Interim Results - 6 Months to 30th September 1999

Associated British Engineering PLC 18 November 1999 Interim Report for the Six Months ended 30th September 1999 CHAIRMAN'S STATEMENT The Group made a pre-tax loss of £339,000 in the six months to 30th September 1999 against a profit of £58,000 in the comparable period last year. Danway our Middle East business performed well with an increase in operating profits of 22%. The results for the UK subsidiaries however, were disappointing. These are a reflection of the slow start to the year by British Polar Engines and the drop in sales in the Catering Equipment Division, which were identified in my statement at the Annual General Meeting on 1st September 1999. Although the Board is confident about the longer-term prospects for British Polar Engines, it does not foresee a short-term improvement in the outlook for the Catering Equipment Division. As shareholders are aware conditional agreement has been reached for the sale of Danway, which is subject to shareholders' approval at an Extraordinary General Meeting to be held on 22nd November 1999. The Board has also announced its intention to dispose of the Catering Equipment Division as soon as possible and to investigate suitable acquisitions in the engineering sector to complement the activities of British Polar Engines. If a suitable target is not identified, the Board will consider other options, including the possibility of returning surplus funds to shareholders. J.H. Davies Chairman 78 Chapel Street, Thatcham, Berkshire, RG18 4QN Unaudited group balance sheet as at 30th September 1999 Audited 30.9.99 30.9.98 year to £000s £000s 31.3.99 £000s FIXED ASSETS - Intangible assets - negative - (54) goodwill 3,605 Tangible assets 3,062 3,239 ------ ------ ------ 3,605 3,062 3,185 ------ ------ ------ CURRENT ASSETS 6,582 Stock 6,534 6,121 588 Debtors - amounts falling due after 403 427 one year 14,345 Debtors - amounts falling due within 15,300 13,510 one year 318 Cash at bank and in hand 143 580 ------- ------ ------ 21,833 22,380 20,638 17,946 Creditor - amounts falling due after 19,038 16,819 ------- one year ------ ------ 3,887 Net current assets 3,342 3,819 ------- ------ ------ 7,492 Total Assets less current 6,404 7,004 liabilities 702 Credits - amounts falling due within 471 794 one year 42 Provisions for liabilities and 40 45 ------ charges ------ ------ 6,748 Net assets 5,893 6,165 ====== ====== ====== CAPITAL AND RESERVES 3,339 Called up share capital 3,339 3,339 5,038 Share premium account 5,038 5,038 370 Revaluation reserve - 370 36 Other reserves 36 36 (2,074) Profit and loss account (2,558) (2,655) ------ ------ ------ 5,997 Equity shareholders' funds 5,143 5,416 712 Non Equity shareholders' funds 712 712 ------ ----- ------ 6,709 Total shareholders' funds 5,855 6,128 39 Equity minority funds 38 37 ------ ------ ------ 6,748 5,893 6,165 ===== ====== ====== Statement of Total Recognised Gains and Losses 392 (Loss)/profit for the period (354) 39 121 Foreign Exchange adjustment (104) (127) ---- ----- ----- 513 Total recognised gains and losses (458) (88) for the period ==== ==== ==== The foreign exchange adjustment represents gains/(losses) during the period relating to the restatement of the balance sheet results of Danway, trading in the United Arab Emirates, using exchange rate at 30th September 1999. Unaudited Group Cash Flow Statement for the six months to 30th September 1999 Audited 6 6 Year to months months 31.3.99 to to 3.9.99 30.9.98 £000s £000s £000s OPERATING ACTIVITIES 2,158 Cash flow from operating activities (249) 248 ------ ------ ------ RETURNS ON INVESTMENTS AND SERVICING OF FINANCE 207 Finance income received 83 103 (982) Finance costs paid (517) (459) (39) Finance cost element of Finance (20) - lease rental payments (40) Preference dividends paid (26) (20) ----- ----- ----- (854) Net cash flow from returns of (480) (376) ----- investments and servicing of finance ----- ----- TAXATION (10) UK Taxation paid (5) (5) ----- ------ ------ CAPITAL EXPENDITUE AND FINANCIAL INVESTMENT (847) Purchase of tangible fixed assets (141) (253) 1 Net proceeds on sale of tangible - - ----- fixed assets ----- ----- (846) (141) (253) ----- ----- ----- 448 Cash outflow before financing (875) (386) ----- ----- ----- FINANCING (185) Decrease in debt (93) (150) (142) Capital element of finance lease (116) (15) ----- payments ----- ----- (327) (209) (165) ----- ----- ----- 121 Decrease in cash in the period (1,084) (551) ===== ===== ===== Unaudited results for the six months to 30th September 1999 Audited 6 6 year months months To to to 31.3.99 30.9.99 30.9.98 £000s £000s £000s 37,291 Turnover 18,110 17,580 ------ ------ ------ 1,246 Operating profit 108 414 - Profit attributable to interest in 7 - ------ associated undertakings ----- ------ 1,246 Profit on ordinary activities before 115 414 finance costs (814) Net Finance costs (454) (356) ------ ----- ------ 432 (Loss)/profit on ordinary activities (339) 58 before taxation (10) Taxation - (5) ------ ------ ------ 422 (Loss)/profit on ordinary activities (339) 53 after taxation (30) Equity minority interest (15) (14) ------ ------ ------ 392 (Loss)/profit for the period (354) 39 (40) Dividends (including in respect of (26) (20) ------ non-equity shares) ------ ------ 352 Retained (loss)/profit (380) 19 ====== ====== ====== Basic (losses)/earnings per ordinary share (March 1999 and September 1998 26.8p restated see note 1) (28.93)p 1.45p ===== ====== ===== Dividends per share paid and proposed: 4.9p 7% preference 3.5p 2.4p 8.0p 8% preference 4.0p 4.0p - Ordinary - - Analysis of turnover, profit before taxation and net assets: Turnover (Loss)/profit Net Assets before taxation 1999 1998 1999 1998 1999 1998 £000s £000s £000s £000s £000s £000s Middle East 12,848 10,042 731 599 5,541 5,070 operations Catering 4,281 5,822 (283) 16 (4,663) (3,798) equipment British Polar 898 1,081 (49) 109 2,113 2,119 Engines ABE Diesels 83 635 (20) (84) (159) (67) ------ ------ ------ ------ ------ ------ 18,110 17,580 379 640 2,832 3,324 Common - - (271) (226) 3,061 2,841 expenses/net assets ------ ------ ------ ------ ------ ------ Continuing 18,110 17,580 5,893 6,165 operations ====== ====== ====== ====== Operating 108 414 profit Net finance 7 - costs Finance costs (454) (356) ----- ----- Profit before taxation (339) 58 ===== ===== Notes: 1. Earnings per ordinary share are calculated: 6 months to Number of shares of (Losses)/earnings Nominal value 30.9.99 30.9.98 30.9.99 30.9.98 £000s £000s £2.00 1p Attributable (380) 19 1,313,428 262,686,563 (loss)/profit On 8th September 1999 the shareholders approved the consolidation and subdivision of the ordinary share capital of the company. The effect of this is that 200 1p ordinary shares have been consolidated into one £2 ordinary share. The basic earnings per share for the year to 31st March 1999 and the six months to 30th September 1998 have been restated on the face of the profit and loss account in order to take this into account. 2. The comparative figures for the year to 31st March 1999 are abridged from the accounts for that year and do not constitute full accounts within the meaning of Section 240 of the Companies Act 1985 (as amended). Statutory accounts for that period, on which the Auditors gave an unqualified opinion, have been delivered to the Registrar of Companies. 3. This interim report has been prepared in accordance with the accounting policies adopted in the latest published accounts. This interim report has neither been audited nor reviewed by our auditors. Enquiries: M J Barry, (Managing Director and Chief Executive) Tel 01635 872337

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