Final Results

API Group PLC 3 December 2001 3 December 2001 API GROUP PLC Preliminary announcement for the year ended 30 September 2001 * Sales of £183.4m (£188.8m) * Operating loss (before goodwill amortisation and exceptional items) £ 2.9m (£12.3m profit) * Loss before tax, goodwill amortisation and exceptional items of £4.5m (£11.6m profit) reflecting continuing difficult trading conditions and business disruption resulting from plant rationalisation programmes * Exceptional items £24.5m of which £24.1m charged in the first half * Adjusted loss per share of 15.4p (22.4p profit). No final dividend * Net assets per share 204p and balance sheet gearing of 34% * Progress has been made in focusing the Group, including: - site rationalisation programmes in Europe now complete - new management in place with shortened reporting lines - low cost product sourcing from China * 2002 will benefit from rationalisation, new capacity and cost reduction programmes to create annualised savings of £6m Commenting on the results, Chief Executive Derek Ashley said: 'This has been a challenging year in which new management has re-organised the Group, focused production, taken cost out and introduced new products - all against a difficult trading background. However, much has been achieved and the benefits will flow through to improved profitability and to reduced borrowings this financial year.' Extracts from Chairman and Chief Executive's review For the year ended 30 September 2001 KEY FEATURES Substantial progress has been made in the year in reorganising the Group to reduce costs in order to restore profitability and to generate positive cash flow. This has been achieved against a background of competitive trading conditions which have been reflected in the deteriorating performance in the second half of the year, as foreshadowed at the time of the interim results. Five major site rationalisation projects have been undertaken in the year, involving 200 job losses and which will, in aggregate, produce annual cost savings of some £6m per annum with effect from 2002: * Closure of the laminates manufacturing site in Rochdale and transfer of equipment to Poynton, completed in September * Conversion to a secure operation at the Salford facility for the production of specialist foils, initiated during the second half * Concentration of European foil manufacturing at Livingston * Consolidation of the Metallised Paper business at Caerphilly following closure of the plant at Lyme Green * Relocation of Filmcast to new site in Nelson and commissioning of a new cast polypropylene co-extrusion line, completed in August In addition to the site rationalisations, a number of management changes have been made in the Group with the focus on underperforming businesses. In the metallised paper operation, a new management team is now in place with a clear brief to bring the business to break even this financial year. The global foils business has been restructured and a layer of management has been removed. In the United States and in Converted Products new management is in place. The Group's Head Office is being relocated to Poynton to share accommodation with the Laminates operation. Elsewhere in the Group, with the notable exceptions of Shen Yong in China and European Laminates, the performance has been disappointing. We intend therefore to concentrate on those areas of activity where we can leverage our expertise. In doing so we will bring more focus to API and reduce non-productive costs. FINANCIAL RESULTS Turnover for the year ended 30 September 2001 fell by 3% to £183.4m (£188.8m). After adjusting for the effect of the Metallised paper acquisition the like-for-like decline was 7%. The foils businesses in Europe and the United States accounted for the bulk of the fall, while Shen Yong experienced good growth. An operating loss of £2.9m (£12.3m profit) reflected the continuing difficult trading conditions across the Group and compared with a profit of £0.3 million at the half year. Interest payable increased the loss to £4.5m (£11.6m profit). Exceptional items of £24.5m and goodwill amortisation of £0.9m totalled £25.4m (£15.7m). Of the exceptional items £24.1m was charged in the first half. Exceptional items comprised goodwill written off £12.8m, site rationalisation, management restructuring and related costs of £10.6m and provision against the ESOP shares of £1.1m. The FRS3 attributable loss per share was 91.7p (loss 21.5p). No final dividend is being declared. The Group experienced an overall cash outflow of £11.7m in the year. A £12.4m reduction in working capital has to a certain extent offset poor trading results and the costs of the rationalisation programme. However, after taking into account cash and short-term investments in China of £7.3m, net borrowings increased to £23.7m (£12.0m), equivalent to gearing of 34% (12%). Sterling bank facilities total £40m. Net capital expenditure in the year amounted to £11.5 million including commitments of £3.5 million carried over from the previous year and £3.6 million of expenditure on the site rationalisation programme. For the current year, capital expenditure is currently planned to be significantly less than the depreciation charge of some £8.0m. REVIEW OF OPERATIONS Foils and Laminates Operating performance declined substantially from 2000 profits of £12.7m to £ 2.4m in 2001 (before goodwill and exceptional costs) on sales down 5% to £ 111.2m (£116.7m). Some 80% of this reduction in profitability was due to decreasing sales volumes and prices, with higher raw material costs accounting for the balance. The US foils business was the primary cause, moving from profits of £2.4m in 2000 to a loss of £3.8m, reflecting the fall in high margin speciality sales for currency and protective film coatings. The European foils operations accounted for most of the remaining shortfall, with profits falling by £3.9m due to continuing price erosion as a result of the weak euro, import penetration and increased raw material costs. However, Shen Yong and the European laminates business were able to maintain their profitability. In addition to the rationalisation programme designed to reduce costs and improve focus, divisional management changes have been made. Foils is now structured as a single business servicing worldwide customers from manufacturing sites in Europe, USA and China and the European laminates business has been consolidated onto a single site. As a result of this simplified structure a divisional management layer has been eliminated. Included in a series of profit improvement actions is the introduction of new products including the international 'SuperGrafix' range of foils. This ' universal' product range can be manufactured in API's hot stamping foil plants in the USA, UK and China, replacing a wide range of lower performance products, improving productivity and facilitating lowest cost sourcing. The key priority in the division is to reverse the operating losses incurred in 2001 in the US foils business. A new Divisional Chief Executive, with turnaround experience, has been recruited and the senior management team has also been strengthened. A wide ranging product improvement plan is already paying dividends. Metallised Paper Turnover in the metallised paper business increased by 17% to £24.4m (£20.8m), reflecting the first full year of the Van Leer acquisition. The operating loss for the year was £2.9m (£1.7m loss), with the performance adversely affected by the significant disruption caused by the move to Caerphilly. Numerous technical problems followed the re-installation of major items of equipment transferred from the Macclesfield site. These were exacerbated by flooding caused by heavy rainfall in April and a fire at the plant in July. The result has been that manufacturing output has fallen well below plan. Conversely, sales order volume has not been a concern. However, with 85% of sales into mainland Europe, margins were extremely tight reflecting the continued strength of sterling. A new Divisional Chief Executive has been appointed and he is implementing a revised development plan which, although not as ambitious in volume terms, will substantially reduce operating costs by selecting the most beneficial product mix in terms of productivity and margin. CONVERTED PRODUCTS The division achieved an operating profit of £0.2m (£3.9m) on sales down 7% to £47.8m (£51.3m). As with the Foils and Laminates division, trading deteriorated further in the second half year with the operations losing £0.3m compared with a profit of £0.5m in the first half year. The Tenza (self adhesive products) and Learoyd (film based flexible packaging) businesses produced disappointing performances with substantial reductions in profits while the Coated Products business (siliconised release papers) increased profits. Coated Products continues to have exciting potential with new film products for medical and hygiene applications, particularly in the Far East , and in the introduction of bakery papers for the fast food industry. Tenza's decline in profitability was attributable to margin reductions, reflecting selling price pressures both in the UK and in export markets and raw material price increases. Management has responded by reducing costs wherever possible but a substantial improvement is dependent upon more favourable exchange rates and new product initiatives. The Learoyd business moved into loss during the year. The deterioration in performance was in part caused by the relocation of the cast polypropylene operation and the commissioning of a new co-extrusion line. Management in the business has been strengthened and sales initiatives for the new products available from the ten-colour press and the new co-extrusion line are materialising into firm orders. Substantial organisational changes throughout the structure of the business have been made which are expected to show benefits later in 2002. MANAGEMENT Over the last year there have been major changes to the Board and senior management. Derek Ashley joined the Group in February 2001 as Chief Executive having previously worked in the United States as CEO of a large graphics company. In September, David Hudd succeeded Moger Woolley as non-executive Chairman and Moger will retire as a director at the AGM. Moger had served API as Chairman since 1992 and he became Executive Chairman from July 2000 until Derek Ashley joined in February 2001. We have announced today that Dennis Holt has resigned from the Board. Dennis has been Finance Director of the Group since 1990. The Board acknowledges the contribution of Moger and Dennis to the development of the Group and are particularly grateful to Moger for assuming the role of Executive Chairman on an interim basis. We have also today announced the appointment of David Walton as Group Finance Director, with immediate effect. Mr Walton was previously a Senior Vice President of AGT Inc, a publicly traded US company in the graphics industry. Richard Wright joined the Board as a non-executive director in September. Richard has had a successful career in sales and marketing and has been a senior executive of the Ford Motor Company for 13 years. We welcome him to the Board. There have also been a number of changes in the operational management group. Brian Bradbury, who was responsible for the development of our Asia-Pacific businesses, assumes responsibility for the worldwide Foils business and Don Kneir has recently joined the Group and heads our USA Foils operations. In the UK, Paul Laskey, previously the Foils and Laminates Sales and Marketing Director, has recently been appointed to lead the Metallised Paper business. Colin Ames and Richard Vaughan continue heading the Laminates and Converted Products businesses respectively. The last year has been difficult for the Group and we acknowledge the continuing effort and commitment of all our employees. OUTLOOK The achievement of a more acceptable result in 2002 rests upon our success in stemming the losses in both the United States and in the Metallised Paper businesses, which together lost £6.7m before central costs in 2001. Significant progress is being made during the current year towards our objective of eliminating these losses. In the Converted Products division we have invested in excess of £6.0m, from which we expect improving returns in 2002. We are confident that the management changes and other initiatives will produce an improvement in performance. Trading conditions are expected to remain competitive across the Group. We have responded with a series of measures. The site rationalisation programme has reduced our cost base by some £6.0m per annum, with the full benefits expected in the current year. In addition, raw material prices have recently softened which will assist margins. Our ability to source a standard range of foil products from Shen Yong will also be advantageous. The Group is currently trading in line with our expectations. ENDS Enquiries: David Hudd, Non Executive Chairman Tel: 020 7831 3113 Derek Ashley, Chief Executive Tel: 020 7831 3113 API Group plc Tim Spratt Financial Dynamics Tel: 020 7831 3113 GROUP PROFIT & LOSS ACCOUNT for the year ended 30 September 2001 2001 2000 Continuing Operations Continuing Operations Before Exceptional Total Before Exceptional Total Exceptional Items and Exceptional Items and Items and Goodwill Items and Goodwill Goodwill Goodwill Amortisation Amortisation Amortisation Amortisation £'000 £'000 £'000 £'000 £'000 £'000 Turnover 183,440 - 183,440 188,772 - 188,772 Cost of sales (149,764) (21,255)(171,019) (142,930) (12,879) (155,809) including - (846) (846) - (1,112) (1,112) goodwill amortisation Gross profit 33,676 (21,255) 12,421 45,842 (12,879) 32,963 Distribution (8,249) (88) (8,337) (7,800) - (7,800) costs Ad- ministrative(28,328) (4,067) (32,395) (25,780) (2,740) (28,520) expenses Operating (2,901) (25,410) (28,311) 12,262 (15,619) (3,357) (loss)/profit Profit/ (loss) on disposal of land and - 33 33 - (97) (97) buildings (Loss)/profit on ordinary activities (2,901) (25,377) (28,278) 12,262 (15,716) (3,454) before interest and taxation Net interest (1,642) - (1,642) (677) - (677) expense (Loss)/profit on ordinary activities (4,543) (25,377) (29,920) 11,585 (15,716) (4,131) before taxation Taxation 398 - 398 (2,994) 1,109 (1,885) (Loss)/profit on ordinary activities (4,145) (25,377) (29,522) 8,591 (14,607) (6,016) after taxation Profit attributable to minority (984) - (984) (1,144) - (1,144) equity interests (Loss)/profit attributable to (5,129) (25,377) (30,506) 7,447 (14,607) (7,160) Ordinary shareholders Ordinary - - - (5,060) - (5,060) dividends Balance transferred (from)/to (5,129) (25,377) (30,506) 2,387 (14,607) (12,220) reserves Earnings per ordinary 25p share Basic (15.4)p (91.7)p 22.4p (21.5)p Diluted (15.4)p (91.7)p 22.4p (21.5)p Dividends per ordinary 25p share 0p 0p 15.19p 15.19p Basic weighted average ordinary shares 33,262,578 33,262,578 The weighted average number of shares excludes the 588,000 shares owned by the API Group plc No. 2 Employee Benefit Trust GROUP BALANCE SHEET at 30 September 2001 2001 2000 £'000 £'000 Fixed assets Intangible assets 6,859 20,162 Tangible assets 66,054 61,722 Investments 435 1,499 73,348 83,383 Current assets Stocks 23,189 30,355 Debtors 42,852 52,444 Short term investments 1,283 - Cash at bank and in hand 7,088 8,502 74,412 91,301 Creditors - amounts falling due within one year (69,482) (63,783) Net current assets 4,930 27,518 Total assets less current liabilities 78,278 110,901 Creditors - amounts falling due after more than one year (205) (304) Provisions for liabilities and charges (1,366) (4,197) Deferred credit - government grants (1,007) (274) 75,700 106,126 Minority interests (6,630) (7,083) Total net assets 69,070 99,043 Share capital and reserves Called up share capital 8,463 8,463 Share premium account 50,563 50,563 Revaluation reserve 2,616 2,616 Capital redemption reserve 549 549 Profit and loss account 6,879 36,852 Equity shareholders' funds 69,070 99,043 GROUP CASH FLOW STATEMENT for the year ended 30 September 2001 2001 2000 £'000 £'000 Reconciliation of operating loss to net cash inflow from operating activities Operating loss (28,311) (3,357) Amortisation and depreciation less government 8,058 8,560 grants Impairment charge against intangible assets 12,850 - Impairment charge against tangible fixed assets and investments 1,693 7,806 Loss on disposal of fixed assets other than land and buildings 161 110 Decrease/(increase) in stocks 7,302 (8,423) Decrease/(increase) in debtors 9,182 (413) (Decrease)/increase in creditors (1,326) 1,037 (Decrease)/increase in provisions (2,837) 3,383 Net cash inflow from operating activities 6,772 8,703 2001 2001 2000 2000 £'000 £'000 £'000 £'000 Cash flow statement Net cash inflow from operating activities 6,772 8,703 Returns on investments and servicing of finance Interest paid (1,807) (820) Interest received 165 143 Dividends paid to minority interests (1,490) (3,132) (529) (1,206) Taxation UK (308) (2,880) Overseas (500) (808) (1,067) (3,947) Capital expenditure and financial investment Payments to acquire tangible fixed assets (13,378) (12,648) Receipts from sale of tangible fixed 1,017 1,390 assets Payments to acquire investments - (629) Receipt of government grants 860 (11,501) 274 (11,613) Acquisitions and disposals (Note C) (139) (3,798) Equity dividends paid (2,874) (5,076) Net cash outflow before use of liquid resources and financing (11,682) (16,937) Management of liquid resources Increase in short term investments (1,283) - (China) Increase in short term borrowing 12,016 10,733 18,782 18,782 Financing Capital element of finance lease rental payments - (33) (Decrease)/increase in cash in the period (949) 1,812 Exchange movement 51 859 Balance sheet movement in net cash (898) 2,671 GROUP CASH FLOW STATEMENT for the year ended 30 September 2001 Notes to the cash flow statement A. Analysis of net debt Cash Exchange 2000 Flow Difference 2001 £'000 £'000 £'000 £'000 Cash at bank and in hand 8,502 (1,426) 12 7,088 Bank overdraft (1,762) 516 - (1,246) 6,740 (910) 12 5,842 Short term investment in Chinese Government Bonds - 1,283 - 1,283 Short term borrowing (18,782) (12,055) 39 (30,798) (12,042) (11,682) 51 (23,673) B. Reconciliation of net cash flow to movement in net debt 2001 2000 £'000 £'000 (Decrease)/increase in net cash (910) 1,812 Repayment of capital elements of finance leases - 33 Short term investment in Chinese Government Bonds 1,283 - Short term borrowings (12,055) (18,782) Change in net debt resulting from cash flows (11,682) (16,937) Exchange differences 51 859 Movement in net debt (11,631) (16,078) Net (debt)/funds at start of year (12,042) 4,036 Net debt at end of year (23,673) (12,042) C. Analysis of the net outflow of cash in respect of the acquisition of subsidiary undertakings and businesses Gold Total Impressions £'000 £'000 2001 Cash 139 139 consideration paid Net outflow in 139 139 respect of acquisitions Van Leer Metallised Paper Caerphilly Gold Chromagem Goodstrack Impressions Total £'000 £'000 £'000 £'000 £'000 2000 Cash 1,811 180 128 1,764 3,883 consideration paid Cash at bank and in hand acquired (85) - - - (85) Net outflow in respect of acquisitions 1,726 180 128 1,764 3,798 OTHER STATEMENTS 12 months 12 months to to 30 30 September September 2001 2000 £'000 £'000 Statement of total recognised gains and losses Loss attributable to members of the parent company (30,506) (7,160) Currency translation differences on foreign currency net investments 533 4,118 Total gains and losses recognised since last annual report and accounts (29,973) (3,042) Reconciliation of movements in shareholders' funds Loss attributable to members of the parent company (30,506) (7,160) Dividends - (5,060) Currency translation differences on foreign currency net investments 533 4,118 Net decrease to shareholders' funds (29,973) (8,102) Opening shareholders' funds 99,043 107,145 Closing shareholders' funds 69,070 99,043 NOTES SEGMENTAL ANALYSIS Analysis of turnover by destination 2001 2000 £'000 £'000 United Kingdom 81,930 88,145 Continental Europe 51,046 49,110 Americas 30,870 33,031 Rest of World 19,594 18,486 183,440 188,772 Analysis of turnover, (loss) / profit before interest and tax, and net assets by origin (Loss) / profit Net before Turnover operating assets interest and tax 2001 2000 2001 2000 2001 2000 £'000 £'000 £'000 £'000 £'000 £'000 United Kingdom 138,192 141,774 (983) 7,608 68,827 70,512 Continental Europe 2,580 2,506 87 195 950 494 Americas 29,853 33,388 (4,590) 1,839 17,344 25,930 Rest of World 12,815 11,104 2,585 2,620 5,480 7,527 183,440 188,772 (2,901) 12,262 92,601 104,463 Exceptional items and goodwill - - (25,377) (15,716) - - amortisation Non operating assets - - - - (23,531) (5,420) 183,440 188,772 (28,278) (3,454) 69,070 99,043 Analysis of turnover, (loss) / profit before interest and tax, and net assets by activity (Loss) / profit Net before Turnover operating assets interest and tax 2001 2000 2001 2000 2001 2000 £'000 £'000 £'000 £'000 £'000 £'000 Foils and laminates 111,229 116,655 2,382 12,655 56,702 68,268 Metallised paper 24,377 20,774 (2,872) (1,706) 8,364 8,554 Converted products 47,834 51,343 197 3,904 27,535 27,641 Central costs - - (2,608) (2,591) - - 183,440 188,772 (2,901) 12,262 92,601 104,463 Exceptional items and goodwill - - (25,377) (15,716) - - amortisation Non operating assets - - - - (23,531) (5,420) 183,440 188,772 (28,278) (3,454) 69,070 99,043 The comparative figures have been reclassified to reflect the revised presentation for the current year. NOTES Operating loss 12 months to 12 months to 30 September 30 September 2000 2001 £'000 £'000 Exceptional items charged against operating loss comprise Restructuring of operating businesses 10,650 12,509 Impairment of intangible assets 12,850 - Provision against own shares held in ESOP 1,064 959 Other - 1,489 24,564 14,507 Basis of preparation The accounts have been prepared on the basis of the accounting policies as set out in the 2000 Annual Report and Accounts. Publication of abridged accounts The preliminary announcement figures for the year ended 30 September 2001 and the comparative figures for the year ended 30 September 2000 are an abridged version of the Group's statutory accounts which carry an unqualified audit report and do not contain a statement under S237 (2) or (3) of the Companies Act 1985. The Group's audited statutory accounts for the year ended 30 September 2001 will be filed in due course with the Registrar of Companies. The Group's audited statutory accounts for the year ended 30 September 2000 have been filed with the Registrar of Companies. The Annual Report and Accounts for the year ended 30 September 2001 will be posted to shareholders by 8 January 2002 prior to the Annual General Meeting on 5 February 2002. Copies of the Annual Report and Accounts will be available to members of the public from 9 January 2002 at the Group's registered office at Second Avenue, Poynton Industrial Estate, Poynton, Cheshire SK12 1ND.

Companies

Abrdn Property Income Trust Limited (API)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today