RNS Number:7285L
Meriden Group PLC
29 April 2005
29 April 2004
Enquiries:
Russell Stevens 07860 562621
Chief Executive Russell@meriden-group.co.uk
Ewan Leggat 020 7107 8000
Seymour Pierce Limited Ewanleggat@seymourpierce.com
Meriden Group Plc (the "Company" or "the Group")
Interim results for the six months ended 31 January 2005
Highlights
* Existing Divisions continuing to perform well
* Exciting New Employee Benefits Division (EBD) launched
* Major blue chip contract wins for EBD already announced
* Further major contract wins expected for EBD
* The company is poised ready for a period of very dramatic growth
* Dividend level maintained
Financial Highlights
- Cost of establishing the EBD absorbed in this period
- Profit before taxation of #219,555 (2004 : #315,057)
- Interim dividend of #29,000 (2004 : #29,000)
- Earnings per share of 0.052 pence (2004 : 0.078 pence)
Commenting, Russell Stevens, Chief Executive said:
'Our existing divisions have continued to grow during the period under review,
and our new Employee Benefits division has now established itself and has
announced some major blue chip account wins with more announcements to follow.
As a result the group is poised ready for a period of very dramatic and
sustained growth and we look forward to the future with a great deal of
confidence.'
Chairman's Statement
I am pleased to present my Chairman's report for Meriden Group Plc for the six
months ended 31 January 2005.
The Group has performed satisfactorily during this period, delivering a pre-tax
profit of #219,555 (2004: #315,057) on a turnover of #4,400,692 (2004:
#3,009,035). All existing divisions have grown steadily and are anticipated to
continue to do so.
In my year end report I made reference to the establishing of the groups new
Employee Benefits Division (EBD) and since this time we have secured our first
major blue chip account wins and more announcements are due to follow. This
division specialises in the delivering of a consultancy lead service to large
corporations aimed at setting up a tax efficient payroll based deferred computer
purchase agreement under the Government's Home Computer Initiative (HCI), and
then dealing with the implementation and supply of the IT equipment. As a result
this division is set to become our largest contributor in 2005/06 of both
turnover and earnings, and as HCI schemes are typically run on an annual basis
it also represents a recurrent income stream from blue chip sources.
The lead time with HCI schemes can be up to twelve months due to the timescale
in agreeing scheme rules with employers and obtaining scheme approval with the
Inland Revenue, and then designing and printing brochures, implementing the
delivery and providing follow up support. During this time a great deal of
overhead is consumed.
The costs of setting up this division and the initial costs in preparing our
first major schemes have been incurred in this period. Therefore, unfortunately
these costs have depressed earnings and will continue to do so in the full year
results. However very significant revenues and earnings will flow in 2005/06 and
beyond, and the short term effects in the 2004/05 financial year are a small
price to pay for the benefits that will follow.
As the group is about to undertake a period of very dramatic growth over the
next few years the directors have decided that the management team needs to be
strengthened at all levels. In particular a candidate has been recruited for the
position of group finance director, who will join the group next month, and
whose appointment to the board will be finalised in the autumn after a six month
probationary period.
Whilst all our trading divisions are likely to deliver growth over the coming
years there is no doubt that the growth from the Employee Benefits Division will
be the most dramatic, such this is likely to become by far the largest source of
revenue and earnings for the group. As a result the group will evolve to have a
predominantly IT focus, and the board do not therefore rule out the possibility
of divesting certain activities over the coming years in order to release
capital for the expansion of these core activities.
Finally, although earnings will be depressed in the current year, the directors
have every confidence in the future earnings growth of the group and as a result
they are again recommending an interim dividend of 0.01p per share equivalent to
that paid in the interim stage last year and we anticipate maintaining the level
of dividend for the full year.
Derek Hall
29 April 2005
Consolidated Profit and Loss Account for the 6 months ended 31 January 2005
Note 6 months 6 months
ended ended Year
31 January 31 January ended
2005 2004 31 July 2004
(unaudited) (unaudited) (audited)
# # #
Turnover -
continuing 4,400,692 3,009,035 4,551,704
Turnover -
acquisitions - - 2,961,809
----------- ----------- -----------
Total turnover 4,400,692 3,009,035 7,513,513
Cost of sales
- continuing (3,317,327) (2,304,738) (3,355,974)
Cost of sales
- acquisitions - - (2,299,593)
----------- ----------- -----------
Total cost of
sales (3,317,327) (2,304,738) (5,655,567)
----------- ----------- -----------
Gross profit -
continuing 1,083,365 704,297 1,195,730
Gross profit -
acquisitions - - 662,216
----------- ----------- -----------
Total gross
profit 1,083,365 704,297 1,857,946
Administrative
expenses -
continuing (867,507) (395,997) (561,000)
Administrative
expenses -
exceptional - - (110,535)
Administrative
expenses -
acquisitions - - (629,713)
----------- ----------- -----------
Total
administrative
expenses (867,507) (395,997) (1,301,248)
----------- ----------- -----------
Operating
profit -
continuing 215,858 308,300 524,195
Operating
profit -
acquisitions - - 32,503
----------- ----------- -----------
Total
operating
profit 215,858 308,300 556,698
Interest
receivable 5,093 6,757 14,815
Interest
payable (1,396) - (1,816)
----------- ----------- -----------
Profit on
ordinary
activities
before
taxation 219,555 315,057 569,697
Taxation (70,000) (88,431) (189,754)
Profit for the
financial
period 149,555 226,626 379,943
Dividends (29,000) (29,000) (66,700)
----------- ----------- -----------
Retained
profits 120,555 197,626 313,243
----------- ----------- -----------
Basic earnings
per share
(pence) 3 0.052 0.078 0.131
Dividend per
share (pence) 0.010 0.010 0.023
----------- ----------- -----------
The company has no recognised gains or losses other than the profit for the
period, which has been derived from continuing operations.
Consolidated Balance Sheet as at 31 January 2005
Note As at As at As at
31 January 2005 31 January 31 July
(unaudited) 2004 2004
(unaudited) (audited)
# # #
Fixed assets
Tangible assets 1,173,632 202,511 214,447
Fixed asset
investments 177,853 177,902 177,853
----------- ----------- -----------
1,351,485 380,413 392,300
Current assets
Stocks and work
in progress 273,721 249,769 263,032
Debtors 4,380,292 2,821,863 4,533,946
Cash at bank and
in hand 241,125 852,164 285,152
----------- ----------- -----------
4,895,138 3,923,796 5,082,130
Current
liabilities
falling due
within one year (3,404,967) (2,416,561) (3,524,209)
----------- ----------- -----------
Net current
assets 1,490,171 1,507,235 1,557,921
----------- ----------- -----------
Total assets less
current
liabilities 2,841,656 1,887,648 1,950,221
Creditors:
Amounts falling
due after one
year (770,880) - -
Provisions for
liabilities and
charges (5,977) (59,021) (5,977)
----------- ----------- -----------
Net assets 2,064,799 1,828,627 1,944,244
----------- ----------- -----------
Capital and
reserves
Called up share
capital 290,000 290,000 290,000
Share premium 523,355 523,355 523,355
Profit and loss
account 1,251,444 1,015,272 1,130,889
----------- ----------- -----------
Equity
shareholders'
funds 4 2,064,799 1,828,627 1,944,244
----------- ----------- -----------
Consolidated Cash Flow Statement for the 6 months ended 31 January 2005
Note 6 months ended 31 6 months Year ended
31 January 2005 ended 31 31 July 2004
(unaudited) January 2004 (audited)
(unaudited)
# # #
Net cash
inflow/(outflow) from
operating
activities 5 74,881 77,985 (931,841)
Return on
investments
Interest
received 5,093 6,757 14,815
Interest
payable (1,396) - (1,816)
----------- ----------- -----------
Net cash
inflow from
returns on
investment and
servicing of finance 3,697 6,757 12,999
Tax paid (80,702) - (200,000)
Capital expenditure
and financial
investment
Payments to acquire
tangible fixed assets (1,006,168) (467) (70,940)
Payments to acquire - - -
fixed asset
investments
Receipt from
disposal of
intangible
fixed assets - - 49
Receipts from
the sale of
tangible fixed
assets - - 9,214
----------- ---------- -----------
Net cash
inflow/(outflow) from
capital expenditure
and financial
investments (1,006,168) (467) (61,677)
Dividend paid (58) (37,700) (66,597)
----------- ----------- -----------
Net cash
(outflow)/inflow
before
financing (1,008,350) 46,575 (1,247,116)
Financing
Debt due
within one
year 206,318 - 713,804
Debt due after
one year 770,880 - -
----------- ---------- -----------
Net cash
inflow from
financing 977,198 - 713,804
----------- ----------- -----------
(Decrease)/
Increase in cash 6 (31,152) 46,575 (533,312)
----------- ----------- -----------
Notes to the Interim Results for the period ended 31 January 2005
1 Basis of preparation
The interim report does not represent statutory accounts within the meaning of
section 240 Companies Act 1985. Comparative figures for the year ended 31 July
2004 are an abridged version of the Group's full accounts which carries an
unqualified audit report and have been delivered to the Registrar. The interim
report has not been audited or reviewed but was approved by the Board on 29
April 2005.
2 Basis of consolidation
The Consolidated Profit and Loss Account, Balance Sheet and Cash Flow
Statement consolidate those of the Company and its subsidiary undertakings as
at 31 January 2005. Intra-group transactions have been eliminated in full.
3 Basic earnings per share
The calculation of the basic earnings per share is based on the profit on ordinary
activities after taxation and on the weighted average number of shares in issue
during the period. The profit and weighted average number of shares used in the
calculations are set out below:
Profit Weighted Basic
# average Earnings
number per share
of shares (pence)
6 months ended 31 149,555 290,000,000 0.052
January 2005
6 months ended 31 226,626 290,000,000 0.078
January 2004
Year ended 31 July 379,943 290,000,000 0.131
2004
----------- --------------- -----------
4 Reconciliation of movements in shareholders' funds
6 months 6 months
ended ended Year
31 January 31 January ended
2005 2004 31 July 2004
(unaudited) (unaudited) (audited)
# # #
Profit on ordinary activities 149,555 226,626 379,943
after taxation
Dividend (29,000) (29,000) (66,700)
----------- ----------- -----------
Net addition to shareholders' 120,555 197,626 313,243
funds
Opening shareholders' funds 1,944,244 1,631,001 1,631,001
----------- ----------- -----------
Closing shareholders' funds 2,064,799 1,828,627 1,944,244
----------- ----------- -----------
5 Reconciliation of operating profit with net cash flow from operating
activities
6 months 6 months
ended ended Year
31 January 31 January ended
2005 2004 31 July 2004
(unaudited) (unaudited) (audited)
# # #
Operating profit 215,858 308,300 556,698
Depreciation 46,983 49,254 98,577
(Increase) in stocks and work in (10,689) (213,349) (226,612)
progress
Decrease/(Increase) in debtors 153,654 585,774 (1,126,309)
(Decrease)/Increase in creditors (330,925) (651,994) (234,195)
----------- ----------- -----------
Net cash inflow from operativing 74,881 77,985 (931,841)
activities
----------- ----------- -----------
6 Analysis of changes in net
funds
As at Cash flow 31 January
1 August in period 2005
2004
# # #
Cash at bank and in hand 285,152 (44,027) 241,125
Bank overdraft (12,875) 12,875 -
-----------
(31,152)
Debt due within one year (713,804) (206,318) (920,122)
Debt due after one year - (770,880) (770,880)
----------- ----------- -----------
(441,527) (1,008,350) (1,449,877)
----------- ----------- -----------
7 Interim Dividend
The interim dividend of 0.010 pence per share will be available to
shareholders on the register at the close of business on 13 May 2005 ('the
Record Date') and will be paid on 24 June 2005.
8 Notification of Results
A copy of these interim results will be posted to shareholders towards the
middle of May.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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