RNS Number:7175S
Sinclair (William) Holdings PLC
12 March 2007
12 March 2007
WILLIAM SINCLAIR HOLDINGS plc
("William Sinclair", the "Company" or the "Group")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2006
William Sinclair Holdings plc, one of the UK's leading producers of commercial
horticulture and branded garden products, is pleased to announce its interim
results for the 6 months ended 31 December 2006.
William Sinclair provides peat and fertiliser products to the retail and
commercial sectors. William Sinclair's well established brands include J Arthur
Bower's, Silvaperl and New Horizon - the leading brand in the fast growing peat
free garden compost and organic plant foods sector.
William Sinclair's customers include national accounts such as Wyevale,
Wilkinson, Tesco, Homebase and B&Q as well as an extensive range of independent
garden centres.
Highlights
*Turnover decreased by 7% to #10.6 million (2005: #11.4 million) as the
Group continues to reduce its exposure to low margin business
*Loss before tax decreased by 17% to #1.2 million (2005: #1.5 million)
*The interim dividend for the half year is unchanged at 1.0p per share
*Further progress made with cost reduction programme including
rationalisation of bark processing into the main Carlisle plant
*Good progress at Freeland joint venture which has developed new
technology to produce environmentally sensitive, high-quality compost from
garden waste
*The Company successfully completed its move from the Full List to AIM on
20 December 2006
Bill Simpson, Chairman, commented,
"We are pleased with the rate of progress made in the first half of the
financial year with an improved overall performance. Furthermore, developments
within our Freeland joint venture are looking promising.
"The Company anticipates continued operational and financial progress in the
second half of the year."
Enquiries:
Bill Simpson, Chairman Tel: 01522 537561
Bernard Burns, Chief Executive
Arbuthnot Securities Limited Tel: 020 7012 2000
Alastair Moreton/Alasdair Younie
Madano Parnership Tel: 020 7593 4000
Mark Way/Caroline Sturdy
Chairman's Statement
Introduction
I am pleased to report an improvement in our overall trading performance for the
6 months ending 31 December 2006 compared to the same period in 2005.
Trading Review
Group turnover during the period was #10.6 million (2005: #11.4 million) as we
continued to reduce our exposure to low-margin business. The business in the
first half was also affected whilst certain contractual changes were agreed with
Wyevale Garden Centres Ltd.
In line with the seasonality of our business, the Group recorded a loss before
tax in the first half, though this was reduced to #1.25 million from #1.50
million in the same period of 2005. The basic loss per share was 5.2p (2005:
6.1p) and the diluted loss per share was 5.0p (2005: 5.8p).
Due to the investment we have made in new packing equipment during the latter
part of 2005 we have been able to prepare more stock during the first half,
ready for selling in the season ahead. This is the main reason why our net debt
has increased to #5.6 million (2005: #4.4 million).
The interim dividend for the half year is unchanged at 1.0p per share.
Business Review
J Arthur Bowers and New Horizon, our principle brands, featured favourably in
Gardening Which and we are acknowledged as leading the market in quality, both
for consumer products and for professional growers.
The Group's service levels have continued to improve and we are confident of
maintaining our leading position. The retail trade continues to move toward
just-in-time supply and, with the vagaries of the weather making forecasting
difficult, our customers are increasingly dependent on suppliers for prompt
delivery. Our recent improvements in stocking and transport efficiencies mean we
are ideally placed to take advantage of this trend.
Further progress on reducing the cost base has been made and we have enhanced
our position as the lowest cost producer in the industry. In January 2007, we
announced the closure of a bark processing plant in Cumbria. Our main plant at
Carlisle will benefit from the higher volume processed there. Short term
re-organisation costs will be incurred and absorbed this year with significant
savings coming next year.
We are continuing to evaluate other possible cost saving opportunities
including, but not exclusively, any potential for further factory consolidation
and site disposals.
Good progress has been made in the period at Freeland, our 50% joint venture,
which has developed a new technology to improve yield from garden cuttings.
Material that would previously have gone to landfill will soon be recycled as a
valuable component in peat reduced composts.
Going forward, we intend to focus the Company on more environmentally friendly
gardening solutions and the Group's policies and products will change over the
next 12 months to reflect this focus and our market leading position in this
area.
Outlook
The Board is pleased with the Company's results for the 6 months ended 31
December 2006 and its trading in January and February 2007. Accordingly, the
Board anticipates continued operational and financial progress in the second
half of the year.
Bill Simpson
Chairman
Consolidated Income Statement Six months Six months Year ended
for the six months ended 31 December ended ended
2006 (unaudited) 31 December 31 December 30 June
2006 2005 2006
Notes #'000 #'000 #'000
Revenue 10,631 11,411 39,129
Operating expenses (11,858) (12,867) (38,350)
---------- --------- --------
Operating (loss)/profit (1,227) (1,456) 779
Share of post tax profit of joint
ventures accounted for using the
equity method 49 72 374
---------- --------- --------
Group operating (loss)/profit
from continuing operations (1,178) (1,384) 1,153
Finance revenue 2 5 29
Finance costs (79) (93) (310)
Other finance expenses -
pensions 6 (24) (32)
---------- --------- --------
(Loss)/Profit from continuing
operations before taxation (1,249) (1,496) 840
Tax credit/(expense) 1 390 491 (181)
---------- --------- --------
(Loss)/Profit attributable to
members of the parent company (859) (1,005) 659
========== ========= ========
Earnings per share (pence)
Basic EPS on profit for
the period 3 (5.2)p (6.1)p 4.0p
Diluted EPS on profit
for the period 3 (5.0)p (5.8)p 3.9p
Dividends per share 2 1.0p 1.0p 3.0p
Consolidated Statement of Recognised Six months Six months Year ended
Income and Expenses ended ended 30 June
31 December 31 December 2006
2006 2005
#'000 #'000 #'000
Actuarial gains/ (losses) on defined
benefit pension scheme 56 1,037 2,135
Revaluation of property, plant
and equipment - - 964
Tax on items taken directly to
or transferred from equity (17) (306) (929)
---------- --------- --------
Net Income/(expense)recognised
directly in equity 39 731 2,170
(Loss)/profit for the period (859) (1,005) 659
---------- --------- --------
Total recognised income and
expense for the period 4 (820) (274) 2,829
========== ========= ========
Consolidated Balance Sheet As at As at As at
as at 31 December 2006 (unaudited) 31 December 31 December 30 June
2006 2005 2006
Notes #'000 #'000 #'000
Non-current assets
Property, plant and equipment 12,688 11,780 12,677
Intangible assets 1,149 1,162 1,159
Investments accounted for using the
equity method 907 591 858
---------- --------- --------
14,744 13,533 14,694
---------- --------- --------
Current assets
Inventories 8,880 8,262 4,967
Trade and other receivables 6,026 5,749 12,149
Cash and short term deposits 155 125 153
---------- --------- --------
15,061 14,136 17,269
---------- --------- --------
---------- --------- --------
Total assets 29,805 27,669 31,963
========== ========= ========
Current liabilities
Trade and other payables (5,216) (5,618) (10,930)
Financial liabilities (5,073) (3,755) (251)
Corporation tax payable (131) - (131)
---------- --------- --------
(10,420) (9,373) (11,312)
---------- --------- --------
Non-current liabilities
Financial liabilities (697) (785) (757)
Deferred tax liabilities (931) (225) (853)
Provisions (182) (158) (170)
Defined benefit pension plan deficit (4,850) (6,212) (5,007)
---------- --------- --------
(6,660) (7,380) (6,787)
---------- --------- --------
---------- --------- --------
Total liabilities (17,080) (16,753) (18,099)
========== ========= ========
---------- --------- --------
Net Assets 12,725 10,916 13,864
========== ========= ========
Capital and reserves
Equity share capital 4,139 4,139 4,139
Capital redemption reserve 1,523 1,523 1,523
Revaluation reserve 3,501 2,855 3,501
Other reserves 176 176 176
Share based payments 40 18 28
Retained earnings 3,346 2,205 4,497
---------- --------- --------
Group shareholders' equity 4 12,725 10,916 13,864
========== ========= ========
Consolidated cash flow statement
for the six months ended 31 December 2005 (unaudited)
Six months Six months Year ended
ended ended
31 December 31 December 30 June
2006 2005 2006
#'000 #'000 #'000
Net cash flow from
operating activities (3,834) (2,152) 2,200
Net cash flow from
investing activities (516) 67 (361)
Net cash flow from
financing activities (470) (517) (918)
--------- --------- --------
(Decrease)/ Increase in
cash in the period (4,820) (2,602) 921
========= ========= ========
Cash and cash equivalents
at 1 July 2006 20 (901) (901)
(Decrease)/Increase in
cash and cash equivalents (4,820) (2,602) 921
--------- --------- --------
Cash and cash equivalents
at 31 December 2006 (4,800) (3,503) 20
========= ========= ========
Cash flow from operating activities
Operating profit (1,227) (1,456) 779
Amortisation of
intangible assets 10 - 38
Depreciation 512 484 967
(Profit) on disposal of
fixed assets (5) (8) (7)
Share based payments 12 12 22
Movement in provisions (116) (108) -
Pension contributions paid less
amounts recognised in the
income statement. (95) 47 (139)
--------- --------- --------
Operating profit before changes in
working capital and provisions (909) (1,029) 1,660
(Increase)/decrease in stocks (3,913) (2,712) 583
(Increase)/decrease in debtors 6,574 6,747 (173)
(Decrease)/increase in creditors (5,598) (5,607) (278)
Movement in reinstatement
provision 12 - 24
Income taxes received - 449 384
--------- --------- --------
(3,834) (2,152) 2,200
========= ========= ========
Cash flow from investing activities
Interest received 2 5 29
Sale of property, plant
and equipment 5 1,004 1,012
Purchase of property,
plant and equipment (523) (942) (1,377)
Payments to acquire
intangible fixed assets - - (25)
--------- --------- --------
(516) 67 (361)
========= ========= ========
Cash flow from financing activities
Interest paid (79) (93) (327)
Dividends paid to equity
shareholders (331) (331) (496)
Dividend received from
joint venture - - 35
Repayment of borrowings (36) (45) (58)
Repayment of capital
element of finance leases (24) (48) (72)
--------- --------- --------
(470) (517) (918)
========= ========= ========
Reconciliation of net cash flow to movement in net debt
Six months Six months Year ended
ended ended
31 December 31 December 30 June
2006 2005 2006
#'000 #'000 #'000
(Decrease)/ increase in
cash in the period (4,820) (2,602) 921
Cash outflow from change
in debt 60 93 130
--------- --------- --------
Movement in net debt in
the period (4,760) (2,509) 1,051
Net debt at 1 July 2006 (855) (1,906) (1,906)
--------- --------- --------
Net debt at 31 December
2006 (5,615) (4,415) (855)
========= ========= ========
Notes to the Accounts
1. Taxation
The tax 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 2007 to
shareholders on the register on 10 April 2007.
3. Earnings per share
Basic earnings per share is calculated by dividing the net profit or loss for
the period attributable to ordinary equity holders of the Company by the
16,554,046 ordinary shares in issue during the year.
Diluted earnings per share is calculated by dividing the same net profit or loss
for the period but before deducting the cost of share based payments, by the
16,554,046 ordinary shares in issue during the year plus the weighted average
number of ordinary shares that would be issued under the Company's share option
schemes.
4. Reconciliation of movements in equity attributable to members of the
parent company
Six months Six months Year
ended
ended 31 December ended
31 December 2005 30 June
2006 2006
#'000 #'000 #'000
Opening equity attributable to members
of parent company 13,864 11,509 11,509
Total recognised income and expenses
for the period (820) (274) 2,829
Dividends paid (331) (331) (496)
Share based payments taken directly to
equity 12 12 22
---------- --------- ---------
Closing equity attributable to members
of the parent company 12,725 10,916 13,864
========== ========= =========
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 2006 and for all comparatives
shown.
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 2006 received an unqualified audit report
and have been filed with the Registrar of Companies.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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