RNS Number:1518J
Sinclair (William) Holdings PLC
01 March 2005
1 March 2005
WILLIAM SINCLAIR HOLDINGS plc
INTERIM RESULTS FOR THE SIX MONTH PERIOD ENDED
31 DECEMBER 2004
The performance of the Group for the six months ended 31st December 2004 was
below that for the comparative period the previous year following the below
budgeted peat harvest and lower sales to both the retail and professional
markets during the autumn period.
Turnover of the Group was #13.3m (2003: #14.6m). The operating loss for the
Group including the Group's share of joint ventures, for the first six months
was #1.4m (2003: loss #0.8m). The loss per share was 6.1p compared to a loss per
share of 3.5p for the comparative period of the previous year.
The net cash outflow in the first half reflects the seasonal nature of the
business as working capital is increased in line with the demand of the next few
months. The higher borrowing position at the half year reflects both the
realignment of creditors referred to in the last Annual Report plus a change in
the payment terms of certain suppliers which will have no impact in a full year.
The dividend for the half year is 1.0p (2003:1.5p per share).
Board Changes
As a part of the process of restructuring previously notified, the following
Board appointments and changes have been made.
Bernard Burns was appointed Chief Executive on 1 February 2005. Bernard aged 48
who previously worked for Poole Pottery, Silentnight Holdings, Churchill
Tableware and Coates Viyella, has considerable experience in the manufacturing,
selling and distribution of branded goods to the consumer retail market. As a
consequence of this appointment, my own role will, after a short hand-over,
revert to that of Non-Executive Chairman.
Peter Williams was appointed Financial Director on 14 February 2005. Previously
Financial Director with Winchester Growers Limited, a producer and supplier of
plants, flowers and bulbs to UK supermarkets and garden centres, he replaces
Steve Rowland who will remain with the Company as Executive Director until the
end of April 2005.
Philip Nuttall, Group Finance Director of AutoLogic Holdings plc, joins the
Board as Non-Executive Director with effect from today.
Tom Sinclair, who has been associated with the business for almost 50 years,
retires from the Board at the end of March and Roger Feaviour, a previous Chief
Executive, will retire as Non-Executive Director at the end of June 2005.
Trading Review
The polarisation of trade within our business towards the spring months
continues to impact upon the level of sales activity and thus revenue generation
in the first six months of our financial year. In addition the results for the
six months ended December 2004 have been adversely affected by the poor summer
weather resulting in a lower than budgeted peat harvest which limited our
ability to absorb the direct costs of harvesting into stock. As stated in the
Annual Report, the level of activity within the retail market during the autumn
"gardening season" was disappointing which affected the level of trade during
September and October.
As outlined in the Annual Statement profits of the Group for the current
financial year will be below the profits reported for the year ending 30 June
2004.
The business is experiencing increases in input costs as a consequence of raw
material, packaging and utility cost increases driven by the high oil price.
However, the opportunities to increase our selling prices are very limited.
There has been a re-structuring of the Board, a process fundamental to the
strategy of creating a Board of an appropriate shape and structure for the
business and for the challenges faced in driving the business forward. This will
give rise to one off costs in the year arising from recruitment and dual running
costs.
The profit performance of the Group has, over recent times, been disappointing.
To improve performance in a highly competitive market will not be easy. It
requires fundamental change throughout the entire business and total commitment
by all those working for the Group to bring about such change.
Every aspect of the business is being challenged by the new executive team, a
process which will continue for a number of months, but a process which has
already identified areas with potential for profit growth.
Peter Barton
1 March 2005
Consolidated Profit and Loss Account
for the six months ended 31 December 2004 (unaudited)
Restated
Six months Six months Year
ended 31 ended 31 ended
December December 30 June
2004 2003 2004
Notes #'000 #'000 #'000
Turnover
Group and share of joint ventures 13,731 15,062 45,260
Less share of joint ventures turnover (466) (462) (1,088)
-------- -------- --------
13,265 14,600 44,172
------- -------- --------
Operating (loss)/ profit (1,409) (793) 1,364
Share of operating profit of
joint ventures 19 40 81
-------- --------- -------
(Loss)/profit on ordinary
activities before interest (1,390) (753) 1,445
Net Interest payable (90) (104) (295)
-------- --------- --------
(Loss)/profit on ordinary activities
before taxation (1,480) (857) 1,150
Taxation on (loss)/profit
on ordinary activities 1 474 272 (339)
-------- --------- --------
(Loss)/profit for the period (1,006) (585) 811
Dividends 2 (166) (249) (621)
-------- --------- --------
Retained (loss)/profit (1,172) (834) 190
for the period ======== ========= ========
Basic (loss)/
earnings per share 3 (6.1)p (3.5)p (4.9)p
Dividends per share 1.00p 1.50p 3.75p
There are no gains or losses other than the profit or loss for each period
The results for the 6 months ended 31 December 2003 have been restated from
those previously published to take account of the accounting irregularity
referred to in Note 5. The impact on the year to 30 June 2004 of #179,000 after
tax has been pro-rated to the half-year based on turnover. This has the impact
of increasing the loss for the comparative 6 month period by #59,000.
Consolidated Balance Sheet
as at 31 December 2004 (unaudited)
As at Restated As at
31 December As at 30 June
2004 31 December 2004
2003
#'000 #'000 #'000
Fixed assets
Tangible assets 9,878 9,777 10,157
Investments 1,522 1,516 1,516
--------- --------- ---------
11,400 11,293 11,673
--------- --------- ---------
Current assets
Stocks 8,780 8,372 5,262
Debtors 9,329 9,870 10,885
Cash at bank and in hand 193 360 1,614
--------- --------- ---------
18,302 18,602 17,761
--------- --------- ---------
Creditors: amounts falling due within one year
Borrowings (6,237) (5,698) (207)
Other creditors (8,058) (8,720) (12,623)
--------- --------- ---------
(14,295) (14,418) (12,830)
--------- --------- ---------
Net current assets 4,007 4,184 4,931
--------- --------- ---------
Total assets less current liabilities 15,407 15,477 16,604
Creditors : amounts falling due after more
than one year (154) - (179)
Provisions for liabilities and charges (767) (843) (767)
--------- --------- ---------
Net assets 14,486 14,634 15,658
========= ========= =========
Capital and reserves
Called up equity share capital 4,139 4,139 4,139
Reserves 3,401 3,401 3,401
Profit and loss account 6,946 7,094 8,118
--------- --------- ---------
Equity shareholders' funds 14,486 14,634 15,658
========= ========= =========
Consolidated cash flow statement
for the six months ended 31 December 2004 (unaudited)
Six months Six months Year ended
ended 31 ended 31 30 June
December 2004 December 2003 2004
#'000 #'000 #'000
Cash flow from operating activities (6,688) (6,221) 2,098
Returns on investment and
servicing of finance (90) (104) (269)
Taxation 13 (146) (458)
Acquisitions and disposals - (600) (600)
Capital expenditure and financial investment (288) 150 (877)
Equity dividends paid (373) (745) (994)
-------- -------- --------
Cash (outflow) before financing (7,426) (7,666) (1,100)
Net cash flow from financing 805 2,874 100
-------- -------- --------
(Decrease) in cash in the period (6,621) (4,792) (1,000)
======== ======== ========
Reconciliation of net cash flow to movement in net debt
(Decrease) in cash in the period (6,621) (4,792) (1,000)
Cash (inflow) from change in debt (805) (2,874) (100)
-------- -------- --------
Movement in net debt in the period (7,426) (7,666) (1,100)
Net funds at 1 July 2004 1,228 2,328 2,328
-------- -------- --------
Net (debt)/funds at 31 December 2004 (6,198) (5,338) 1,228
======== ======== ========
Consolidated cash flow statement
for the six months ended 31 December 2004 (unaudited)
Six months Six months Year
ended 31 ended 31 ended
December December 30 June
2004 2003 2004
#'000 #'000 #'000
Cash flow from operating activities
Operating (loss)/profit (1,409) (793) 1,364
Depreciation 571 600 1,241
Loss on disposal of fixed assets - - 5
Loss on disposal of property held
for re-sale - 7 7
(Increase) /decrease in stocks (3,518) (2,516) 594
Decrease in debtors 1,338 2,065 723
(Decrease) in creditors (3,529) (5,457) (2,092)
Movement in provisions - (10) -
(Decrease)/increase in amounts due to
associated company (141) (117) 256
--------- --------- ---------
(6,688) (6,221) 2,098
========= ========= =========
Acquisitions and Disposals
Purchase of joint venture - (600) (600)
--------- --------- ---------
- (600) (600)
========= ========= =========
Capital expenditure and financial investment
Purchase of tangible fixed assets (288) (518) (1,562)
Sale of tangible fixed assets - - 17
Sale of property held for resale - 668 668
--------- --------- ---------
(288) 150 (877)
========= ========= =========
Financing
New bank loan 800 3,000 -
New hire purchase agreements 33 - 234
Capital element of finance leases and
hire purchase agreements (28) (126) (134)
--------- --------- ---------
805 2,874 100
========= ========= =========
Notes to the Accounts
1. Turnover
The taxation (credit) on ordinary activities is calculated by applying the
Directors' best estimate of the annual taxation rate to the (loss) for the
period.
2. Dividend
The interim dividend of 1.0p per share will be paid on 6 May 2005 to
shareholders on the register on 15 April 2005.
3. Earnings per share
Earnings per share have been calculated by reference to 16,554,046 shares in
issue.
4. Reconciliation of Movements in Shareholders' Funds
Six months Six months Year
ended 31 ended 31 ended
December December 30 June
2004 2003 2004
#'000 #'000 #'000
Opening shareholders' funds as
previously reported 15,658 16,646 16,646
Prior year adjustment (Note 5) - (1,178) (1,178)
--------- --------- ---------
15,658 15,468 15,468
Retained profit (1,172) (834) 190
--------- --------- ---------
Closing shareholders' funds 14,486 14,634 15,658
========= ======== =========
5. Prior year adjustment
The prior year adjustment relates to inappropriate accounting entries within
accruals. At 30 June 2003, the cumulative impact, net of taxation, was
#1,178,000.
6. Pensions
Full implementation of Financial Reporting Standard No 17 ("FRS 17") has been
deferred until accounting periods beginning on or after 1 January 2005. Although
not currently recognised in the balance sheet of the Group, the FRS 17 deficit
for the defined benefit element of the Group's Pension Scheme has increased from
#6.5m at 30 June 2004 to #7.0m. Whilst the market value of the assets has
increased by #1.2m the liabilities of the scheme have increased following
changes in bond yields and an updating of the actuarial assumptions relating to
mortality rates. In addition the Board have decided to use the government's long
term inflation projections in the calculation of the liabilities.
7. Basis of preparation of accounts
The accounting policies used in the preparation of the interim accounts for the
six month period to 31 December 2004 are the same as those used in the statutory
accounts for the year ended 30 June 2004. The interim report has been approved
by the Board of Directors and is neither audited nor reviewed. The information
does not constitute statutory accounts within the meaning of Section 240 of the
Companies Act 1985. The statutory accounts for the year ended 30 June 2004
received an unqualified audit report and have been filed with the Registrar of
Companies. Comparative figures for the year ended 30 June 2004 have been
extracted from those accounts.
Enquiries
Peter Barton
Chairman Tel: 01522 537561
Alastair Moreton
Arbuthnot Securities Limited Tel: 0207 012 2000
This information is provided by RNS
The company news service from the London Stock Exchange
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