RNS No 9603q
UNITED OVERSEAS GROUP PLC
15th September 1998
UNITED OVERSEAS GROUP plc
Interim Results for the 6 months ended 30 June 1998
Record pre-tax profits of #3.1m, up 15%; EPS and dividend up 13%;
non-executive board appointment; and
appointment of a new joint financial adviser and broker
United Overseas Group plc ("UOG"), Europe's largest distributor of excess
inventories of branded consumer products - toiletries, cosmetics, toys,
games, household goods and sporting goods - to retail and wholesale
customers, announces record Interim Results for the six months ended 30 June
1998. These were achieved against a background of extremely challenging
conditions, in both domestic and export markets.
Highlights from the Chairman's Statement and Results are as
follows:
* Turnover up 13% to #47.1m (1997: #41.5m) including 58% increase at UOG
AB.
* Average gross margin maintained at 26%.
* Pre-tax profits up 15% to #3.1m (1997: #2.6m).
* 13% increases in earnings per share - 1.58p (1997:1.39p) - and dividend
per share - 0.43p (1997: 0.38p).
* Acquisition of Intertrading Agencies Boersema Beheer BV successfully
completed on 2 September 1998; Eppe Boersema has been appointed to the
board with responsibility for the Group's business in Northern
Continental Europe.
* Appointment of Alex Watson as a non-executive director of UOG with
immediate effect.
As regards the Group's future outlook, Norman Riddell - Chairman - said:
"The second half of the year has traditionally been the period of strongest
sales and earnings for the Group. Whilst we believe trading conditions will
remain challenging, the continuing quality of our supplier and customer
partnerships enable us to feel confident that the Group's progress should
continue through the remainder of 1998."
UOG also announces the immediate appointment of BT Alex. Brown International,
a division of Bankers Trust International PLC, as joint financial adviser and
broker.
For further information, please contact:
United Overseas Group:
Norman Riddell, Chairman 0171 588 2990
Jeffrey Curtiss, chief executive 0171 786 9600 until noon
thereafter 01733 362300
Terry Balkham, finance director 0171 786 9600 until noon,
thereafter 01733 362300
BT Alex Brown International:
David Wilson 0171 885 2500
Marshall Securities Limited
Stephen Connolly/John McCready 0171 490 3788
Binns & Co. Public Relations Ltd
Peter Binns/Paul Vann 0171 786 9600
Chairman's Statement
It is with pleasure that I am reporting to you on the results of the Group for
the six month period to 30 June 1998. As the Group's Interim Results in 1997
covered only a trading period from 25 March to 30 June, proforma comparisons
for the period from 1 January are provided both for the half year and full
year.
Against a background of extremely challenging conditions, in both the export
market, due to the strength of Sterling and also the domestic market where
consumer sales have been constrained, the profit before tax for the six months
to 30 June 1998 was #3.1 million, an increase of 15% on a proforma basis over
the corresponding period in 1997. Sales in the period were #47.1 million,
which represented an increase of 13% on 1997. These results represent solid
performances from the Group companies where domestic business in the UK
developed encouragingly, although exports declined in the period.
Particularly noteworthy was the growth of our business in Scandinavia with UOG
AB acheiving a turnover increase of 58% over the same period in 1997. Also,
our relatively new business, European Stock Solutions, based in Leeds,
recorded very significant progress in its development.
The Board has declared a dividend of 0.43p per ordinary share for the six
months to 30 June 1998, which is payable on 26 October 1998 to shareholders on
the register on 2 October 1998.
The acquisition of Intertrading Agencies Boersema Beheer BV, which was
approved by the shareholders on 22 May, was successfully completed on 2
September and work on the construction of the first stage of the Group's
European Distribution Centre in Moerdijk, Netherlands is on schedule for
completion in the second quarter of 1999. We believe that these developments
represent a fundamental building block for the Group's future progress on the
European mainland in the years ahead.
I am pleased to announce two further appointments to the Board of your
Company. Mr Eppe Boersema has been appointed Managing Director, Northern
Continental Europe, and Mr Alex Watson as a Non-Executive Director. Both
bring infinite wisdom to United Overseas and I am delighted to welcome them to
the Group.
The second half of the year has traditionally been the period of strongest
sales and earnings for the Group. Whilst we believe trading conditions will
remain challenging, the continuing quality of our supplier and customer
partnerships enable us to feel confident that the Group's progress should
continue through the remainder of 1998.
Norman M M Riddell
Chairman
14 September 1998
Consolidated Profit and Loss Account
Actual Proforma Proforma Actual Actual
6 months 6 months 12 months 03/03/97 03/03/97
ended ended ended to to
30/06/98 30/06/97 31/12/97 30/06/97 31/12/97
(unaudited) (unaudited) (unaudited) (unaudited) (audited)
Notes #000 #000 #000 #000 #000
Turnover 47,058 41,512 90,978 20,905 70,371
Cost of
sales (34,802) (30,760) (66,403) (15,487) (51,132)
------ ------ ------ ------ ------
Gross
profit 12,256 10,752 24,575 5,418 19,239
Distribution
costs (2,080) (1,798) (4,005) (974) (3,182)
Administrative
costs (6,187) (5,715) (10,688) (2,823) (7,796)
Other
operating
income 4 5 4 5 4
------ ------ ------ ------ ------
Operating
profit 3,993 3,244 9,886 1,626 8,265
Net
interest
payable (942) (595) (1,450) (282) (1,137)
------ ------ ------ ------ ------
Profit on
ordinary
activities
before
taxation 3,051 2,649 8,436 1,344 7,128
Taxation 2 (1,005) (943) (2,902) (478) (2,437)
------ ------ ------ ------ ------
Profit on
ordinary
activities
after
taxation 2,046 1,706 5,534 866 4,691
Minority
interests (84) (328) (569) (156) (389)
------ ------ ------ ------ ------
Profit
attributable
to
shareholders 1,962 1,378 4,965 710 4,302
Dividends (533) (453) (1,396) (453) (1,396)
------ ------ ------ ------ ------
Retained
profit for
the period 1,429 925 3,569 257 2,906
------ ------ ------ ------ ------
Earnings 3
per share 1.58p 1.39p 4.51p 0.76p 3.91p
------ ------ ------ ------ ------
Dividends 5
per share 0.43p 0.38p 1.14p 0.38p 1.14p
------ ------ ------ ------ ------
Consolidated Balance Sheet
At 30/06/98 At 30/06/97 At 31/12/97
(unaudited) (unaudited) (audited)
Notes #000 #000 #000
Fixed assets
Intangible assets 90 81 75
Tangible assets 2,167 1,315 1,675
Investments - 10 -
------ ------ ------
2,257 1,406 1,750
------ ------ ------
Current assets
Stocks 40,301 30,589 36,989
Debtors 25,317 17,063 20,787
Cash at bank and in hand 978 2,044 3,040
------ ------ ------
66,596 49,696 60,816
Creditors: amounts falling
due within one year (41,418) (27,997) (36,703)
------ ------ ------
Net current assets 25,178 21,699 24,113
------ ------ ------
Total assets less current 27,435 23,105 25,863
liabilities
Creditors: amounts falling due
after more than one year (357) (194) (226)
------ ------ ------
Net assets 27,078 22,911 25,637
------ ------ ------
Capital and reserves
Called up share capital 12,403 11,931 12,403
Share premium account 45,763 45,898 45,763
Goodwill write off reserve - (36,170) (36,477)
Share capital to be issued 1,000 - 1,000
Profit and loss account 4 (32,257) 238 2,863
------ ------ ------
Equity shareholders' funds 26,909 21,897 25,552
Equity minority interests 169 1,014 85
------ ------ ------
27,078 22,911 25,637
------ ------ ------
Consolidated Cash Flow Statement
Actual Proforma Proforma Actual Actual
6 months 6 months 12 months 03/03/97 03/03/97
ended ended ended to to
30/06/98 30/06/97 31/12/97 30/06/97 31/12/97
(unaudited) (unaudited) (unaudited) (unaudited) (audited)
#000 #000 #000 #000 #000
Net cash
outflow
from operating
activities (8,634) (12,725) (5,683) (8,686) (1,898)
------ ------ ------ ------ ------
Returns on
investments and
servicing of
finance
Interest
received 18 25 46 16 37
Interest paid
and similar
charges (936) (608) (1,468) (546) (1,152)
Interest
element
of hire
purchase and
finance leases (22) (12) (27) (6) (21)
------ ------ ------ ------ ------
Net cash
outflow from
returns on
investments and
servicing of
finance (940) (595) (1,449) (536) (1,136)
------ ------ ------ ------ ------
Taxation
UK corporation
tax paid (1,080) (785) (3,004) (493) (2,712)
Overseas
taxation paid (445) (225) (355) (139) (269)
------ ------ ------ ------ ------
Net cash
outflow from
taxation (1,525) (1,010) (3,359) (632) (2,981)
------ ------ ------ ------ ------
Capital
expenditure
and financial
investment
Purchase of
intangible
fixed assets (23) - - - -
Purchase of
tangible
fixed assets (176) (366) (727) (341) (702)
Sale of
tangible
fixed assets 8 18 100 14 96
------ ------ ------ ------ ------
Net cash
outflow
from capital
expenditure and
financial
investment (191) (348) (627) (327) (606)
------ ------ ------ ------ ------
Acquisitions
and disposals
Purchase of
subsidiary
undertakings - (100) (100) (100) (100)
Net cash
acquired with
subsidiary
undertakings - - - (12,718) (12,718)
------ ------ ------ ------ ------
Net cash
outflow
from acquisitions
and disposals - (100) (100) (12,818) (12,818)
------ ------ ------ ------ ------
Equity
dividends paid (943) (6,000) (6,453) - (453)
------ ------ ------ ------ ------
Cash outflow
before use of
liquid
resources
and financing (12,233) (20,778) (17,671) (22,999) (19,892)
------ ------ ------ ------ ------
Financing
Issue of
share capital - 18,000 18,000 18,000 18,000
Expenses paid
in connection
with share
issues - (822) (957) (822) (957)
Capital element
of finance
lease rentals (264) - (284) - -
New short
term finance - 6,000 6,000 - -
Loans repaid
- (10,095) (10,000) (10,048) (10,237)
------ ------ ------ ------ ------
Net cash
(outflow)/inflow
from financing (264) 13,083 12,759 7,130 6,806
------ ------ ------ ------ ------
Decrease in
cash in
the period (12,497) (7,695) (4,912) (15,869) (13,086)
------ ------ ------ ------ ------
Notes:
1. Nature of financial information
The company prepares statutory accounts annually to 31 December. These are
the interim accounts covering the six months ended 30 June 1998.
The proforma comparative results for the six months ended 30 June 1997 and for
the twelve months ended 31 December 1997 have been prepared using the
unaudited management accounts of the company's subsidiaries excluding the
demerged activities of the former group and after making such adjustments as
considered necessary. The company was incorporated on 3 March 1997. The
actual results for the period 3 March 1997 to 30 June 1997 and 3 March 1997 to
31 December 1997 are extracted from the previous year's interim and final
accounts respectively.
The proforma comparative results for the six months ended 30 June 1997 and the
twelve months ended 31 December 1997, and the actual results for the period 3
March 1997 to 30 June 1997 and the six months ended 30 June 1998, are
unaudited. The interim accounts have been prepared in accordance with the
accounting policies set out in the company's annual report for the period
ended 31 December 1997.
The financial information set out above does not constitute statutory accounts
within the meaning of Section 240 of the Companies Act 1985. The results for
the period 3 March 1997 to 31 December 1997 are an abridged version of the
full statutory accounts which carry an unqualified audit report and have been
delivered to the Registrar of Companies.
2. Taxation
The taxation charge on the profit on ordinary activities for the six months
ended 30 June 1998, 30 June 1997 and the period 3 March 1997 to 30 June 1997,
is based on the anticipated tax position for the full year.
3. Earnings per share
Earnings per share for the six months ended 30 June 1998 are calculated on the
basis of the profit on ordinary activities after taxation and minority
interests of #1,962,000 divided by 124,032,000, being the weighted average
number of ordinary shares of 10 pence each in issue during the period.
Proforma earnings per share for the six months ended 30 June 1997 and the
twelve months ended 31 December 1997 are based on a weighted average number of
ordinary shares of 10 pence each in issue of 98,867,260 and 110,027,131
respectively. These weighted average number of ordinary shares are calculated
on the assumption that the 80,799,980 ordinary shares issued in connection
with the admission of the shares to the Official List of the London Stock
Exchange Limited had been in issue throughout the periods, adjusted to reflect
issues made by the company during those periods.
Earnings per share for the period 3 March 1997 to 30 June 1997 and the period
3 March 1997 to 31 December 1997 are based on the weighted average number of
ordinary shares of 10 pence each in issue during the period of 93,238,137 and
110,044,423 respectively.
4. Profit and loss account
In accordance with Financial Reporting Standard 10 Goodwill and Intangible
Assets, goodwill which has arisen from previous acquisitions (separately shown
as a Goodwill Write Off Reserve in the annual report) has been transferred to
the profit and loss account. Goodwill arising on any acquisition after 1
January 1998 will be capitalised and amortised through the profit and loss
account over the Directors' estimate of its useful economic life.
Profit Goodwill
retained on
on ordinary consolidation Total
activities
#000 #000 #000
Balance at 1 January 1998 2,863 - 2,863
Profit on ordinary activities
retained for six months
ended 30 June 1998 1,429 - 1,429
Foreign exchange loss (72) - (72)
Goodwill transferred to profit and
loss account, as prescribed by FRS 10 - (36,477) (36,477)
------ ------ ------
Balance at 30 June 1998 4,220 (36,477) (32,257)
------ ------ ------
5. Dividends
An interim dividend of 0.43 pence per ordinary share (1997 interim dividend of
0.38 pence per ordinary share), based on the results for the six months to 30
June 1998, is payable on 26 October 1998 to shareholders on the register on 2
October 1998.
6. Year 2000
The Group is in the final assessment and operational planning stage of the
review of its systems compliance with year 2000 issues. All costs incurred
where systems are enhanced will be capitalised, whereas all other costs will
be charged through the profit and loss account in accordance with generally
accepted accounting practice.
7. Interim report
Copies of the interim report are being dispatched to shareholders today.
Copies are also available from the Company's registered office, United House,
Shrewsbury Avenue, Woodston, Peterborough, Cambridgeshire, PE2 7BZ.
END
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