Interim Results

Alumasc Group PLC 12 February 2002 THE ALUMASC GROUP PLC- INTERIM ANNOUNCEMENT • Alumasc, the high specification engineering and building products group, announces a much improved performance in the half year to 31 December 2001 with the management team, under the direction of Paul Hooper, who joined Alumasc as Group Managing Director in April 2001, making good progress on the path of recovery and profit growth. • On turnover from continuing businesses up 5.4% at £56.2 m, pre-tax profit was 56.6% ahead at £3.3 m and EPS 66.6% higher at 6.5p, additionally reflecting the Group's share repurchase activity in the prior year. • With a view to restoring satisfactory dividend cover, the Directors have declared an unchanged interim dividend per share of 2.45p. • The Engineering Division increased its profit by 38% to £2.1 m on turnover 5.2% ahead at £39.2 m. The Precision Components' businesses moved ahead strongly whilst the Industrial Products companies also contributed to the stronger first half performance, including recovery in sales to the brewing industry. • Investment continued in the period in line with the plan to double the capacity of Alumasc Precision Components in the medium term. • The Building Products Division had a good half year with sales increasing by 5.7% to £16.9 m and profit 55% ahead at £1.4 m. Alumasc Interior Building Products and Alumasc Construction Products had excellent performances following new product and market initiatives combined with improved operational efficiencies. • John McCall, Chairman, stated 'Despite the general economic uncertainty, the actions taken to strengthen our business and the continuing health of our order books give encouragement for further progress in the second half year.' Enquiries: The Alumasc Group 01536-383 844 John McCall (Chairman) Paul Hooper (Group Managing Director) Bankside Consultants Limited Charles Ponsonby 020-7444 4166 CHAIRMAN'S STATEMENT OVERVIEW Progress in our core business and recovery from the set-backs of the previous year have resulted in a much improved performance in the half year to 31 December 2001. Turnover of £56.2 million from continuing businesses was £2.9 million (5.4%) ahead of the previous year. Profit before tax of £3.3 million was £1.2 million (56.6%) ahead, benefiting from business improvement plans implemented in 2001 and growth in turnover. Earnings per share of 6.5p were 66.6% higher, reflecting the higher profit and the fewer shares in issue following the Group's share repurchase activity in the prior year. The period witnessed both the bringing into production of new work which had been under development during the previous year and a more general recovery in activity. In the comparable period last year, the Group had experienced the worst of its difficulties in relation to the Rover Group, the absence of demand from its brewery customers, and the effects of exceptionally adverse weather conditions on UK construction. Against this background, a creditable result was achieved in the half year with the management team, under the direction of Paul Hooper, who joined Alumasc as Group Managing Director in April 2001, making good progress on the path of recovery and profit growth. OPERATIONS Both divisions of the Group moved ahead of the prior year following a sustained focus on operational efficiencies combined with increased sales. The Engineering division profit of £2.1 million increased by £0.6 million (38%) on turnover of £39.2 million, 5.2% ahead. The Precision Components' businesses moved ahead strongly, recovering much of the Rover-related volume loss of the previous year. During this period, Land Rover launched the Freelander in the USA and Rover Cars experienced increased demand from new product launches. The division also commenced volume supply to new customers such as BMW, Filtronic and Giroflex. The recovery in demand from established customers combined with new product introductions put pressure on operations, causing cost over-runs which will be brought under control as the high level of activity continues into the second half year. Investment in the division continued in line with the plan to double the capacity of Alumasc Precision Components in the medium term. The Industrial Products companies also contributed to the stronger first half performance, including recovery in sales to the brewing industry. Operational improvements contributed to the performance of our brewery related companies and Interbrew's divestment of Carling Brewers to Coors Brewing Company should bring further stability into this sector. Bissell was restructured to meet the increasing challenge of imported low cost spring products and Brock Metals maintained its strong performance despite the weak industrial environment, which saw continued rationalisation of the supply side in the metals sector. The Building Products' division had a good half year with sales increasing by 5.7% to £16.9 million and profit of £1.4 million ahead by £0.5 million (55%). The division benefited from concerted activity to improve operational performance as well as the absence of the abominable weather conditions of the previous year. Actions to reduce costs included the closure of three satellite manufacturing operations in Alumasc Exterior Building Products and headcount reductions throughout this division. Alumasc Interior Building Products and Alumasc Construction Products had excellent performances following new product and market initiatives combined with improved operational efficiencies. Leonardo, the Group's 70% owned internet services business, continued to make progress, achieving its interim targets in the half year. The business improvement plans implemented during the first half year should benefit profits in the second half, supported by order books which continue to move ahead of last year. Our ability to win new customers such as BMW, Filtronic and Caterpillar is testament to the Group's differentiated market position. Our businesses will continue to work closely with their customers in order to meet the ever increasing requirements of our chosen market place. FINANCIAL In common with many other businesses, Alumasc moved to defined contribution pension arrangements for new employees in the late 1990's, when its two defined benefit schemes were closed to new entrants. The profit for the half year contains an increased pension charge based on actuarial advice following the triennial valuation of one of the two schemes. Net borrowings rose by £2.2 million to £6.3 million in the half year to 31 December 2001, as a result of continued investment to expand Alumasc Precision Ltd and higher stocks reflecting increased activity levels. Gearing at 31 December 2001 was 18.6% (30 June 2001 : 12.6%). The Group has agreed £6.5 million of fixed asset-backed credit lines with its bankers, with the intention of transferring part of its overdraft borrowings to this facility over the next 12 months. The first tranche of £1.6 million of such borrowings was drawn down in December 2001. PEOPLE I am delighted to welcome Richard Saville as a non-executive Director of Alumasc with effect from 1 January 2002. His knowledge of the Industrial and Construction sectors, most recently as Finance Director of George Wimpey plc, will be of real value in the development of our Group. DIVIDEND AND PROSPECTS With a view to restoring satisfactory dividend cover, the Directors have declared an unchanged interim dividend of 2.45p per share, which will be payable on 8 April 2002 to shareholders on the register at close of business on 8 March 2002. Despite the general economic uncertainty, the actions taken to strengthen our business and the continuing health of our order books give encouragement for further progress in the second half year. J S McCall Chairman & Chief Executive 12 February 2002 UNAUDITED CONSOLIDATED BALANCE SHEET at 31 December 2001 31 December 31 December 30 June 2001 2000 2001 £000 £000 £000 Fixed assets Intangible assets 68 347 74 Tangible assets 30,850 28,642 29,120 Investments 452 462 432 ___________ ___________ _________ 31,370 29,451 29,626 ___________ ___________ _________ Current assets Stocks 12,654 11,940 10,896 Debtors 22,412 25,197 23,579 ___________ ___________ _________ 35,066 37,137 34,475 ___________ ___________ _________ Creditors: amounts falling due within one year Trade and other creditors 26,195 24,973 25,893 Taxation 1,331 1,564 495 Proposed dividend 850 892 2,098 ___________ ___________ _________ 28,376 27,429 28,486 ___________ ___________ _________ ___________ ___________ _________ Net current assets 6,690 9,708 5,989 ___________ ___________ _________ Total assets less current liabilities 38,060 39,159 35,615 Creditors: amounts falling due after more than one year 3,952 3,187 2,794 Provisions for liabilities and charges 346 170 451 Equity minority interest 92 187 114 ___________ ___________ _________ Net assets 33,670 35,615 32,256 ___________ ___________ _________ Capital and reserves Called up share capital 4,352 4,570 4,352 Share premium 26,907 26,907 26,907 Revaluation reserve 2,168 2,271 2,168 Capital redemption reserve 693 475 693 Profit and loss account (450) 1,392 (1,864) ___________ ___________ _________ Shareholders' funds (note 8) 33,670 35,615 32,256 ___________ ___________ _________ UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT for the half year to 31 December 2001 Half year 31 December 2001 ________________ Continuing activities £000 Turnover (note 2) 56,200 ________________ Operating profit / (loss) 3,491 Share of operating profit in associates 20 Loss on sale of business activities - Interest (226) ________________ Profit / (loss) on ordinary activities before taxation (note 2) 3,285 Taxation (charge) / credit (note 3) (1,020) ________________ Profit / (loss) on ordinary activities after taxation 2,265 Equity minority interest (1) ________________ Profit / (loss) for the financial period attributable to the members of the parent company 2,264 Dividends 850 ________________ Retained profit / (loss) for the financial period 1,414 ________________ Earnings per share and diluted earnings per share (note 4) 6.5p ________________ Dividend per share (note 5) 2.45p ________________ STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES There are no recognised gains or losses other than the profits attributable to shareholders of the Company of £2,264,000 for the half year to 31 December 2001 (£1,231,000 for the half year to December 2000 and £2,145,000 for the year to 30 June 2001). Half year Year 31 December 2000 30 June 2001 _________________________________________ ________________________________________ Continuing Discontinued Continuing Discontinued activities activities activities activities Total Total £000 £000 £000 £000 £000 £000 53,331 4,847 58,178 108,987 7,607 116,594 ___________ ___________ _________ __________ ___________ _________ 2,148 (392) 1,756 4,372 (482) 3,890 33 - 33 8 - 8 - - - - (562) (562) (83) - (83) (328) - (328) ___________ ___________ _________ __________ ___________ _________ 2,098 (392) 1,706 4,052 (1,044) 3,008 (634) 122 (512) (1,085) 157 (928) ___________ ___________ _________ __________ ___________ _________ 1,464 (270) 1,194 2,967 (887) 2,080 37 - 37 65 - 65 ___________ ___________ _________ __________ ___________ _________ 1,501 (270) 1,231 3,032 (887) 2,145 892 - 892 2,948 - 2,948 ___________ ___________ _________ __________ ___________ _________ 609 (270) 339 84 (887) (803) ___________ ___________ _________ __________ ___________ _________ 3.9p (0.7)p 3.2p 8.3p (2.5)p 5.8p ___________ ___________ _________ __________ ___________ _________ 2.45p 8.5p _________ _______-------_ UNAUDITED CONSOLIDATED CASH FLOW STATEMENT for the half year to 31 December 2001 Half Year Half Year Year 31 December 31 December 30 June 2001 2000 2001 £000 £000 £000 Cash inflow from operating activities + 3,376 2,207 6,307 ___________ ___________ _________ Returns on investments and servicing of finance Net interest (226) (83) (328) Dividends paid to minority shareholders (23) - - ___________ ___________ _________ (249) (83) (328) ___________ ___________ _________ Taxation UK corporation tax paid (56) (825) (2,325) ___________ ___________ _________ Capital expenditure and financial investment Purchase of tangible fixed assets (3,687) (2,215) (5,052) Proceeds from sale of tangible fixed assets 132 470 547 ___________ ___________ _________ (3,555) (1,745) (4,505) ___________ ___________ _________ Acquisitions and disposals Proceeds from sale of business activities 380 - 1,220 Purchase of subsidiary undertaking - - (6) Purchase of business activities - - (314) ___________ ___________ _________ 380 - 900 ___________ ___________ _________ ___________ ___________ _________ Equity dividends paid (2,098) (2,358) (3,208) ___________ ___________ _________ Financing Repurchase of ordinary share capital - (3,540) (5,752) New finance leases 1,558 - - Repayment of debt - (477) (784) ___________ ___________ _________ 1,558 (4,017) (6,536) ___________ ___________ _________ Decrease in cash in the period (note 7) (644) (6,821) (9,695) ___________ ___________ _________ + Reconciliation of operating profit to net cash inflow from operating activities Operating profit 3,491 1,756 3,890 Depreciation 1,820 1,659 3,576 Amortisation of goodwill 6 9 5 Goodwill impairment - - 318 Loss / (profit) on disposal of tangible fixed assets/ 5 (66) (108) investments Increase in working capital (1,753) (847) (938) Warranty and other provisions (193) (304) (436) ___________ ___________ _________ 3,376 2,207 6,307 ___________ ___________ _________ NOTES ON THE UNAUDITED ACCOUNTS at 31 December 2001 1. BASIS OF PREPARATION The interim financial statements for the half year ended 31 December 2001 have been prepared in accordance with the accounting policies detailed in the 2001 Annual Report & Accounts except for the change in accounting policy as disclosed in note 6. The financial information for the year ended 30 June 2001 is an abridged version of the financial statements filed with the Registrar of Companies, on which the auditors gave an unqualified report. The financial information for the half year ended 31 December 2000 is restated for business activities discontinued in the six months to 30 June 2001. The interim report is being posted to shareholders and copies are available to the public at the registered office, Burton Latimer, Kettering, Northamptonshire NN15 5JP. 2. TRADING Half year Half year 31 December 2001 31 December 2000 Turnover Profit Turnover Profit £000 £000 £000 £000 Engineering Products 39,244 2,141 37,301 1,550 Building Products 16,906 1,426 15,995 919 Leonardo 50 (56) 35 (288) _______ ______ ______ ______ 56,200 3,511 53,331 2,181 Discontinued - - 4,847 (392) ______ ______ ______ ______ 56,200 3,511 58,178 1,789 ______ ______ Interest (226) (83) ______ ______ Profit before tax 3,285 1,706 ______ ______ 3. TAXATION The taxation provided is based on an estimated effective rate for the year. The increased effective rate reflects the deferred tax recognised under Financial Reporting Standard 19 (see note 6) on timing differences. Half Year Half Year Year 31 December 31 December 30 June 2001 2000 2001 £000 £000 £000 Corporation tax 891 512 928 Deferred tax 129 - - _____ _____ _____ 1,020 512 928 _____ _____ _____ 4. EARNINGS PER SHARE Earnings per share is based on the weighted average number of ordinary shares in issue for the period of 34,816,788 (31 December 2000: 38,101,476; year ended 30 June 2001: 36,718,322). 5. DIVIDENDS The directors have declared an interim dividend per share of 2.45p (2000: 2.45p) which will be paid on 8 April 2002 to shareholders on the register at the close of business on 8 March 2002. 6. CHANGE IN ACCOUNTING POLICY Alumasc has adopted Financial Reporting Standard 19 'Deferred Tax' in the period. The main change arising from the adoption of this standard is that deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. The effect of this change on previous periods is insignificant; thus neither net assets at 31 December 2000 and 30 June 2001 nor profit after tax for the period to 31 December 2000 and year to 30 June 2001 have been adjusted. 7. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET (DEBT)/CASH Half Year Half Year Year 31 December 31 December 30 June 2001 2000 2001 £000 £000 £000 Decrease in cash in period (644) (6,821) (9,695) Cash (inflow) / outflow from change in debt and lease financing (1,558) 477 784 ______ ______ ______ Movement in net debt in the period (2,202) (6,344) (8,911) Net (debt) / cash at start of period (4,072) 4,839 4,839 ______ ______ ______ Net debt at end of period (6,274) (1,505) (4,072) ______ ______ ______ 8. RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS Half Year Half Year Year 31 December 31 December 30 June 2001 2000 2001 £000 £000 £000 Retained profit / (loss) for the financial 1,414 339 (803) period Repurchase of shares - (3,540) (5,752) Exchange difference - - (5) ______ ______ ______ Net addition to / (reduction in) shareholders' funds 1,414 (3,201) (6,560) Opening shareholders' funds 32,256 38,816 38,816 ______ ______ ______ Closing shareholders' funds 33,670 35,615 32,256 ______ ______ ______ This information is provided by RNS The company news service from the London Stock Exchange

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