced a 62% increase in operating
profits (before reorganisation costs) primarily due to the
continuing performance improvement in the hydraulic and nuclear
engineering operations and the demand for car diagnostics.
Our plant control businesses operate in a global market and we
are expanding our operational capability into those countries
that enable us to be closer to our customers and to supply from
local resources. Increasingly these operations will reduce our
exposure to currency transaction fluctuations.
At the end of the last financial year I reported that we would
grow the Group organically and through acquisition. The timing
of the sale of the Optronics division was not only important in
creating shareholder value, it was a natural precursor to
obtaining the resources to grow and to give the Group a much
greater focus to its activities. The two acquisitions recently
concluded are the first steps of our expansion plans to create
a much larger software, design and engineering solutions Group.
While we continue to evaluate opportunities, only those targets
that meet our performance requirements will be pursued.
The name OMI (Optical and Medical International) was derived
from the Group's original activities. Following the disposal
of our Medical business in 1989 and the more recent disposal of
our optical business in September this year, the Group will be
renamed Solvera plc. Individual subsidiaries within the Group
will, however, continue to trade under their existing names and
identities. The proposed name change will be effective from 15
January 1998, subject to shareholder approval at an EGM on that
date.
The first half of the year has seen the Group begin to
transform itself into a more focused, financially strong
business. We continue to enjoy generally favourable trading
conditions, and the outlook for the Group remains very
encouraging.
RICHARD DUGGAN
EXECUTIVE CHAIRMAN
OMI INTERNATIONAL PLC
Consolidated Profit and Loss Account
For the six months ended 30 September 1997
Half-Year Half-Year Year
Ended Ended Ended
30 Sept 30 Sept 31 March
1997 1996 1997
#000's #000's #000's
Turnover (Note 1)
Continuing operations 17,665 17,180 34,858
Discontinued operations 2,848 4,387 8,158
---------- ---------- ---------
20,513 21,567 43,016
Cost of sales (15,477) (16,162) (31,689)
---------- ---------- ---------
Gross profit
Continuing operations 4,244 4,213 9,105
Discontinued operations 792 1,192 2,222
---------- ---------- ---------
5,036 5,405 11,327
Net operating expenses
Reorganisation (871) - -
---------- ---------- ---------
Other (4,536) (4,714) (9,679)
Operating profit/(loss) (Note
1)
Continuing operations
Pre reorganisation expenses 258 238 872
Reorganisation expenses (871) - -
---------- ---------- ---------
(613) 238 872
Discontinued operations 242 453 776
---------- ---------- ---------
(371) 691 1,648
Profit on sale and 2,433 - -
termination of discontinued
operations (Note 2)
---------- ---------- ---------
Profit on ordinary activities 2,062 691 1,648
before interest
Net interest payable (285) (316) (641)
Profit on ordinary activities 1,777 375 1,007
before taxation
Tax on profit on ordinary - - 121
activities (Note 3)
---------- ---------- ---------
Profit for the period 1,777 375 1,128
Dividends paid and proposed (104) - (74)
---------- ---------- ---------
Retained profit (Note 4) 1,673 375 1,054
---------- ---------- ---------
Earnings per share 2.4p 0.5p 1.5p
Dividend per share 0.14p nil p 0.1p
OMI INTERNATIONAL PLC
Consolidated Balance Sheet
At 30 September 1997
As at As at As at
30 Sept 30 Sept 31 March
1997 1996 1997
#000's #000's #000's
Fixed assets
Intangible assets 1,239 516 1,331
Tangible assets 4,492 7,986 7,654
Investments 384 355 384
---------- ---------- ---------
6,115 8,857 9,369
Current assets
Stocks and WIP 3,659 5,448 5,446
Trade debtors 7,204 8,209 8,320
Other debtors 1,296 1,152 1,128
Cash at bank & in hand 4,349 814 685
---------- ---------- ---------
16,508 15,623 15,579
Creditors: amounts falling
due within one year
Bank loans and overdrafts (100) (1,315) (932)
Debt finance - (2,437) (572)
Finance lease obligations (116) (220) (310)
Trade creditors (3,679) (4,509 (4,537)
Other creditors (4,187) (4,280) (5,654)
(8,082) (12,761) (12,005)
Net current assets 8,426 2,862 3,574
---------- ---------- ---------
Total assets less current 14,541 11,719 12,943
liabilities
Creditors: amounts falling
due after more than one year
Bank loans (2,578) (2,404) (2,653)
Finance lease obligations (183) (376) (593)
Other creditors - (5) (19)
---------- ---------- ---------
(2,761) (2,785) (3,265)
Provisions for liabilities (754) (945) (639)
and charges
---------- ---------- ---------
Net assets 11,026 7,989 9,039
---------- ---------- ---------
Equity shareholders' funds 11,026 7,989 9,039
(Note 4)
---------- ---------- ---------
The interim statements were approved by the Board of Directors
on 28 November 1997.
OMI INTERNATIONAL PLC
Consolidated Cash Flow
Statement
Half-Year Half- Year
ended Year ended
30 Sept 1997 ended 31
#000's #000's 30 Sept March
1996 1997
#000's #000's
Cash (outflow)/inflow from (1,347) 1,739 4,155
operating activities
(Note 5)
Returns on investments and (359) (316) (641)
servicing of finance:
(30 Sept 1997 includes
payments of dividends of
#74,000
(30 Sept 1996 - #nil, 31
March 1997 - #nil))
Taxation paid (32) (57) (63)
Capital expenditure and
financial investment
Purchase of tangible fixed (519) (665) (1,043)
assets
Purchase of intangible fixed (229) (7) (157)
assets
Proceeds of sale of fixed 85 10 85
assets
------ ------- -------
(663) (662) (1,115)
Acquisitions and disposals
Proceeds of sale of 7,811 - -
discontinued businesses (net
of expenses paid)
Purchase of subsidiary (120) - (219)
undertakings (includes
deferred consideration)
------ ------- -------
Purchase of associated - (316) (29)
undertakings (includes
deferred consideration)
7,691 (316) (248)
Cash inflow before use of 5,290 388 2,088
liquid resources and
financing
Financing
(Decrease)/increase in debt (717) 1,188 (657)
due within one year
(Decrease)/increase in debt (75) 2,290 2,613
due beyond one year
------ ------- -------
(792) 3,478 1,956
------ ------- -------
Increase in cash during the 4,498 3,866 4,044
period
------ ------- -------
RECONCILIATION OF NET CASH
FLOW TO MOVEMENT IN NET DEBT
Increase in cash during the 4,498 3,866 4,044
period
Cash outflow/(inflow) from 792 (3,478) (1,956)
debt and lease financing
------ ------- -------
Change in net debt resulting 5,290 388 2,088
from cash flows
Finance leases disposed of 540 - -
with discontinued operations
New finance leases (81) - (233)
Translation difference (2) 42 138
------ ------- -------
Movement in net debt in the 5,747 430 1,993
period
Net debt at beginning of (4,375) (6,368) (6,368)
period
------ ------- -------
Net cash/(debt) at end of 1,372 (5,938) (4,375)
period
------ ------- -------
Notes to the Interim
Statements
1. SEGMENTAL ANALYSIS
Half-Year Half-Year Year
ended ended Ended
30 Sept 30 Sept 31 March
1997 1996 1997
#000's #000's #000's
Turnover
Design and Documentation 8,119 9,550 18,675
Environmental 9,546 7,630 16,183
---------- ---------- --------
Continuing operations 17,665 17,180 34,858
Discontinued operations 2,848 4,387 8,158
---------- ---------- --------
Total 20,513 21,567 43,016
---------- ---------- --------
Post Reorg'n Pre
Reorg'n Cost Reorg'n
Cost Cost
#000's #000's #000's
Operating
profit/(loss)
Design and (393) 731 338 620 1,255
Documentation
Environmental 569 140 709 437 1,073
Central costs (789) - (789) (819) (1,456)
------ ------- ------- --------- --------
Continuing (613) 871 258 238 872
operations
Discontinued 242 - 242 453 776
operations
------ ------- ------- --------- --------
Total (371) 871 500 691 1,648
------ ------- ------- --------- --------
Discontinued operations represent the Optronics businesses
which the Group sold on 1 September 1997 disclosed below.
2. DISPOSAL OF OPTRONICS BUSINESSES
On 1 September 1997 the Group disposed of the Optronics
businesses for #8,000,000 excluding the reduction Group finance
lease debt of #540,000 within those businesses. Expenses
relating to the transaction were #888,000 of which #189,000
were paid as at 30 September 1997.
3. TAXATION
The taxation charge for the period ended 30 September 1997 is
based on an estimate of the effective tax rate likely to be
borne by the Group as a whole for the year ending 31 March
1998.
4. SHAREHOLDERS' FUNDS
Half-Year Half-Year Year
ended ended ended
30 Sept 30 Sept 13 March
1997 1996 1997
#000's #000's #000's
Retained profit for the 1,673 375 1,054
financial period
Realisation of goodwill 331 - -
reserve
Exchange adjustments (17) (20) (119)
Increase in share capital and - - 470
premium
--------- --------- --------
Net increase in shareholders' 1,987 355 1,405
funds
Shareholders' funds at 9,039 7,634 7,634
beginning of period
Shareholders' funds at end of 11,026 7,989 9,039
period
--------- --------- --------
5. RECONCILIATION OF OPERATING (LOSS)/PROFIT TO NET
CASH FLOW FROM OPERATING ACTIVITIES
Half-Year Half-Year Year
ended ended ended
30 Sept 30 Sept 13 March
1997 1996 1997
#000's #000's #000's
Operating profit after (371) 691 1,648
reorganisation costs
Depreciation and amortisation 883 969 1,872
Profit on sale of fixed (50) - (22)
assets
Decrease in stocks 10 560 690
(Increase)/decrease in (569) 722 674
debtors
(Decrease)/increase in (1,365) (534) 415
creditors
Increase/(decrease) in 115 (669) (1,122)
provision
---------- --------- ---------
Cash (outflow)/inflow from (1,347) 1,739 4,155
operations
---------- --------- ---------
6. BASIS OF PREPARATION AND AVAILABILITY OF FURTHER COPIES
a. This interim report does not constitute statutory
accounts.
b. The summary consolidated profit and loss accounts, balance
sheets and cash flow statements have been prepared on a basis
consistent with the Financial Statements for the year ended 31
March 1997.
c. The summary consolidated profit and loss account and cash
flow statement for the year ended 31 March 1997 and the summary
consolidated balance sheet at 31 March 1997 have been extracted
from the latest published statutory accounts on which the
report of the auditors, Deloitte & Touche, was unqualified and
which have been delivered to the Registrar of Companies.
d. The summary consolidated profit and loss account and cash
flow statement for the six months ended 30 September 1996 and
the summary consolidated balance sheet as at 30 September 1996
have been extracted from the previous interim report.
e. Amounts included in the consolidated cash flow for the
period ended 30 September 1996 as purchase of associates have
been reclassified as reduction in provisions at 31 March 1997.
f. A copy of this statement has been posted to all
shareholders and further copies of this statement are available
from the Company Secretary at 1 Hay Hill, London W1X 7LF.
Telephone number 0171 491 2121.
END
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