RNS Number:8714Z
Sinclair (William) Holdings PLC
16 March 2006
16 March 2006
7.00 a.m.
WILLIAM SINCLAIR HOLDINGS plc
INTERIM RESULTS FOR THE SIX MONTH PERIOD ENDED
31 DECEMBER 2005
This is our first set of results prepared using International Financial
Reporting Standards ("IFRS"). The figures for the previous half year and for the
year to 30 June 2005 have been re-stated for comparison purposes. A statement
explaining the impact of IFRS and reconciling the Group's figures to those
previously published under UK GAAP was published on 6 March 2006 and is
available on our web site, (www.william-sinclair.co.uk).
The performance for the Group for the six months ended 31 December 2005 was a
little disappointing with the results slightly worse than the corresponding
period in 2004.
Turnover of the Group for the six months ended 31 December 2005 was #11.4
million (2004 #12.9 million). The loss before tax was #1.5 million (2004 #1.4
million). The basic loss per share was 6.2p (2004 5.6p) and the diluted loss per
share was 6.0p (2004 5.6p).
Our net debt position as at 31 December 2005 shows net borrowings of #4.4
million and is a reflection of the seasonality of our business. This was in line
with expectations.
The dividend for the half year is unchanged at 1.0p per share.
Trading Review
Overall, sales turnover decreased by #1.5 million (11.4%) as we exited some
unprofitable domestic and export business. Additionally, retail sales activity
has been disappointing with independent garden centres generally unwilling to
carry high levels of stock following two consecutive poor selling seasons.
Reorganisation at several of our major customers has brought some uncertainty
and some delay in establishing their requirements. This has had a knock-on
effect on our professional grower customers. As a consequence, forward order
levels are low and the trend to just in time service has accelerated.
However, this mildly disappointing sales performance has been balanced by
significant progress in our margin improvement programme, which aims to reduce
the cost of goods and services into our business and, with further improvements
anticipated in the next 18 months, we believe we are well placed to take
advantage of any improvement in sales levels as the season progresses.
We are continuing to focus on improving margins, a task made more difficult by
increasing energy and packaging costs. Additionally, some modest one-off costs
have been incurred to secure future margin improvement. This, together with the
recent investment in the new packaging line at Lincoln, makes us, we believe,
the lowest cost producer of growing media in the UK.
Our joint venture with Freeland continues to perform well and in line with
expectations.
IFRS
As stated above, these results and the comparatives have been prepared using
IFRS.
The net impact of the changes on the Income Statement is minor with the extra
costs of pension contributions being offset by the release of provisions for
holiday pay and foreign currency forward contracts. However, the figure
disclosed for turnover is now net of sales volume and payment discounts of #1.2
million in the six months to 31 December 2005. These would previously have been
included in operating expenses.
The changes to the balance sheet are more significant with the main item being
the inclusion of the deficit in the Group's defined benefit pension scheme. This
deficit, which was #7.2 million as at 30 June 2005, has fallen to #6.2 million
as at 31 December 2005. If the recent improvement in equity values is sustained,
we would expect a further reduction in the deficit when reporting our full year
results.
The other major change to the balance sheet is to deferred tax. We now recognise
a deferred tax liability in respect of the upward revaluation of our properties
but also an asset in respect of deferred tax on the pension deficit.
The estimated cost of conversion to IFRS in the full year is expected to be
approximately #60,000.
The Future
Recruitment of an additional non-executive director is underway and should be
completed in the near future.
As we reported at the end of last year, the new management team has identified a
number of opportunities to improve profitability. Some of these initiatives have
already been implemented and, given a normal trading pattern, will begin to show
benefit in the second half of the year, such that the trading performance in the
year to 30 June 2006 will be in line with market expectations.
Bill Simpson
Chairman
Consolidated Income Statement Six mths Six mths Year ended
for the six months ended 31 December ended ended
2005 (unaudited) 31 Dec 31 Dec 30 June
2005 2004 2005
Notes #'000 #'000 #'000
Turnover 11,411 12,884 41,453
Operating expenses (12,867) (14,118) (40,481)
---------------------------------
Operating (loss)/profit (1,456) (1,234) 972
Share of post tax profit of
joint ventures 72 13 75
--------------------------------
(Loss)/profit on ordinary
activities before interest (1,384) (1,221) 1,047
Finance costs (88) (119) (388)
Other finance expenses - pensions (24) (58) (116)
-------------------------------
(Loss)/profit before taxation (1,496) (1,398) 543
Taxation 1 491 463 (124)
------------------------------
(Loss)/profit for the period
attributable to members of the parent
company (1,005) (935) 419
==============================
Basic (loss)/earnings per share 3 (6.2)p (5.6)p 2.5p
Diluted (loss)/earnings per share (6.0)p (5.6)p 2.5p
Dividends per share 2 1.00p 1.00p 3.00p
Consolidated Statement of Recognised Six mths Six mths Year ended
Income and Expenses ended ended
31 Dec 31 Dec 30 June
2005 2004 2005
#'000 #'000 #'000
Actuarial gain/(loss) on deferred
pension scheme 1,037 (465) (823)
Revaluation of land and buildings - - 2,376
Tax on items taken directly to equity (306) 145 (455)
----------------------------------
Net Income/(expense)recognised
directly in equity 731 (320) 1,098
(Loss)/profit for the period (1,005) (935) 419
----------------------------------
Total recognised income and
expense for the period (274) (1,255) 1,517
==================================
Consolidated Balance Sheet As at As at As at
as at 31 December 2005 (unaudited) 31 Dec 31 Dec 30 June
2005 2004 2005
#'000 #'000 #'000
Non-current assets
Property, plant and equipment 11,780 9,770 12,308
Computer software 90 108 100
Investments 1,663 1,551 1,591
Deferred tax asset - 739 83
--------------------------------------
13,533 12,168 14,082
======================================
Current assets
Inventories 8,262 8,780 5,550
Trade and other receivables 5,749 9,329 12,403
Cash at bank and in hand 125 193 96
--------------------------------------
14,136 18,302 18,049
--------------------------------------
--------------------------------------
Total assets 27,669 30,470 32,131
======================================
Current liabilities
Trade and other payables (5,618) (7,892) (11,225)
Interest bearing liabilities (3,755) (6,237) (1,124)
--------------------------------------
(9,373) (14,129) (12,349)
======================================
Non-current liabilities
Provisions (383) (282) (146)
Retirement benefit provisions (6,212) (7,009) (7,249)
Interest bearing liabilities (785) (154) (878)
--------------------------------------
(7,380) (7,445) (8,273)
--------------------------------------
--------------------------------------
Total liabilities (16,753) (21,574) (20,622)
--------- --------- ---------
--------------------------------------
Net Assets 10,916 8,896 11,509
======================================
Equity
Called up equity share capital 4,139 4,139 4,139
Capital redemption reserve 1,523 1,523 1,523
Revaluation reserve 2,855 1,191 2,855
Other reserves 176 176 176
Share based payments 18 - 6
Profit and loss account 2,205 1,867 2,810
--------------------------------------
Equity attributable to the members of 10,916 8,896 11,509
parent company
======================================
Consolidated cash flow statement
for the six months ended 31 December 2005
(unaudited) Six mths Six mths
ended ended Year ended
31 Dec 31 Dec 30 June
2005 2004 2005
#'000 #'000 #'000
Cash flow from operating activities (2,152) (6,675) (1,393)
Cash flow from investing activities 67 (282) (884)
Cash flow from financing activities (517) 336 (78)
--------------------------------
(Decrease) in cash in the period (2,602) (6,621) (2,355)
================================
Cash and cash equivalents
at 1 July 2005 (901) 1,454 1,454
(Decrease) in cash in the period (2,602) (6,621) (2,355)
--------------------------------
Cash and cash equivalents
at 31 December 2005 (3,503) (5,167) (901)
================================
Cash flow from operating activities
Operating (loss)/profit (1,456) (1,234) 972
Amortisation of goodwill - - -
Depreciation 484 542 1,053
(Profit)/Loss on disposal
of fixed assets (8) - (38)
Share based payment expense 12 - 6
Movement in provisions (108) (108) -
Pension contributions paid less amounts
recognised in the income statement 47 (38) (128)
--------------------------------
Operating profit before changes in working
capital and provisions (1,029) (838) 1,865
(Increase)/decrease in stocks (2,712) (3,518) (288)
(Increase)/decrease in debtors 6,747 1,338 (1,712)
(Decrease)/increase in creditors (5,607) (3,670) (1,179)
Movement in reinstatement provision - - (136)
Income taxes received 449 13 57
--------------------------------
(2,152) (6,675) (1,393)
================================
Cash flow from investing activities
Interest received 5 6 6
Purchase of tangible fixed assets (942) (288) (934)
Sale of tangible fixed assets 1,004 - 44
--------------------------------
67 (282) (884)
================================
Cash flow from financing activities
Interest paid (86) (89) (327)
Interest element of finance lease payments (7) (7) (14)
Dividend received from joint venture - - 21
Dividends paid to members of the parent company (331) (373) (537)
New borrowings - 800 800
Repayment of borrowings (45) - -
Repayment of capital element of finance leases (48) 5 (21)
--------------------------------
(517) 336 (78)
================================
Reconciliation of net cash flow to movement in net debt
Six mths Six mths
ended ended Year ended
31 Dec 31 Dec 30 June
2005 2004 2005
#'000 #'000 #'000
(Decrease) in cash in the period (2,602) (6,621) (2,355)
Cash (inflow) from change in debt 93 (805) (779)
-------------------------------
Movement in net debt in the period (2,509) (7,426) (3,134)
Net funds at 1 July 2005 (1,906) 1,228 1,228
-------------------------------
Net (debt)/funds at 31 December 2005 (4,415) (6,198) (1,906)
===============================
Notes to the Accounts
1. Taxation
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 8 May 2006 to
shareholders on the register on 18 April 2006.
3. Earnings per share
Earnings per share have been calculated by reference to 16,554,046 shares in
issue.
4. Reconciliation of movements in equity attributable to members of the
parent company
Six mths Six mths Year ended
ended ended
31 Dec 31 Dec 30 June
2005 2004 2005
#'000 #'000 #'000
Opening equity attributable to members
of parent company 11,509 10,523 10,523
Total recognised income and expenses
for the period (274) (1,255) 1,517
Dividends paid (331) (372) (537)
Share based payments taken directly to
equity 12 - 6
---------------------------------------
Closing equity attributable to members
of the parent company 10,916 8,896 11,509
=======================================
5. Basis of preparation of accounts
The company has adopted International Financial Reporting Standards for the
preparation of these interim accounts. The new standards have been applied
consistently for the six months to 31 December 2005 and for all comparatives
shown.
A "Conversion Statement" explaining the impact of the new standards and
reconciling the accounts prepared under UK GAAP to the new standards was
released to the Stock Exchange on 6 March 2006. The conversion statement
includes reconciliations as at 1 July 2004, 31 December 2004 and 30 June 2005.
The statement is available through the Company's web site at
www.william-sinclair.co.uk as well as through the Stock Exchange web site.
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 2005 received an unqualified audit report
and have been filed with the Registrar of Companies.
Enquiries
Bill Simpson
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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