TIDMCPL
RNS Number : 7077T
Chapelthorpe PLC
11 June 2009
CHAPELTHORPE PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MARCH 2009
Chapelthorpe plc, a manufacturer of polypropylene fibre supplied to markets
worldwide, today announces its preliminary results.
Highlights
* Businesses have shown considerable resilience in difficult trading conditions.
* Adverse market demand in the US, particularly in the Automotive Sector, with
staple fibre volumes down 33%, offset in part by cost reductions and new
business in the filament yarn sector.
* European fibre margin initiatives and cost reductions offset an 8% volume
reduction.
* Fall in raw material costs in latter part of the year provides some relief on
margins and working capital levels.
* Sale of 60% stake in Specialist Coatings for GBP5.6m (GBP5.3m net).
* Year end debt reduced to GBP6.7m from GBP8.4m.
Chairman, Leslie Goodman, commented:
"In extremely challenging trading conditions and difficult credit markets, I am
pleased to be able to report that our businesses have shown considerable
resilience.
We have been able to mitigate many of the adverse factors impacting
profitability and also reduce the Group's level of debt."
For further information please contact:
Leslie Goodman, Chairman 0113 285 9020
Ian Powell, Chief Executive 0113 285 9020
Andrew Emmott, Brewin Dolphin Limited 0845 213 4730
Chairman's Statement
Introduction
In extremely challenging trading conditions and difficult credit markets, I am
pleased to be able to report that our businesses have shown considerable
resilience. This can be attributed to the work we have carried out over the last
two years to make the Group more efficient, to the benefits we released through
the sale of a 60% shareholding in our Specialist Coatings business, and not
least to the skill and commitment of our management and staff. As a consequence
we have been able to mitigate many of the adverse factors impacting
profitability and also reduce the Group's level of debt, leaving the Group
better positioned to cope with the current economic climate.
Results for the year
Continuing operations
On sales of GBP86.2m (2008: GBP87.4m) pre-exceptional earnings before interest,
tax, depreciation and amortisation ("EBITDA"), totalled GBP2.8m (2008: GBP3.1m).
Pre-exceptional operating losses were GBP0.1m (2008: GBP0.4m profit).
Net exceptional costs of GBP1.6m include GBP1.2m of additional provisions made
in respect of vacant leasehold premises, in particular the premises which were
previously sold with the Umbrella business, but reverted to us when that
business went into Administration, are proving hard to sub lease.
After exceptional items, an operating loss of GBP1.7m (2008: GBP0.8m) resulted.
The underlying loss (before exceptionals and discontinued operations) per share
was 5.80p (2008: 2.01p). After exceptional items the basic loss per share on
continuing operations was 13.61p (2008: 7.41p).
Trading conditions in the markets served by our fibres businesses have followed
the pattern that I had previously outlined in our interim report, with a
deepening global recession and volatile raw material prices exerting pressure on
demand and margins.
In particular, major cutbacks in demand from the US automotive and consumer
sectors have had a significant impact on the Group's underlying performance. We
had already taken decisive action to cut excess manned staple fibre capacity in
our US plant to minimise the effect of this fall in demand. We have also had
notable success in securing new business in the filament yarn sector to help
offset these losses.
The European fibres market was also extremely challenging, however we were able
to keep costs tight and maintain profitability, assisted in the UK to some
degree by the weakness of Sterling.
Discontinued operations
The sale of a 60% shareholding in Speciality Coatings (Darwen) Limited ("SCD")
to Lins Trading Limited ("Lins") and Paul Phillips, the Managing Director of
SCD, was completed for a total cash consideration of GBP5.6m, being GBP1.6m for
the shares and, in addition, a GBP4m repayment of inter-company loans from SCD.
The Group has provided a guarantee of up to GBP1.5m in favour of SCD's funders
which can only be called upon in certain limited circumstances. This guarantee
is reducing on a quarterly basis in amounts of GBP250,000 over the period ending
1 January 2010. At 31 March 2009 the guarantee amounted to GBP1.0m.
Although SCD had made a significant contribution to profits in 2008, the expiry
of the royalty agreement with Lins in September 2008 relating to the Russian
market and the markedly worsening climate for home improvements in the UK and
Western Europe had a material impact on SCD's underlying profitability with a
resultant fall in profitability in 2009.
The transaction with Lins, which has considerable experience of Eastern Europe,
enables Chapelthorpe to continue to participate in SCD's business through its
40% shareholding without the requirement to finance the significant investment
which would otherwise be required to maintain and grow the business in Eastern
Europe.
Cash flow and borrowings
Net borrowings decreased to GBP6.7m (2008: GBP8.4m). The decrease was mitigated
by a GBP3.5m adverse impact of exchange rate movements on non-Sterling
denominated borrowings.
Our capital expenditure requirements remain modest and amounted to GBP0.2m
(2008: GBP0.3m), amounting to approximately 7.5% of depreciation (2008: 8.2%).
This low investment need, together with the fall in working capital levels
following the reduction in the price of raw materials, should help underpin the
generation of good cash flows from operations in the immediate future. However,
net borrowings still represent 2.4 times pre-exceptional EBITDA (2008: 2.8
times) and it remains a priority to reduce our debt further.
Group pension scheme
In September 2008, the UK defined benefit pension fund was closed to future
accrual for the remaining 83 active members. The Company continues to pay
contributions (currently GBP120,000 per annum) in accordance with the Schedule
of Contributions agreed with the Trustees. Additionally, the Company is
responsible for the running costs of the Fund.
The IAS 19 valuation of the UK pension fund resulted in a deficit of GBP2.2m at
31 March 2009 (2008: surplus of GBP1.6m - not recognised), principally due to
falling investment values.
Dividends
The Board has decided it is inappropriate to declare a dividend for this
financial year (2008: GBPNil).
Prospects and current trading
The fall in the price of polypropylene polymer towards the end of the 2008
calendar year was a welcome development alleviating some of the pressure on
margins. These price falls have resulted and should continue to result in a fall
in sales values and working capital levels as the average selling price per
tonne falls in line with the lower raw material costs.
New production polymer capacity in the Middle East is beginning to come on
stream which, subject to some stability in oil prices, should keep price levels
lower than they might otherwise be.
Nevertheless, many of the sectors which we supply are being impacted by reduced
demand and we expect volumes to be lower in the first half of the next year than
the previous year. Further cutbacks in US automotive demand and both General
Motors and Chrysler recently seeking bankruptcy protection has created
additional uncertainty for our US business. As already indicated, we have
already taken action to reduce capacity and we have a much leaner operation able
to cope with short-term fluctuations in demand.
The current year has started broadly in line with our expectations. The fall in
the Sterling exchange rate has made imports of fibre to the UK less attractive
and consequently improved the competitiveness of our UK operations exposed to
such imports.
Without doubt this year will be a challenging one and we approach it with
caution given the uncertain effect of the current economic downturn on our
customers and on the markets they serve.
Looking to the longer term, the Board continues to examine ways to deliver
improved returns to shareholders and other stakeholders.
We also remain alert to opportunities which markets may generate as other
businesses in weaker financial positions seek solutions to their problems.
I would like to conclude by thanking all our management and staff for their
commitment through the year. Though the Stock Market is not at present looking
favourably on businesses of our size and type (as reflected by the share price)
we continue to believe in our potential to generate value for shareholders and
that our efforts will in due course be recognised by the market.
Leslie Goodman
Chairman
11 June 2009
Operating Review
The Group's core business is fibres, operating from sites in the UK, Austria and
the US. Fibres supplies polypropylene fibres to markets which include floor
coverings, automotive, geotextiles, technical and home furnishings.
The Specialist Coatings joint venture supplies vinyl coated paper and plastisols
to the wallcoverings industry worldwide.
Overview
In unstable current markets, the primary objective for the year was to protect
operating margins through a combination of reducing the operational cost base,
improving mix and controlling pricing. As a result, pre-exceptional EBITDA from
continuing operations of GBP2.8m (2008: GBP3.1m) generated from reduced sales of
GBP86.2m (2008: GBP87.4m), revealed only a modest reduction in margin from 3.5%
to 3.3% against a background of a reduction in volumes of 16%.
Operating loss before exceptionals was GBP0.1m (2008: GBP0.4m profit).
US Fibres
Sales for the period were GBP32.5m (2008: GBP34.8m), generating a
pre-exceptional EBITDA of GBP1.4m (2008: GBP1.8m).
Pre-exceptional operating loss for the period was GBP0.7m (2008: profit of
GBP0.1m).
The US fibres business experienced a very difficult year with a downturn in
demand from its primary automotive and needlepunch sectors, with volumes down
37% and 25% respectively. Overall staple fibre sales fell by 33% year on year.
Capacity has been reduced by nearly 40% and fixed costs have been cut by
approximately $1m compared to last year.
There is little evidence to suggest that volumes will recover in the short term
and the recent moves by General Motors and Chrysler to seek bankruptcy
protection are leading to further cut backs and uncertainty with regard to
demand.
In contrast, filament yarn sales increased by 44% year on year following new
gains in market share, predominantly in the bedding sector. This resulted in the
installation of additional machine capacity transferred from the UK. Demand for
filament yarn continues to be strong following the closure of a major competitor
and the US business is seeking to support its key customers in this area by
introducing additional capacity during this financial year.
European Fibres
Sales for the year were GBP53.7m (2008: GBP52.6m), generating pre-exceptional
EBITDA of GBP2.1m (2008: GBP2.1m).
Pre-exceptional operating profit was GBP1.2m (2008: GBP1.2m).
Volumes in both our UK and Austrian operations were ahead of last year in the
first six months but demand slowed considerably during the second half and
overall volumes were 8% down year on year.
Volumes sold predominantly into the flooring sector in the UK were good,
assisted by the weakness of Sterling against the Euro making imports of fibre
from Continental Europe less attractive. The Austrian business delivered a
robust performance, improving mix and margins. However, margins and volumes
remain under constant pressure due to the over capacity in the marketplace.
As part of our strategy to mitigate this, solid progress has also been made in
growing sales in niche technical areas to ensure we supply as many sectors of
the market as we can.
Raw Materials
The price of polypropylene continued to have a major influence on profitability
during the year. During the first half it continued to rise and reached a record
price in August before falling heavily during the final quarter of the calendar
year due to the fall in oil prices and economic downturn.
The price fell by over a third in the space of four weeks in the US and this
inevitably created significant compression on margins on inventories made with
higher priced polypropylene.
The European prices followed a similar pattern, although the price fall was not
so marked in the final calendar quarter.
The outlook for prices in this current year should see an average price much
reduced from last year due to lower oil prices and lower demand as a result of
the economic downturn. In addition, new Middle Eastern polymer capacity coming
on stream should further assist in keeping European market prices under control.
However, notwithstanding these developments, recent oil price rises have
increased pressure on raw material prices.
Specialist Coatings
Specialist Coatings contributed GBP0.8m operating profit in the period to 31
October 2008.
From 1 November 2008 our share of joint venture losses was GBP0.1m.
Specialist Coatings performance has been impacted by the fall in demand in
Western European markets whose recovery last year helped deliver a significant
increase in profitability. Plans are underway to establish a manufacturing
operation within Russia and the initial stage of this should be operational
during this current financial year.
Summary
The steps we have taken have enabled the businesses to exhibit a strong degree
of resilience in most sectors. Trading performance to date is in line with
expectations but, given the weakness in the US automotive sector, we have to
remain cautious in our outlook and remain prepared to take positive action to
reduce our capacity and cost base as necessary.
Ian Powell
Chief Executive
11 June 2009
Financial Review
Results
The consolidated financial statements for the Group are prepared in accordance
with International Financial Reporting Standards ("IFRS").
The Group disposed of a 60% stake in its Specialist Coatings business,
Speciality Coatings (Darwen) Limited ("SCD") on 30 October 2008 and disposed of
its Umbrella Frames business, Hoyland Fox Limited ("Hoyland Fox"), on 13 June
2007 in the previous financial year. Consequently the financial statements
identify the results of both of these businesses as discontinued operations.
From 31 October 2008 the remaining 40% investment in SCD has been accounted for
as a joint venture.
Continuing operations
Revenue
Sales volumes fell by 16% year on year. However, revenues from continuing
operations fell only marginally from GBP87.4m to GBP86.2m due to the impact of
translation differences.
Operating profit
An operating loss of GBP1.7m was incurred compared to GBP0.8m the previous year.
The operating loss before exceptional items was GBP0.1m compared to a profit of
GBP0.4m in 2008.
The fall in underlying profitability is principally due to the weakness in
demand in the US fibres business, particularly in the automotive sector, and the
impact of a rapid fall in polypropylene prices on margins in respect of sales of
inventories made with higher priced raw material.
We have continued to monitor and control our costs tightly across all our
operations including the closure of our Head Office and its relocation to one of
our UK fibre sites.
Exceptionals
Exceptional costs of GBP1.6m (2008: GBP1.2m) principally relate to increased
provision for vacant leasehold premises. Tenants are being sought for all
premises but in light of the worsening commercial property market and the
failure of the guarantor of the premises formerly occupied by Hoyland Fox,
additional provisions have been considered necessary.
Discontinued operations
The Group sold a 60% stake in SCD to Lins Trading Limited and Paul Phillips, the
current Managing Director of SCD, for a total cash consideration of GBP5.6m,
being GBP1.6m for shares and, in addition, a GBP4.0m repayment of inter-company
loans.
The Group provided a guarantee of GBP1.5m in respect of SCD's borrowings which
can only be called upon in specific limited circumstances. This guarantee
reduces on a quarterly basis in amounts over the period ending 1 January 2010.
At 31 March 2009 the guarantee amounted to GBP1.0m.
During the year the Group has received the remaining deferred consideration of
GBP163,000 due from the sale of Hoyland Fox from the Administration of this
business.
Cash flow and borrowings
Cash generated from continuing operations improved to GBP3.2m from GBP2.4m,
mainly due to the absence of exceptional costs, this was offset by a GBP1.8m
outflow from discontinued operations, primarily as a result of a higher working
capital level at time of sale compared to year end.
Capital expenditure was GBP0.24m (2008: GBP0.26m) and amounts to only 7.5%
(2008: 8.2%) of depreciation. Financing costs of GBP1.8m (2008: GBP1.4m)
included net bank interest payable of GBP1.0m (2008: GBP1.0m) which equated to
an effective interest rate of 8.4% (2008: 7.1%) on average borrowings of
GBP11.9m (2008: GBP14.0m). The effective rate has been impacted by the holding
of the proceeds from the sale of SCD on UK cash deposit which has attracted
comparatively low rates of interest.
Overall, year end debt fell from GBP8.4m to GBP6.7m but included an adverse
exchange movement on translation of overseas borrowings of GBP3.5m.
At 31 March 2009 the Group had committed facilities of GBP21.2m (2008: GBP24.6m)
together with overdraft facilities of GBP1.8m (2008: GBP2.3m), giving a total of
GBP23.0m (2008: GBP26.9m) of which GBP17.3m was utilised (2008: GBP15.5m).
Pension fund
The Group's principal UK pension scheme was closed to future accrual in
September 2008 and has 1,777 members of whom 1,063 are pensioners.
The valuation of the scheme in accordance with IAS 19 resulted in a deficit of
GBP2.2m (2008: surplus GBP1.6m - not recognised). This deficit has arisen
principally due to the fall in investment values.
As a consequence of adopting IFRIC 14 "IAS 19 The Limit on a Defined Benefit
Asset" from 1 April 2008, the surplus of GBP1.6m at 31 March 2008 has now not
been recognised and the net assets as at that date have been restated
accordingly.
In addition, the Group has GBP1.8m (2008: GBP1.7m) of leaving indemnities in its
Austrian business.
Management and financial risk
Group policy on treasury and financial risk is set by the Board. Treasury policy
is set to ensure that funding requirements minimise commercial risk and are
adequate to support the ongoing requirements of the operations.
No transactions of a speculative nature are permitted. The day to day treasury
management is controlled centrally with the main risks arising from operations
being liquidity risk, interest rate risk and credit risk.
Key performance indicators
The key performance indicators ("KPIs") for the Group are those that communicate
the financial performance and strength of the Group, as a whole, to
shareholders. In addition, other key non-financial performance indicators are
also used by management in running and assessing the performance of the
individual businesses within the Group.
A summary of the KPIs is as follows:
+----------------------------------------------------------------------+-------------+-------------+
| 2008/9 | 2007/8 |
+------------------------------------------------------------------------------------+-------------+
| Financial |
+--------------------------------------------------------------------------------------------------+
| Free cash flow | GBP5.1m | GBP5.6m |
+----------------------------------------------------------------------+-------------+-------------+
| Pre-exceptional EBITDA | GBP2.8m | GBP3.1m |
+----------------------------------------------------------------------+-------------+-------------+
| Net bank borrowings | GBP6.7m | GBP8.4m |
+----------------------------------------------------------------------+-------------+-------------+
| Non-financial |
+--------------------------------------------------------------------------------------------------+
| Health and safety - major accidents reportable |
+--------------------------------------------------------------------------------------------------+
| to the main Board in the year | -- | 1 |
+----------------------------------------------------------------------+-------------+-------------+
| Production efficiency levels (waste as a % of total production) | 5.5% | 5.5% |
+----------------------------------------------------------------------+-------------+-------------+
Andrew Weatherstone
Finance Director
11 June 2009
Consolidated Income Statement
year ended 31 March 2009
+----------------------------------------------------------+------------+-------------+-------------+
| | (As restated) |
+-----------------------------------------------------------------------+---------------------------+
| | 2009 | 2008 |
+-----------------------------------------------------------------------+-------------+-------------+
| | GBP000 | GBP000 |
+-----------------------------------------------------------------------+-------------+-------------+
| Continuing operations |
+---------------------------------------------------------------------------------------------------+
| Revenue | | 86,214 | 87,394 |
+----------------------------------------------------------+------------+-------------+-------------+
| Cost of sales | (77,464) | (78,252) |
+-----------------------------------------------------------------------+-------------+-------------+
| Gross profit | 8,750 | 9,142 |
+-----------------------------------------------------------------------+-------------+-------------+
| Operating expenses | | (10,477) | (9,979) |
+----------------------------------------------------------+------------+-------------+-------------+
| Operating loss |
+---------------------------------------------------------------------------------------------------+
| Operating (loss) profit before exceptional items | (124) | 352 |
+-----------------------------------------------------------------------+-------------+-------------+
| Exceptional items | | (1,603) | (1,189) |
+----------------------------------------------------------+------------+-------------+-------------+
| Operating loss | | (1,727) | (837) |
+----------------------------------------------------------+------------+-------------+-------------+
| Financial expense | (1,772) | (1,415) |
+-----------------------------------------------------------------------+-------------+-------------+
| Financial income | 241 | 521 |
+-----------------------------------------------------------------------+-------------+-------------+
| Net financing costs | | (1,531) | (894) |
+----------------------------------------------------------+------------+-------------+-------------+
| Share of losses of joint venture | | (70) | -- |
+----------------------------------------------------------+------------+-------------+-------------+
| Loss before taxation | | (3,328) | (1,731) |
+----------------------------------------------------------+------------+-------------+-------------+
| Taxation | | 582 | 241 |
+----------------------------------------------------------+------------+-------------+-------------+
| Loss for the period from continuing operations | (2,746) | (1,490) |
+-----------------------------------------------------------------------+-------------+-------------+
| Profit from discontinued operations | | 731 | 1,078 |
+----------------------------------------------------------+------------+-------------+-------------+
| Loss for the period attributable to equity shareholders | | (2,015) | (412) |
+----------------------------------------------------------+------------+-------------+-------------+
| Loss per share |
+---------------------------------------------------------------------------------------------------+
| Basic and diluted | | (9.99)p | (2.05)p |
+----------------------------------------------------------+------------+-------------+-------------+
Consolidated Statement of Recognised Income and Expense
year ended 31 March 2009
+-----------------------------------------------------------+-----------+-------------+-------------+
| | (As restated) |
+-----------------------------------------------------------------------+---------------------------+
| | 2009 | 2008 |
+-----------------------------------------------------------------------+-------------+-------------+
| | GBP000 | GBP000 |
+-----------------------------------------------------------------------+-------------+-------------+
| Actuarial (losses) gains on defined benefit schemes (net of deferred | (1,819) | 2,605 |
| tax) | | |
+-----------------------------------------------------------------------+-------------+-------------+
| Exchange differences on translation of foreign operations | | 2,842 | 60 |
+-----------------------------------------------------------+-----------+-------------+-------------+
| Loss in fair value of hedging derivatives | | (78) | (284) |
+-----------------------------------------------------------+-----------+-------------+-------------+
| Net income recognised directly in equity | 945 | 2,381 |
+-----------------------------------------------------------------------+-------------+-------------+
| Loss for the period | (2,015) | (412) |
+-----------------------------------------------------------------------+-------------+-------------+
| Total recognised income and expense for the period (attributable to | (1,070) | 1,969 |
+-----------------------------------------------------------------------+-------------+-------------+
| equity shareholders) |
+-----------------------------------------------------------+-----------+-------------+-------------+
Consolidated Balance Sheet
31 March 2009
+-----------------------------------------------------------+-----------+-------------+-------------+
| | (As restated) |
+-----------------------------------------------------------------------+---------------------------+
| | 2009 | 2008 |
+-----------------------------------------------------------------------+-------------+-------------+
| | GBP000 | GBP000 |
+-----------------------------------------------------------------------+-------------+-------------+
| Non-current assets |
+---------------------------------------------------------------------------------------------------+
| Property, plant and equipment | | 24,358 | 23,005 |
+-----------------------------------------------------------+-----------+-------------+-------------+
| Investments - joint ventures | | 656 | -- |
+-----------------------------------------------------------+-----------+-------------+-------------+
| Other non-current assets | | 668 | 577 |
+-----------------------------------------------------------+-----------+-------------+-------------+
| | | 25,682 | 23,582 |
+-----------------------------------------------------------+-----------+-------------+-------------+
| Current assets |
+---------------------------------------------------------------------------------------------------+
| Inventories | | 6,949 | 8,803 |
+-----------------------------------------------------------+-----------+-------------+-------------+
| Trade and other receivables | | 11,975 | 19,304 |
+-----------------------------------------------------------+-----------+-------------+-------------+
| Current tax assets | 357 | -- |
+-----------------------------------------------------------------------+-------------+-------------+
| Other financial assets | | 1 | 4 |
+-----------------------------------------------------------+-----------+-------------+-------------+
| Cash and cash equivalents | 10,611 | 7,058 |
+-----------------------------------------------------------------------+-------------+-------------+
| | 29,893 | 35,169 |
+-----------------------------------------------------------------------+-------------+-------------+
| Current liabilities |
+---------------------------------------------------------------------------------------------------+
| Trade and other payables | | (9,674) | (17,867) |
+-----------------------------------------------------------+-----------+-------------+-------------+
| Current tax liabilities | (294) | (471) |
+-----------------------------------------------------------------------+-------------+-------------+
| Other financial liabilities | | (295) | (197) |
+-----------------------------------------------------------+-----------+-------------+-------------+
| Borrowings and bank overdrafts | | (7,056) | (6,550) |
+-----------------------------------------------------------+-----------+-------------+-------------+
| | | (17,319) | (25,085) |
+-----------------------------------------------------------+-----------+-------------+-------------+
| Net current assets | 12,574 | 10,084 |
+-----------------------------------------------------------------------+-------------+-------------+
| Non-current liabilities |
+---------------------------------------------------------------------------------------------------+
| Retirement benefit obligations | | (4,045) | (1,708) |
+-----------------------------------------------------------+-----------+-------------+-------------+
| Other financial liabilities | | (859) | (933) |
+-----------------------------------------------------------+-----------+-------------+-------------+
| Borrowings | | (10,249) | (8,928) |
+-----------------------------------------------------------+-----------+-------------+-------------+
| Provisions and other liabilities | | (2,254) | (1,563) |
+-----------------------------------------------------------+-----------+-------------+-------------+
| Deferred tax liabilities | | (5,024) | (3,649) |
+-----------------------------------------------------------+-----------+-------------+-------------+
| | | (22,431) | (16,781) |
+-----------------------------------------------------------+-----------+-------------+-------------+
| Net assets | 15,825 | 16,885 |
+-----------------------------------------------------------------------+-------------+-------------+
| Shareholders' equity |
+---------------------------------------------------------------------------------------------------+
| Called up share capital | | 10,202 | 10,202 |
+-----------------------------------------------------------+-----------+-------------+-------------+
| Share premium reserve | | 1,251 | 1,251 |
+-----------------------------------------------------------+-----------+-------------+-------------+
| Other reserves | | 1,874 | (890) |
+-----------------------------------------------------------+-----------+-------------+-------------+
| Retained earnings | | 2,498 | 6,322 |
+-----------------------------------------------------------+-----------+-------------+-------------+
| Total shareholders' funds | 15,825 | 16,885 |
+-----------------------------------------------------------+-----------+-------------+-------------+
Consolidated Cash Flow Statement
year ended 31 March 2009
+----------------------------------------------------------+------------+-------------+-------------+
| | 2009 | 2008 |
+-----------------------------------------------------------------------+-------------+-------------+
| | | GBP000 |
| | GBP000 | |
+-----------------------------------------------------------------------+-------------+-------------+
| Cash flows from operating activities |
+---------------------------------------------------------------------------------------------------+
| Cash generated from operations | | 1,313 | 5,951 |
+----------------------------------------------------------+------------+-------------+-------------+
| Tax paid | (205) | (105) |
+-----------------------------------------------------------------------+-------------+-------------+
| Interest received | 91 | 112 |
+-----------------------------------------------------------------------+-------------+-------------+
| Interest paid | (1,037) | (1,145) |
+-----------------------------------------------------------------------+-------------+-------------+
| Net cash generated from operating activities | 162 | 4,813 |
+-----------------------------------------------------------------------+-------------+-------------+
| Cash flows from investing activities |
+---------------------------------------------------------------------------------------------------+
| Purchases of property, plant and equipment | (241) | (255) |
+-----------------------------------------------------------------------+-------------+-------------+
| Proceeds from sale of property, plant and equipment | 5 | 46 |
+-----------------------------------------------------------------------+-------------+-------------+
| Proceeds from sale of business | 5,199 | 1,011 |
+-----------------------------------------------------------------------+-------------+-------------+
| Net cash generated from investing activities | 4,963 | 802 |
+-----------------------------------------------------------------------+-------------+-------------+
| Cash flows from financing activities |
+---------------------------------------------------------------------------------------------------+
| Net proceeds from new bank loans | 439 | 7,773 |
+-----------------------------------------------------------------------+-------------+-------------+
| Repayment of borrowings | (1,422) | (7,253) |
+-----------------------------------------------------------------------+-------------+-------------+
| Repayment of capital element of finance leases | -- | (63) |
+-----------------------------------------------------------------------+-------------+-------------+
| Net cash (used in) generated from financing activities | (983) | 457 |
+-----------------------------------------------------------------------+-------------+-------------+
| Increase in cash and cash equivalents | 4,142 | 6,072 |
+-----------------------------------------------------------------------+-------------+-------------+
| Cash and cash equivalents at beginning of the period | 1,657 | (3,518) |
+-----------------------------------------------------------------------+-------------+-------------+
| Exchange losses on cash and cash equivalents | (842) | (897) |
+-----------------------------------------------------------------------+-------------+-------------+
| Cash and cash equivalents at end of the period | | 4,957 | 1,657 |
+----------------------------------------------------------+------------+-------------+-------------+
Segmental reporting
Primary reporting format - business segments
Until 13 June 2007 the Group was organised on a worldwide basis into three
business segment: Fibres, Specialist Coatings and Umbrella Frames. On 13 June
2007 the Umbrella Frames operation was sold and on 30 October 2008 the Group
sold a 60% holding in the Specialist Coatings operation leaving Fibres as the
sole remaining business segment.
+---------------------------+----------+----------+----------+-------------+----------+--+------------+----------+--------+
| | Continuing operations | | Discontinued operations |
+---------------------------+---------------------------------------------------------+--+--------------------------------+
| | European | US | Total | | | | Specialist | Umbrella | |
+---------------------------+----------+----------+----------+-------------+----------+--+------------+----------+--------+
| Year ended | Fibres | Fibres | Fibres | Unallocated | Total | | Coatings | Frames | Total |
+---------------------------+----------+----------+----------+-------------+----------+--+------------+----------+--------+
| 31 March 2009 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | | GBP000 | GBP000 | GBP000 |
+---------------------------+----------+----------+----------+-------------+----------+--+------------+----------+--------+
| Revenue | 53,720 | 32,494 | 86,214 | -- | 86,214 | | 13,919 | -- | 13,919 |
+---------------------------+----------+----------+----------+-------------+----------+--+------------+----------+--------+
| Operating profit (loss) | 1,160 | (652) | 508 | (632) | (124) | | 837 | -- | 837 |
| before | | | | | | | | | |
+---------------------------+----------+----------+----------+-------------+----------+--+------------+----------+--------+
| exceptional items |
+-------------------------------------------------------------------------------------------------------------------------+
| Exceptional items | (217) | -- | (217) | (1,386) | (1,603) | | -- | -- | -- |
+---------------------------+----------+----------+----------+-------------+----------+--+------------+----------+--------+
| Operating profit (loss) | 943 | (652) | 291 | (2,018) | (1,727) | | 837 | -- | 837 |
+---------------------------+----------+----------+----------+-------------+----------+--+------------+----------+--------+
| Net financing costs | (310) | (490) | (800) | (731) | (1,531) | | (160) | -- | (160) |
+---------------------------+----------+----------+----------+-------------+----------+--+------------+----------+--------+
| Share of joint venture | -- | -- | -- | (70) | (70) | | -- | -- | -- |
| losses | | | | | | | | | |
+---------------------------+----------+----------+----------+-------------+----------+--+------------+----------+--------+
| Profit/(loss) before | 633 | (1,142) | (509) | (2,819) | (3,328) | | 677 | -- | 677 |
| taxation | | | | | | | | | |
+---------------------------+----------+----------+----------+-------------+----------+--+------------+----------+--------+
| Taxation | | | | | 582 | | | | (160) |
+---------------------------+----------+----------+----------+-------------+----------+--+------------+----------+--------+
| Group profit on sale of | | | | | -- | | | | 214 |
+---------------------------+----------+----------+----------+-------------+----------+--+------------+----------+--------+
| discontinued operations | | | | | | | | | |
+---------------------------+----------+----------+----------+-------------+----------+--+------------+----------+--------+
| (Loss) profit for the | | | | | (2,746) | | | | 731 |
| period | | | | | | | | | |
+---------------------------+----------+----------+----------+-------------+----------+--+------------+----------+--------+
| Segment assets | 25,525 | 22,523 | 48,048 | 7,527 | 55,575 | | -- | -- | -- |
+---------------------------+----------+----------+----------+-------------+----------+--+------------+----------+--------+
| Segment liabilities | (17,189) | (10,491) | (27,680) | (12,070) | (39,750) | | -- | -- | -- |
+---------------------------+----------+----------+----------+-------------+----------+--+------------+----------+--------+
| Other segment items: | | | | | | | | | |
+---------------------------+----------+----------+----------+-------------+----------+--+------------+----------+--------+
| Capital expenditure | 179 | 35 | 214 | -- | 214 | | 27 | -- | 27 |
+---------------------------+----------+----------+----------+-------------+----------+--+------------+----------+--------+
| Depreciation | 901 | 2,064 | 2,965 | -- | 2,965 | | 232 | -- | 232 |
+---------------------------+----------+----------+----------+-------------+----------+--+------------+----------+--------+
+---------------------------+----------+---------+----------+----------+----------+--+---------+--------+---------+
| Year ended | | |
+---------------------------------------------------------------------------------+--+----------------------------+
| 31 March 2008 | | |
+---------------------------------------------------------------------------------+--+----------------------------+
| Revenue | 52,579 | 34,815 | 87,394 | -- | 87,394 | | 23,842 | 1,581 | 25,423 |
+---------------------------+----------+---------+----------+----------+----------+--+---------+--------+---------+
| Operating profit (loss) | 1,174 | 72 | 1,246 | (894) | 352 | | 1,841 | 25 | 1,866 |
| before | | | | | | | | | |
+---------------------------+----------+---------+----------+----------+----------+--+---------+--------+---------+
| exceptional items | | | | | | | | | |
+---------------------------+----------+---------+----------+----------+----------+--+---------+--------+---------+
| Exceptional items | (461) | (292) | (753) | (436) | (1,189) | | -- | (511) | (511) |
+---------------------------+----------+---------+----------+----------+----------+--+---------+--------+---------+
| Operating profit (loss) | 713 | (220) | 493 | (1,330) | (837) | | 1,841 | (486) | 1,355 |
+---------------------------+----------+---------+----------+----------+----------+--+---------+--------+---------+
| Net financing costs | (437) | (393) | (830) | (64) | (894) | | (498) | 1 | (497) |
+---------------------------+----------+---------+----------+----------+----------+--+---------+--------+---------+
| Profit (loss) before | 276 | (613) | (337) | (1,394) | (1,731) | | 1,343 | (485) | 858 |
| taxation | | | | | | | | | |
+---------------------------+----------+---------+----------+----------+----------+--+---------+--------+---------+
| Taxation | | | | | 241 | | | | 220 |
+---------------------------+----------+---------+----------+----------+----------+--+---------+--------+---------+
| (Loss) profit for the | | | | | (1,490) | | | | 1,078 |
| period | | | | | | | | | |
+---------------------------+----------+---------+----------+----------+----------+--+---------+--------+---------+
| Segment assets | 28,631 | 19,824 | 48,455 | 404 | 48,859 | | 9,892 | -- | 9,892 |
+---------------------------+----------+---------+----------+----------+----------+--+---------+--------+---------+
| Segment liabilities | (18,586) | (9,998) | (28,584) | (6,850) | (35,434) | | (6,432) | -- | (6,432) |
+---------------------------+----------+---------+----------+----------+----------+--+---------+--------+---------+
| Other segment items: | | | | | | | | | |
+---------------------------+----------+---------+----------+----------+----------+--+---------+--------+---------+
| Capital expenditure | 69 | 151 | 220 | 3 | 223 | | 32 | -- | 32 |
+---------------------------+----------+---------+----------+----------+----------+--+---------+--------+---------+
| Depreciation | 899 | 1,775 | 2,674 | 28 | 2,702 | | 394 | -- | 394 |
+---------------------------+----------+---------+----------+----------+----------+--+---------+--------+---------+
Unallocated assets in 2009 include GBP656,000 investment in joint ventures.
Unallocated assets primarily comprise income tax receivable and UK retirement
benefit assets as well as those assets which are used for general head office
purposes.
Unallocated liabilities primarily comprise income tax payable, UK retirement
benefit obligations and preference shares as well as liabilities relating to
general head office activities.
Secondary format - geographical segments
The Group operations are based in two main geographical regions being Europe and
North America. The UK is the home of the Parent Company. The sales analysis in
the table below is based on the location of the customer. Segment assets and
capital expenditure are based on the geographical location of assets.
+--------------------------------+-----------+-----------+-----------+-----------+-----------+-----------+
| | Revenue | Segment assets | Capital expenditure |
+--------------------------------+-----------------------+-----------------------+-----------------------+
| | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 |
+--------------------------------+-----------+-----------+-----------+-----------+-----------+-----------+
| Continuing operations | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------------------+-----------+-----------+-----------+-----------+-----------+-----------+
| Europe | 47,200 | 46,545 | 33,052 | 29,035 | 179 | 72 |
+--------------------------------+-----------+-----------+-----------+-----------+-----------+-----------+
| North America | 33,263 | 36,183 | 22,523 | 19,824 | 35 | 151 |
+--------------------------------+-----------+-----------+-----------+-----------+-----------+-----------+
| Australasia and Far East | 4,768 | 4,140 | -- | -- | -- | -- |
+--------------------------------+-----------+-----------+-----------+-----------+-----------+-----------+
| Rest of the World | 983 | 526 | -- | -- | -- | -- |
+--------------------------------+-----------+-----------+-----------+-----------+-----------+-----------+
| | 86,214 | 87,394 | 55,575 | 48,859 | 214 | 223 |
+--------------------------------+-----------+-----------+-----------+-----------+-----------+-----------+
| Discontinued operations | | | | | | |
+--------------------------------+-----------+-----------+-----------+-----------+-----------+-----------+
| Europe | 13,713 | 25,034 | -- | 9,892 | 27 | 32 |
+--------------------------------+-----------+-----------+-----------+-----------+-----------+-----------+
| North America | -- | 54 | -- | -- | -- | -- |
+--------------------------------+-----------+-----------+-----------+-----------+-----------+-----------+
| Australasia and Far East | 206 | 272 | -- | -- | -- | -- |
+--------------------------------+-----------+-----------+-----------+-----------+-----------+-----------+
| Rest of the World | -- | 63 | -- | -- | -- | -- |
+--------------------------------+-----------+-----------+-----------+-----------+-----------+-----------+
| | 13,919 | 25,423 | -- | 9,892 | 27 | 32 |
+--------------------------------+-----------+-----------+-----------+-----------+-----------+-----------+
Exceptional items
+----------------------------------------------------------------------+-------------+-------------+
| 2009 | 2008 |
+------------------------------------------------------------------------------------+-------------+
| Continuing operations | GBP000 | GBP000 |
+----------------------------------------------------------------------+-------------+-------------+
| Fibres restructuring | 217 | 753 |
+----------------------------------------------------------------------+-------------+-------------+
| Strategic advice | 112 | 181 |
+----------------------------------------------------------------------+-------------+-------------+
| Provision for onerous leases | 1,150 | -- |
+----------------------------------------------------------------------+-------------+-------------+
| Costs associated with the re-financing of the Group | -- | 128 |
+----------------------------------------------------------------------+-------------+-------------+
| Head office restructuring | 124 | 60 |
+----------------------------------------------------------------------+-------------+-------------+
| Cost associated with transfer to AIM | -- | 67 |
+----------------------------------------------------------------------+-------------+-------------+
| | 1,603 | 1,189 |
+----------------------------------------------------------------------+-------------+-------------+
Restructuring costs are primarily employee related costs in 2009. In 2008
restructuring costs related to employee costs, relocation costs and asset
impairment losses.
Discontinued operations
On 30 October 2008 60% of the share capital of Speciality Coatings (Darwen)
Limited was sold for GBP1,600,000. In addition, Speciality Coatings (Darwen)
Limited repaid GBP4,000,000 of inter-company borrowings prior to completion. The
Group provided a guarantee of up to GBP1,500,000 in respect of Speciality
Coatings (Darwen) Limited's borrowings. This guarantee can be called upon in
certain limited circumstances and reduces on a quarterly basis in amounts of
GBP250,000 over the period ended 1 January 2010. The guarantee at 31 March 2009
is GBP1,000,000.
On 13 June 2007 the entire share capital of Hoyland Fox Limited was sold for
GBP1,050,000 on completion and a maximum deferred consideration of GBP350,000.
As a result, the Specialist Coatings and Umbrella Frames operations, in line
with IFRS 5, have been accounted for as discontinued operations. The 2008
figures have been restated to show Specialist Coatings as a discontinued
operation.
Financial information relating to these discontinued operations is set out
below.
(a) Result
The result of the discontinued operations up to disposal are as follows:
+----------------------------------------------------------------------+-------------+-------------+
| | |
+------------------------------------------------------------------------------------+-------------+
| | |
+------------------------------------------------------------------------------------+-------------+
| | |
+------------------------------------------------------------------------------------+-------------+
| | 2009 | 2008 |
+----------------------------------------------------------------------+-------------+-------------+
| | GBP000 | GBP000 |
+----------------------------------------------------------------------+-------------+-------------+
| Revenue | 13,919 | 25,423 |
+----------------------------------------------------------------------+-------------+-------------+
| Cost of sales | (12,087) | (21,537) |
+----------------------------------------------------------------------+-------------+-------------+
| Gross profit | 1,832 | 3,886 |
+----------------------------------------------------------------------+-------------+-------------+
| Operating expenses | (995) | (2,531) |
+----------------------------------------------------------------------+-------------+-------------+
| Operating profit |
+--------------------------------------------------------------------------------------------------+
| Operating profit before exceptional items | 837 | 1,866 |
+----------------------------------------------------------------------+-------------+-------------+
| Exceptional items | -- | (511) |
+----------------------------------------------------------------------+-------------+-------------+
| Operating profit | 837 | 1,355 |
+----------------------------------------------------------------------+-------------+-------------+
| Net financing costs | (160) | (497) |
+----------------------------------------------------------------------+-------------+-------------+
| Profit before taxation | 677 | 858 |
+----------------------------------------------------------------------+-------------+-------------+
| Taxation | (160) | 220 |
+----------------------------------------------------------------------+-------------+-------------+
| Profit for the period | 517 | 1,078 |
+----------------------------------------------------------------------+-------------+-------------+
| Group profit on sale of discontinued operations | 214 | -- |
+----------------------------------------------------------------------+-------------+-------------+
| Profit for the period from the discontinued operations | 731 | 1,078 |
+----------------------------------------------------------------------+-------------+-------------+
The discontinued results for the year ended 31 March 2009 relate only to the
Specialist Coatings operation. The discontinued results for the year ended 31
March 2008 include both the Umbrella Frames and Specialist Coatings operations.
The profit from the discontinued operations includes GBPNil (2008: GBP9,000)
post-tax loss from the re-measurement of the disposal assets to fair value.
(b) Exceptional items
+----------------------------------------------------------------------+-------------+-------------+
| | 2009 | 2008 |
+----------------------------------------------------------------------+-------------+-------------+
| | GBP000 | GBP000 |
+----------------------------------------------------------------------+-------------+-------------+
| Provision for onerous lease | -- | 575 |
+----------------------------------------------------------------------+-------------+-------------+
| Costs incurred in connection with sale of Umbrella Frames | -- | (55) |
+----------------------------------------------------------------------+-------------+-------------+
| Impairment of Umbrella Frames' assets to fair value | -- | (9) |
+----------------------------------------------------------------------+-------------+-------------+
| | -- | 511 |
+----------------------------------------------------------------------+-------------+-------------+
(c) Cash flows from discontinued operations
+----------------------------------------------------------------------+-------------+-------------+
| | 2009 | 2008 |
+----------------------------------------------------------------------+-------------+-------------+
| | GBP000 | GBP000 |
+----------------------------------------------------------------------+-------------+-------------+
| Net cash flows from operating activities | (2,280) | 3,094 |
+----------------------------------------------------------------------+-------------+-------------+
| Net cash flows from investing activities | (4,026) | (32) |
+----------------------------------------------------------------------+-------------+-------------+
| Net cash flows from financing activities | (38) | 217 |
+----------------------------------------------------------------------+-------------+-------------+
| Net (decrease) increase in cash and cash equivalents | (6,344) | 3,279 |
+----------------------------------------------------------------------+-------------+-------------+
(d) Disposal of subsidiary
The carrying value of the major classes of assets and liabilities of the
discontinued Specialist Coatings operation, at 30 October 2008 was:
+----------------------------------------------------------------------+--------------------------+
| | 30 October |
+----------------------------------------------------------------------+--------------------------+
| | 2008 |
+----------------------------------------------------------------------+--------------------------+
| | GBP000 |
+----------------------------------------------------------------------+--------------------------+
| Property, plant and equipment | 1,503 |
+----------------------------------------------------------------------+--------------------------+
| Deferred tax assets | 229 |
+----------------------------------------------------------------------+--------------------------+
| Non-current assets | 1,732 |
+----------------------------------------------------------------------+--------------------------+
| Inventories | 1,141 |
+----------------------------------------------------------------------+--------------------------+
| Trade and other receivables | 6,511 |
+----------------------------------------------------------------------+--------------------------+
| | 7,652 |
+----------------------------------------------------------------------+--------------------------+
| Trade and other payables | (3,416) |
+----------------------------------------------------------------------+--------------------------+
| Current tax liabilities | (160) |
+----------------------------------------------------------------------+--------------------------+
| Borrowings due within one year | (3,901) |
+----------------------------------------------------------------------+--------------------------+
| Net current assets | 175 |
+----------------------------------------------------------------------+--------------------------+
| Borrowings due after one year | (93) |
+----------------------------------------------------------------------+--------------------------+
| Net assets | 1,814 |
+----------------------------------------------------------------------+--------------------------+
| Assets disposed of (60%) | (1,088) |
+----------------------------------------------------------------------+--------------------------+
| Sale expenses | (298) |
+----------------------------------------------------------------------+--------------------------+
| Total consideration | 1,600 |
+----------------------------------------------------------------------+--------------------------+
| Gain on disposal | 214 |
+----------------------------------------------------------------------+--------------------------+
| Net cash inflow arising on disposal: | |
+----------------------------------------------------------------------+--------------------------+
| Cash consideration | 1,600 |
+----------------------------------------------------------------------+--------------------------+
| Cash and cash equivalents disposed of | 3,866 |
+----------------------------------------------------------------------+--------------------------+
| Loans disposed of | 128 |
+----------------------------------------------------------------------+--------------------------+
| Sale expenses | (267) |
+----------------------------------------------------------------------+--------------------------+
| 5,327 |
+----------------------------------------------------------------------+--------------------------+
Basic and diluted earnings (loss) per ordinary share
Basic earnings (loss) per share is calculated by dividing the loss or earnings
attributable to shareholders by the weighted average number of ordinary shares
in issue during the period, excluding those held in the Employee Benefit Trust.
For diluted earnings per share, the weighted average number of ordinary shares
in issue is adjusted to assume conversion of all potential dilutive ordinary
shares. The potential dilutive ordinary shares relate to those options granted
to employees where the exercise price is less than the average market price of
the Company's ordinary shares at the balance sheet date. At 31 March 2009 the
potential dilutive ordinary shares amounted to Nil (2008: Nil).
+------------------------------------------------------+--------------------------------------------------+------------+------------+---------+------------+
| | | | Basic and diluted |
+ +---------------------------------------------------------------+------------+----------------------+
| | Basic and diluted | | (loss) |
| | | | earnings |
| | | | before |
+ +---------------------------------------------------------------+------------+----------------------+
| | (loss) per share | | exceptionals |
| | | | per share |
+------------------------------------------------------+---------------------------------------------------------------+------------+----------------------+
| 2009 | 2008 | 2009 | 2008 |
+---------------------------------------------------------------------------------------------------------+------------+----------------------+------------+
| Continuing and discontinued operations | GBP000 | GBP000 | GBP000 | GBP000 |
+------------------------------------------------------+--------------------------------------------------+------------+----------------------+------------+
| Loss for the financial year | (2,015) | (412) | (2,015) | (412) |
+------------------------------------------------------+--------------------------------------------------+------------+----------------------+------------+
| Exceptional items | -- | -- | 1,389 | 1,700 |
+------------------------------------------------------+--------------------------------------------------+------------+----------------------+------------+
| Tax effect of exceptional items | -- | -- | (27) | (103) |
+------------------------------------------------------+--------------------------------------------------+------------+----------------------+------------+
| (Loss) earnings attributable to ordinary | (2,015) | (412) | (653) | 1,185 |
| shareholders | | | | |
+------------------------------------------------------+--------------------------------------------------+------------+----------------------+------------+
| Weighted average number of ordinary shares in issue | 20,172 | 20,120 | 20,172 | 20,120 |
| during | | | | |
+------------------------------------------------------+--------------------------------------------------+------------+----------------------+------------+
| the year (000s) | | | | |
+------------------------------------------------------+--------------------------------------------------+------------+----------------------+------------+
| Basic and diluted (loss) earnings per ordinary share | (9.99) | (2.05) | (3.24) | 5.89 |
| (pence) | | | | |
+------------------------------------------------------+--------------------------------------------------+------------+------------+---------+------------+
The effect of the exceptional items on the earnings per share in 2009 was a loss
of 6.75p (2008: 7.94p).
Basic and diluted earnings (loss) per ordinary share continued
+------------------------------------------------------+--------------------------------------------------+------------+------------+---------+------------+
| | | | Basic and diluted |
+ +---------------------------------------------------------------+------------+----------------------+
| | Basic and diluted | | earnings |
| | | | (loss) |
| | | | before |
+ +---------------------------------------------------------------+------------+----------------------+
| | (loss) per share | | exceptionals |
| | | | per share |
+------------------------------------------------------+---------------------------------------------------------------+------------+----------------------+
| 2009 | 2008 | 2009 | 2008 |
+---------------------------------------------------------------------------------------------------------+------------+----------------------+------------+
| Continuing operations | GBP000 | GBP000 | GBP000 | GBP000 |
+------------------------------------------------------+--------------------------------------------------+------------+----------------------+------------+
| Loss for the financial year | (2,746) | (1,490) | (2,746) | (1,490) |
+------------------------------------------------------+--------------------------------------------------+------------+----------------------+------------+
| Exceptional items | -- | -- | 1,603 | 1,189 |
+------------------------------------------------------+--------------------------------------------------+------------+----------------------+------------+
| Tax effect of exceptional items | -- | -- | (27) | (103) |
+------------------------------------------------------+--------------------------------------------------+------------+----------------------+------------+
| Loss attributable to ordinary shareholders | (2,746) | (1,490) | (1,170) | (404) |
+------------------------------------------------------+--------------------------------------------------+------------+----------------------+------------+
| Weighted average number of ordinary shares in issue | 20,172 | 20,120 | 20,172 | 20,120 |
| during | | | | |
+------------------------------------------------------+--------------------------------------------------+------------+----------------------+------------+
| the year (000s) | | | | |
+------------------------------------------------------+--------------------------------------------------+------------+----------------------+------------+
| Basic and diluted loss per ordinary share (pence) | (13.61) | (7.41) | (5.80) | (2.01) |
+------------------------------------------------------+--------------------------------------------------+------------+------------+---------+------------+
The effect of exceptional items on the earnings per share of continuing
operations was a loss of 7.81p (2008: 5.40p).
+--------------------------------------------------+--------------------------------------------------+------------+------------+---------+------------+
| | | | Basic and diluted |
+ +---------------------------------------------------------------+------------+----------------------+
| | Basic and diluted | | earnings |
| | | | (loss) |
| | | | before |
+ +---------------------------------------------------------------+------------+----------------------+
| | (loss) per share | | exceptionals |
| | | | per share |
+--------------------------------------------------+---------------------------------------------------------------+------------+----------------------+
| 2009 | 2008 | 2009 | 2008 |
+-----------------------------------------------------------------------------------------------------+------------+----------------------+------------+
| Discontinued operations | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------------------------------------+--------------------------------------------------+------------+----------------------+------------+
| Earnings for the financial year | 731 | 1,078 | 731 | 1,078 |
+--------------------------------------------------+--------------------------------------------------+------------+----------------------+------------+
| Exceptional items | -- | -- | (214) | 511 |
+--------------------------------------------------+--------------------------------------------------+------------+----------------------+------------+
| Tax effect of exceptional items | -- | -- | -- | -- |
+--------------------------------------------------+--------------------------------------------------+------------+----------------------+------------+
| Earnings attributable to ordinary shareholders | 731 | 1,078 | 517 | 1,589 |
+--------------------------------------------------+--------------------------------------------------+------------+----------------------+------------+
| Weighted average number of ordinary shares in | 20,172 | 20,120 | 20,172 | 20,120 |
| issue | | | | |
+--------------------------------------------------+--------------------------------------------------+------------+----------------------+------------+
| during the year (000s) | | | | |
+--------------------------------------------------+--------------------------------------------------+------------+----------------------+------------+
| Basic and diluted earnings per ordinary share | 3.62 | 5.36 | 2.56 | 7.9 |
| (pence) | | | | |
+--------------------------------------------------+--------------------------------------------------+------------+------------+---------+------------+
The effect of the exceptional items on the earnings (loss) per share was a
profit of 1.06p (2008: loss of 2.54p).
Consolidated statement of changes in shareholders' equity
+----------------------------------+--------+---------+---------+----------+-------------+------------+----------+
| Foreign | | | |
+--------------------------------------------------------------------------+-------------+ + +
| Share | Cash | | | currency | Capital |
| | flow | | | | |
+-----------------------------------------------------+---------+----------+ +------------+----------+
| Share | premium | hedging | | translation | redemption | Retained |
+-------------------------------------------+---------+---------+----------+-------------+------------+----------+
| capital | reserve | reserve | reserve | reserve | earnings | Total |
+-------------------------------------------+---------+---------+----------+-------------+------------+----------+
| GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+-------------------------------------------+---------+---------+----------+-------------+------------+----------+
| Balance at 31 March 2007 | 10,202 | 1,251 | 44 | (1,197) | 487 | 4,088 | 14,875 |
+----------------------------------+--------+---------+---------+----------+-------------+------------+----------+
| Loss for the period | -- | -- | -- | -- | -- | (412) | (412) |
+----------------------------------+--------+---------+---------+----------+-------------+------------+----------+
| Currency translation adjustments | -- | -- | -- | 60 | -- | -- | 60 |
+----------------------------------+--------+---------+---------+----------+-------------+------------+----------+
| Decrease in fair value of | -- | -- | (284) | -- | -- | -- | (284) |
| hedging derivatives | | | | | | | |
+----------------------------------+--------+---------+---------+----------+-------------+------------+----------+
| Employee share schemes | -- | -- | -- | -- | -- | 41 | 41 |
+----------------------------------+--------+---------+---------+----------+-------------+------------+----------+
| Actuarial gains on pension | -- | -- | -- | -- | -- | 3,743 | 3,743 |
| scheme net | | | | | | | |
+----------------------------------+--------+---------+---------+----------+-------------+------------+----------+
| of deferred tax | | | | | | | |
+----------------------------------+--------+---------+---------+----------+-------------+------------+----------+
| Balance at 31 March 2008 | 10,202 | 1,251 | (240) | (1,137) | 487 | 7,460 | 18,023 |
+----------------------------------+--------+---------+---------+----------+-------------+------------+----------+
| Prior year adjustment | -- | -- | -- | -- | -- | (1,138) | (1,138) |
+----------------------------------+--------+---------+---------+----------+-------------+------------+----------+
| Balance at 1 April 2008 | 10,202 | 1,251 | (240) | (1,137) | 487 | 6,322 | 16,885 |
+----------------------------------+--------+---------+---------+----------+-------------+------------+----------+
| Loss for the period | -- | -- | -- | -- | -- | (2,015) | (2,015) |
+----------------------------------+--------+---------+---------+----------+-------------+------------+----------+
| Currency translation adjustments | -- | -- | -- | 2,842 | -- | -- | 2,842 |
+----------------------------------+--------+---------+---------+----------+-------------+------------+----------+
| Decrease in fair value of | -- | -- | (78) | -- | -- | -- | (78) |
| hedging | | | | | | | |
+----------------------------------+--------+---------+---------+----------+-------------+------------+----------+
| derivatives | | | | | | | |
+----------------------------------+--------+---------+---------+----------+-------------+------------+----------+
| Employee share schemes | -- | -- | -- | -- | -- | 10 | 10 |
+----------------------------------+--------+---------+---------+----------+-------------+------------+----------+
| Actuarial losses on pension | -- | -- | -- | -- | -- | (1,819) | (1,819) |
| scheme net | | | | | | | |
+----------------------------------+--------+---------+---------+----------+-------------+------------+----------+
| of deferred tax | | | | | | | |
+----------------------------------+--------+---------+---------+----------+-------------+------------+----------+
| Balance at 31 March 2009 | 10,202 | 1,251 | (318) | 1,705 | 487 | 2,498 | 15,825 |
+----------------------------------+--------+---------+---------+----------+-------------+------------+----------+
Goodwill arising prior to 1998/9 of GBP36,887,000 in aggregate has been charged
against Group reserves.
Cash flow hedging reserve
The cash flow hedging reserve is used to record the portion of the gains or
losses on hedging instruments used as cash flow hedges that are determined to be
effective.
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences
arising from the translation of the financial statements of foreign operations.
Capital redemption reserve
The capital redemption reserve was created in the year ended 31 March 2001 in
connection with a purchase of own shares by the Company.
Cash generated from (used in) operations
+------------------------------------------------------+--------------------------+------------------------------------------------------+--------------------------+
| | (As restated) |
+ +---------------------------------------------------------------------------------+
| | 2009 | 2008 |
+ +------------------------------------------------------+--------------------------+
| | GBP000 | GBP000 |
+---------------------------------------------------------------------------------+------------------------------------------------------+--------------------------+
| Continuing operations: |
+-------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| - operating loss | (1,727) | (837) |
+------------------------------------------------------+---------------------------------------------------------------------------------+--------------------------+
| - depreciation | 2,965 | 2,702 |
+------------------------------------------------------+---------------------------------------------------------------------------------+--------------------------+
| - charge in respect of employee share scheme | 10 | 41 |
+------------------------------------------------------+---------------------------------------------------------------------------------+--------------------------+
| - profit on disposal of fixed asset | (5) | (4) |
+------------------------------------------------------+---------------------------------------------------------------------------------+--------------------------+
| Working capital: |
+-------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| - decrease in inventories | 1,582 | 1,954 |
+------------------------------------------------------+---------------------------------------------------------------------------------+--------------------------+
| - decrease in debtors | 4,820 | 1,197 |
+------------------------------------------------------+---------------------------------------------------------------------------------+--------------------------+
| - decrease in creditors | (5,270) | (716) |
+------------------------------------------------------+---------------------------------------------------------------------------------+--------------------------+
| - decrease in retirement benefit obligations | (368) | (639) |
+------------------------------------------------------+---------------------------------------------------------------------------------+--------------------------+
| | 2,007 | 3,698 |
+------------------------------------------------------+---------------------------------------------------------------------------------+--------------------------+
| | |
+----------------------------------------------------------------------------------------------------------------------------------------+--------------------------+
| Exceptional items: |
+-------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| - Fibres restructuring: | Amount recognised in | 217 | 753 |
| | period | | |
+------------------------------------------------------+--------------------------+------------------------------------------------------+--------------------------+
| | Amount paid in period | (132) | (575) |
+------------------------------------------------------+--------------------------+------------------------------------------------------+--------------------------+
| - strategic advice: | Amount recognised in | 112 | 181 |
| | period | | |
+------------------------------------------------------+--------------------------+------------------------------------------------------+--------------------------+
| | Amount paid in period | (112) | (87) |
+------------------------------------------------------+--------------------------+------------------------------------------------------+--------------------------+
| - costs associated with re-financing of Group: | Amount recognised in | -- | 128 |
| | period | | |
+------------------------------------------------------+--------------------------+------------------------------------------------------+--------------------------+
| | Amount paid in period | -- | (935) |
+------------------------------------------------------+--------------------------+------------------------------------------------------+--------------------------+
| - head office restructuring: | Amount recognised in | 124 | 60 |
| | period | | |
+------------------------------------------------------+--------------------------+------------------------------------------------------+--------------------------+
| | Amount paid in period | -- | (425) |
+------------------------------------------------------+--------------------------+------------------------------------------------------+--------------------------+
| - costs associated with transfer to AIM: | Amount recognised in | -- | 67 |
| | period | | |
+------------------------------------------------------+--------------------------+------------------------------------------------------+--------------------------+
| | Amount paid in period | -- | (57) |
+------------------------------------------------------+--------------------------+------------------------------------------------------+--------------------------+
| - provision for onerous lease costs: | Amount recognised in | 1,150 | -- |
| | period | | |
+------------------------------------------------------+--------------------------+------------------------------------------------------+--------------------------+
| | Amount paid in period | (210) | (448) |
+------------------------------------------------------+--------------------------+------------------------------------------------------+--------------------------+
| Net cash generated from continuing operations | 3,156 | 2,360 |
+---------------------------------------------------------------------------------+------------------------------------------------------+--------------------------+
| Discontinued operations: |
+-------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| - operating profit | 837 | 1,355 |
+---------------------------------------------------------------------------------+------------------------------------------------------+--------------------------+
| - depreciation | 232 | 447 |
+---------------------------------------------------------------------------------+------------------------------------------------------+--------------------------+
| Working capital: |
+-------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| - decrease (increase) in inventories | 413 | (241) |
+---------------------------------------------------------------------------------+------------------------------------------------------+--------------------------+
| - (increase) decrease in debtors | (1,546) | 1,660 |
+---------------------------------------------------------------------------------+------------------------------------------------------+--------------------------+
| - (decrease) increase in creditors | (1,779) | 538 |
+---------------------------------------------------------------------------------+------------------------------------------------------+--------------------------+
| | (1,843) | 3,759 |
+---------------------------------------------------------------------------------+------------------------------------------------------+--------------------------+
| | |
+----------------------------------------------------------------------------------------------------------------------------------------+--------------------------+
| Exceptional items: |
+-------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| - Specialist Coatings restructuring: | Amount paid in period | -- | (332) |
+------------------------------------------------------+--------------------------+------------------------------------------------------+--------------------------+
| - provision for onerous lease costs: | Amount recognised in | -- | 575 |
| | period | | |
+------------------------------------------------------+--------------------------+------------------------------------------------------+--------------------------+
| - Umbrella Frames restructuring: | Amount paid in period | -- | (232) |
+------------------------------------------------------+--------------------------+------------------------------------------------------+--------------------------+
| - costs incurred in connection with sale of Umbrella | Amount recognised in | -- | (55) |
| Frames | period | | |
+------------------------------------------------------+--------------------------+------------------------------------------------------+--------------------------+
| | Amount paid in period | -- | (115) |
+------------------------------------------------------+--------------------------+------------------------------------------------------+--------------------------+
| - impairment of Umbrella Frames' assets: | Amount recognised in | -- | (9) |
| | period | | |
+------------------------------------------------------+--------------------------+------------------------------------------------------+--------------------------+
| Net cash (used in) generated from discontinued operations | (1,843) | 3,591 |
+---------------------------------------------------------------------------------+------------------------------------------------------+--------------------------+
| Cash generated from operations | 1,313 | 5,951 |
+------------------------------------------------------+--------------------------+------------------------------------------------------+--------------------------+
Reconciliation to net debt
+--------------------------------------------------------------------------------+---------+----------+
| | 2009 | 2008 |
+--------------------------------------------------------------------------------+---------+----------+
| | GBP000 | GBP000 |
+--------------------------------------------------------------------------------+---------+----------+
| Increase in cash in the year | 4,142 | 6,072 |
+--------------------------------------------------------------------------------+---------+----------+
| Decrease (increase) in debt and finance leasing | 1,111 | (457) |
+--------------------------------------------------------------------------------+---------+----------+
| Change in net debt from cash flows | 5,253 | 5,615 |
+--------------------------------------------------------------------------------+---------+----------+
| Exchange adjustments | (3,527) | (1,332) |
+--------------------------------------------------------------------------------+---------+----------+
| Movement in net debt in the year | 1,726 | 4,283 |
+--------------------------------------------------------------------------------+---------+----------+
| Net debt at 1 April | (8,420) | (12,703) |
+--------------------------------------------------------------------------------+---------+----------+
| Net debt at 31 March | (6,694) | (8,420) |
+--------------------------------------------------------------------------------+---------+----------+
Analysis of net debt
+-----------------------------------------+-----------+-----------+------------+-----------+-----------+
| Net | |
+-----------------------------------------------------------------+------------------------------------+
| 1 April | cash | Sale of | Exchange | 31 March |
+-----------------------------------------------------+-----------+------------+-----------+-----------+
| 2008 | flow | subsidiary | movement | 2009 |
+-----------------------------------------------------+-----------+------------+-----------+-----------+
| GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+-----------------------------------------------------+-----------+------------+-----------+-----------+
| Cash at bank and in hand | 7,058 | 3,566 | -- | (13) | 10,611 |
+-----------------------------------------+-----------+-----------+------------+-----------+-----------+
| Overdrafts and short-term facilities | (5,401) | 576 | -- | (829) | (5,654) |
+-----------------------------------------+-----------+-----------+------------+-----------+-----------+
| 1,657 | 4,142 | -- | (842) | 4,957 |
+-----------------------------------------------------+-----------+------------+-----------+-----------+
| Debt due after one year | (8,928) | 1,394 | 93 | (2,370) | (9,811) |
+-----------------------------------------+-----------+-----------+------------+-----------+-----------+
| Debt due within one year | (1,149) | (411) | 35 | (315) | (1,840) |
+-----------------------------------------+-----------+-----------+------------+-----------+-----------+
| (10,077) | 983 | 128 | (2,685) | (11,651) |
+-----------------------------------------------------+-----------+------------+-----------+-----------+
| Total | (8,420) | 5,125 | 128 | (3,527) | (6,694) |
+-----------------------------------------+-----------+-----------+------------+-----------+-----------+
Prior year adjustment
Prior year results have been adjusted as follows:
IFRIC 14 "IAS 19 The Limit on a Defined Benefit Asset" has been adopted from 1
April 2008. The effect of this has been to restrict the pension asset relating
to the Defined Benefit Pension Scheme by GBP1,581,000 and also to reduce the
deferred tax liability of GBP443,000 in relation to this pension asset. Total
net assets have been reduced by GBP1,138,000. There is no effect on the income
statement.
Notes:
This preliminary announcement does not form the Group's statutory financial
statements but is prepared on the same basis as set out in the previous year's
annual financial statements. The figures shown in this release have been
extracted from the Group's full financial statements which have been prepared
under International Financial Reporting Standards adopted by the European Union.
The financial statements for the year ended 31 March 2008 have been delivered to
the Registrar of Companies. The 2008 and 2009 financial statements both carry an
unqualified audit report which does not contain an emphasis of matter reference
and does not contain a statement under S237(2) or (3) of the Companies Act 1985.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EBLFFKQBEBBX
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