RNS No 7050u
PETERHEAD GROUP PLC
14th August 1998
Contacts: Bill Baugh, Chief Executive
Peterhead Group PLC
Tel: 0113 243 3065
Alistair Mackinnon-Musson
Ian Bailey
Square Mile Communications
Tel: 0171 583 4567
Peterhead Group PLC ("Peterhead")
Preliminary Results
Peterhead, the specialist mechanical asset rental Group,
announces today preliminary results for the year ended 31
January 1998.
CHAIRMAN'S STATEMENT
Introduction
Following the formation of Peterhead in April 1997, it
has been a very difficult first year resulting in a Group
loss after taxation of #2,575,000. This was mainly as a
result of significant one off costs, losses and write-
offs in International Cranes & Equipment Limited of
#1,000,000, losses in Booth Equipment Limited of #425,000
and a number of other non-recurring items, which in total
amounted to approximately #1,200,000. This, together
with the rapid expansion of the crane fleet, has caused
significant working capital difficulties for the Group
and the Board will be writing to shareholders shortly
with proposals for the restructuring of the Group.
Birchwood & Peterhead Crane Company
Birchwood Mechanical Services Limited and Birchwood
Mechanical Sales Limited, the forklift truck businesses,
continued to expand profitably and produced a combined
operating profit of #700,000 on turnover of #6,900,000.
Birchwood now has a hire fleet approaching 1,000 forklift
trucks.
Peterhead Crane Company Limited, the crane hire business,
produced an operating profit of #2,100,000 on turnover of
#11,100,000. The crane fleet has expanded from 94 cranes
in February 1997 to the current level of 162 cranes.
In the current year both Birchwood and Peterhead Crane
continue to trade profitably and the Board believes this
will continue for the remainder of 1998.
International Cranes & Equipment
The very disappointing trading of International Cranes &
Equipment and related write-offs, particularly in respect
of stock, cost the Group approximately #1m. Once the
Board became aware of the deteriorating situation in
International Cranes & Equipment, primarily resulting
from a lack of proper financial disciplines and
management controls, action was taken immediately to
investigate the extent and cause of the problem and
whilst its subsidiary Booth Equipment continued to trade,
International Cranes & Equipment's operations were
discontinued by the end of 1997. Adverse working
conditions were a major contributory factor for the
losses of #425,000 incurred by Booth Equipment. It is
the Board's intention to dispose of Booth Equipment, as
soon as possible.
Working capital
The losses and unplanned costs described above, together
with a rapid expansion of the crane fleet in a relatively
short period of time, which included the acquisition of
Refinery Crane Plant Services (Killingholme) Limited for
#534,000, caused significant working capital difficulties
and put pressure on the bank overdraft facility.
Recent events
In March 1998, as we had not been able to confirm an
agreement on the restructuring of the Group's debt and
had received a conditional offer for part of the
business, we requested and were granted a suspension in
the trading of our shares.
A number of parties expressed an interest in purchasing
Peterhead Crane Company, including a consortium in which
Roger Taylor, Peterhead Crane Company's managing
director, intended to participate. As a consequence,
Mr Taylor resigned as a director of both Peterhead Crane
Company and Peterhead Group plc and the Company appointed
specialist consultants with industry experience to
provide management services to Peterhead Crane Company.
An agreement could not be reached for the sale of the
whole of Peterhead Crane Company with any of the parties
who expressed interest. However, the Board decided that
a reduction in the size of the crane fleet was desirable
and therefore considered a reduced offer from the Roger
Taylor consortium to acquire specific depots.
Consequently, we are at advanced stages of negotiations
with the Roger Taylor consortium for the sale of 41
cranes, a number of tractor units and trailers and some
business mainly based on the Peterhead and Aberdeen
depots, which principally service the North Sea oil
industry. After the sale, Peterhead Group will have a
fleet of 121 cranes, servicing a broad range of
industrial sectors.
Financing arrangements
Tufton Capital Limited, an equity investor, has shown
interest in taking a stake in the Group and has been
prepared to provide short term financial support. This
resulted in June 1998 in an agreement being signed
between ourselves, our bankers and Tufton Capital whereby
the bank, subject to certain conditions, continued to
provide the existing overdraft facility and Tufton
Capital, again subject to certain conditions, provided an
additional facility of #500,000. This agreement was
based on the assumption that, having explored a number of
options open to the Company, it was in the best interests
of the Company to raise additional capital through an
equity injection and to reach an agreement with the Roger
Taylor consortium on the sale of cranes.
The Company is also in negotiations with a leading
provider of asset finance, with a view to refinancing
some of Peterhead's residual fleet of 121 cranes, in
order to achieve a better balance between income and
capital and interest payments.
The Board will be communicating with shareholders, in due
course, on the conclusion of the negotiations and on the
proposals described above.
W Campbell Allan
Chairman
14 August 1998
Consolidated Profit & Loss Account
for year ended 31 January 1998
Continuing operations Discontinued
Acquisit operations Total
ions
1998 1998 1998 1998
# # # #
Turnover 296,194 20,936,313 1,851,089 23,083,596
Cost of sales 23,454 14,988,029 1,887,045 16,898,528
Gross profit/(loss) 272,740 5,948,284 (35,956) 6,185,068
Administrative
expenses 1,273,357 3,908,224 690,409 5,871,990
Other operating
income - 16,670 - 16,670
Operating
profit/(loss) (1,000,617) 2,056,730 (726,365) 329,748
Exceptional item:
Goodwill on
discontinued
operation
previously written 335,299
off to reserves
Net interest 2,670,035
Loss on ordinary
activities before
taxation (2,675,586)
Tax on loss on 100,127
ordinary activities
Loss for the
financial year (2,575,459)
Loss per share (9.8p)
Continuing Discontinued Total
operations operations 1997
1997 1997 As
restated
# # #
Turnover 248,092 1,716,949 1,965,041
Cost of sales 23,651 2,090,734 2,114,385
Gross profit/(loss) 224,441 (373,785) (149,344)
Administrative expenses 925,755 288,811 1,214,566
Other operating income 14,444 - 14,444
Operating loss (686,870) (662,596) (1,349,466)
Net interest 566,839
Loss on ordinary activities
before taxation (1,916,305)
Tax on loss on ordinary
activities -
Loss for the financial year (1,916,305)
Loss per share (21.0p)
Consolidated Balance Sheet
At 31 January 1998
1997
1998 As restated
# #
Fixed assets
Intangible assets 9,281,047 -
Tangible assets 36,780,344 618,861
46,061,391 618,861
Current assets
Stocks 439,130 937,615
Debtors 6,227,974 136,096
Cash at bank and in hand 4,100 172,806
6,671,204 1,246,517
Creditors: amounts falling due within 24,230,530 3,593,393
one year
Net current liabilities (17,559,326) (2,346,876)
Total assets less current liabilities 28,502,065 (1,728,015)
Creditors: amounts falling due after 17,279,211 371,186
more than one year
Provisions for liabilities and charges 1,695,690 -
9,527,164 (2,099,201)
Capital and reserves
Called up share capital 6,886,144 4,511,057
Share premium account 16,634,900 5,562,090
Profit and loss account (13,993,880) (12,172,348)
Shareholders' funds 9,527,164 (2,099,201)
1997
1998 As
restated
# #
Loss for the financial year (2,575,459) (1,916,305)
Exchange differences on foreign 115,628 (23,213)
currency net investments
Total recognised gains and losses for (2,459,831) (1,939,518)
the year
Prior year adjustment (note 4) (526,730)
Total recognised gains and losses (2,986,561)
since last annual report
NOTES TO THE ACCOUNTS
1. RESULTS
The financial information shown above is an abridged
version of the company's full accounts which have
not yet been filed with the Registrar of Companies
and which have not yet been reported on by the
company's auditors.
The auditors' opinion on the accounts will be
subject to a qualification in respect of a
subsidiary undertaking, International Cranes &
Equipment Limited, on the basis that the auditors
were unable to obtain sufficient evidence as to the
nature of certain transactions carried out by that
subsidiary undertaking and they were therefore
unable to confirm that they had obtained all the
information and explanations considered necessary
for the purposes of their report or to determine
whether proper accounting records had been
maintained. Except for any adjustments which may
have been found to be necessary had the auditors
been able to obtain such evidence, their report will
be otherwise unqualified. Further details of this
matter and action taken by the directors are
described in the Chairman's Statement and in note 3
below.
2 GOING CONCERN
The Group meets its day to day working capital
requirements through an overdraft facility which is
repayable on demand, and which is negotiated on a
Group basis for the company and its subsidiary
undertakings.
The nature of the Group's business is such that
there can be considerable unpredictable variation in
the timing of cash inflows. The Group is operating
within an extended temporary facility which expires
on 4 September 1998 and the directors are in
negotiations to realise cash from the sale of assets
and to implement a financial restructuring of the
Group. The directors have prepared projected cash
flow information for the Group for the period ending
31 January 2001 and they are in negotiations for the
implementation of alternative facilities to enable
the Group to continue in operational existence.
The directors remain confident that facilities will
be available which will enable the Group to remain
in operational existence, and have therefore
prepared the accounts on a going concern basis. The
financial statements do not include any adjustments
which would result from an inability to secure the
additional overdraft facility required to enable the
Group to continue as a going concern.
3 transactions undertaken by international cranes &
equipment limited
This wholly-owned subsidiary undertaking was
acquired on 18 September 1996. As reported in the
Chairman's Statement, the trading of this subsidiary
undertaking during the year ended 31 January 1998
was very disappointing and involved the Group in
substantial losses.
Towards the end of 1997, the Board became aware that
certain transactions involving this subsidiary
undertaking did not appear to be either properly
authorised or properly recorded in the books and
records of that company.
On the basis of its own enquiries and that of an
independent review, the Board believes that it has
identified all such losses, costs and write offs and
as far as they are aware, full and prudent provision
has been made for the consequences of all
transactions which have come to their notice.
However, the Board is now reviewing its findings to
determine whether any further action should be
taken.
4 loss per share
The calculation of loss per share is based on the
loss on ordinary activities after taxation of
#2,575,459 (1997: #1,916,305 as restated) and on
26,315,334 Ordinary shares being the weighted
average number of Ordinary shares in issue during
the year (1997: 91,123,360).
The loss per share for the year ended 31 January
1997 has been restated from 1.52p per share to 2.10p
to take into account a prior year adjustment. This
arose from the premium interest payable under a
Novation and Subscription Agreement dated
21 February 1997 between the Company, ICEL One
Limited and others whereby the Company agreed to
assume liabilities of ICEL One Limited amounting to
#1,964,750 at a premium of 40% (#785,900). This
matter was not recognised in the accounts for the
year ended 31 January 1997. The element relating to
that financial year, amounting to #526,730, has now
been recognised as a prior year adjustment in the
accounts for the year ended 31 January 1998 and the
comparative figures restated accordingly. The
balance of #259,170 has been charged to the profit
and loss account for the year ended 31 January 1998.
On 1 April 1997 a share consolidation took place and
accordingly the loss per share for the year ended 31
January 1997 has been restated from 2.10p to 21.0p.
5 dividends
The directors do not propose the payment of a dividend (1997: #Nil).
6 annual general meeting
The date of the Annual General Meeting has yet to be
determined and shareholders will be notified in due
course.
END
FR PIMABLLIBBFP
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