Interim Results
Hill & Smith Hldgs PLC
6 June 2001
HILL & SMITH HOLDINGS PLC
INTERIM RESULTS
Hill & Smith Holdings PLC ('Hill & Smith' or the 'Company'), the building,
construction and industrial products group, is pleased to announce its interim
results for the six months ended 31 March 2001.
Highlights
* Turnover at £90.6 million (2000: £28.7 million)
* Profit before exceptionals, interest and goodwill at £6.1 million
(2000: £2.0 million)
* Earnings per share before exceptionals and goodwill of 4.5p (2000: 3.2p)
* Interim dividend unchanged at 2.1p per share
* Healthy increase in operating cash flow
* Successful integration of Ash & Lacy businesses
* Debt reduction programme ahead of schedule
Chairman of Hill & Smith, David Winterbottom, said: 'During this period the
acquisition of Ash & Lacy plc was completed and the results of the former Ash
& Lacy companies have been consolidated from 1st November 2000, when the bid
was declared unconditional. The benefits of the acquisition are already
beginning to enhance the enlarged group's performance.
'The integration of the Ash & Lacy companies into the group has been achieved
ahead of our expectations and I am pleased to report that our post acquisition
due diligence review has revealed no surprises in respect of the trading
activities, although we have taken a prudent view of the fixed assets
acquired.
'Our businesses have commenced the second half of the year with market
conditions varying across the group. Additional sales of surplus properties
are likely in the rest of 2001, thus making further inroads into the level of
debt, which is being managed well ahead of expectations.
'Overall we believe that the outcome for the full 15 months will be
satisfactory, given no deterioration in economic conditions.'
For further information, please contact:
Hill & Smith Holdings PLC
David Winterbottom, Chairman Head Office: 01902 357910
David Grove, Chief Executive D.Grove mobile: 07973 325667
Rawlings Financial PR Limited 01756 770376
John Rawlings
Catriona Valentine
CHAIRMAN'S STATEMENT
Results
I am pleased to report the interim results for the six months to 31st March
2001. During this period the acquisition of Ash & Lacy plc was completed and
the results of the former Ash & Lacy companies have been consolidated from 1st
November 2000, when the bid was declared unconditional. The benefits of the
acquisition are already beginning to enhance the enlarged group's performance.
Sales for the six month period were £90.6 million (2000: £28.7 million) and
profit before exceptional items, interest and goodwill amortisation was £6.1
million (2000: £2.0 million). Interest costs were £2.3 million (2000: £0.3
million). Profit before exceptional items, goodwill amortisation and tax was
£3.8 million (2000: £1.7 million). There were substantial net exceptional
charges in the period of £4.8 million in respect of costs related to the Ash &
Lacy plc takeover, closure of the Ash & Lacy plc head office and various
closure and reorganisation costs. These exceptional costs have been incurred
to realise the financial benefits of the takeover as soon as possible.
The adjusted earnings per share for the six month period increased to 4.5p
(2000: 3.2p).
Operations
The integration of the Ash & Lacy companies into the group has been achieved
ahead of our expectations and I am pleased to report that our post acquisition
due diligence review has revealed no surprises in respect of the trading
activities, although we have taken a prudent view of the fixed assets
acquired.
The recent investments (both organic and acquisitions) in the Infrastructure
Products Group continue to yield increasing returns and the market trends
reflecting increased government spending are very positive for our largest
division. A number of capital investment projects were successfully completed
in the period which will benefit future performance.
The acquisition of the galvanising activities within Ash & Lacy has resulted
in a rationalisation of the group's galvanising capacity. Two plants have
been closed, thus eliminating duplication of facilities in the West Midlands
and South Wales. The remaining businesses in the construction and building
products division continue to operate against a background of challenging
market conditions.
In the industrial products division the individual performances have been
mixed. Ash & Lacy Perforators has invested in additional capacity to meet the
demands of its major customers. On the other hand, our stockholding
businesses have suffered from poor market conditions during the period. In
general terms market conditions remain tough.
The net cash flow from operating activities during the period before
exceptional items was £11.4 million (2000: (£0.3) million) which included a
net reduction of £2.1 million in working capital.
Gearing
At 31st March 2001 the level of net borrowings had been reduced to £66.8
million from a peak level of £78.0 million immediately following the Ash &
Lacy acquisition. This represents gearing of 198%. Furthermore, on 25th May
2001 four group properties were sold under a sale and leaseback arrangement
for a gross sum of £8.9 million. This transaction has resulted in a reduction
in our net indebtedness to below £60 million.
Dividends
I am pleased to report that an interim dividend of 2.1p per share (2000: 2.1p)
has been declared by the Board. Based on the adjusted earnings per share of
4.5p, this gives a dividend cover of 2.1 times (2000 full year: 1.9 times).
All ordinary shares rank for this dividend.
Outlook
Our businesses have commenced the second half of the year with market
conditions varying across the group. Additional sales of surplus properties
are likely in the rest of 2001, thus making further inroads into the level of
debt, which is being managed well ahead of expectations.
Overall we believe that the outcome for the full 15 months will be
satisfactory, given no deterioration in economic conditions.
David S Winterbottom
Chairman
6 June 2001
GROUP PROFIT AND LOSS ACCOUNT
For the six months to 31 March 2001 compared with the six months to 31 March
2000
Six months to Six months to
31 March 2001 31 March 2000
Before Before
exceptional exceptional
items and items and
goodwill Goodwill goodwill
amortis- amortis- Exceptional amortis-
ation ation items Total ation Total
£'000 £'000 £'000 £'000 £'000 £'000
Turnover
Continuing operations 31,353 - - 31,353 28,658 28,658
Acquisitions 59,228 - - 59,228 - -
Total turnover 90,581 - - 90,581 28,658 28,658
Operating profit
Continuing operations 2,228 (94) (1,779) 355 2,031 1,956
Acquisitions 3,895 (540) (3,517) (162) - -
Total operating
profit 6,123 (634) (5,296) 193 2,031 1,956
Profit/(loss) on sale
of business - 159 159 -
Profit on sale of
property - 381 381 464
Profit on ordinary
activities before
interest 6,123 (634) (4,756) 733 2,031 2,420
Net interest (2,321) (2,321) (302) (302)
payable
Profit/(loss) before
taxation 3,802 (634) (4,756) (1,588) 1,729 2,118
Tax on profit (1,225) - 714 (511) (495) (495)
Profit after 2,577 (634) (4,042) (2,099) 1,234 1,623
taxation
Dividends paid and
proposed (1,771) (815)
Transfer to reserves (3,870) 808
Earnings per share 4.5p (1.1)p (7.1)p (3.7)p 3.2p 4.2p
Diluted earnings per
share 4.5p (1.1)p (7.0)p (3.7)p 3.2p 4.2p
GROUP PROFIT & LOSS ACCOUNT
For the six months to 31 March 2001 compared with the year to 30 September 2000
Six months to Year to
31 March 2001 30 September 2000
Before Before
exceptional exceptional
items and items and
goodwill Goodwill goodwill
amortis- amortis- Exceptional amortis-
ation ation items Total ation Total
£'000 £'000 £'000 £'000 £'000 £'000
Turnover
Continuing 31,353 31,353 58,858 58,858
operations
Acquisitions 59,228 59,228
Total turnover 90,581 90,581 58,858 58,858
Operating profit
Continuing 2,228 (94) (1,779) 355 4,770 4,620
operations
Acquisitions 3,895 (540) (3,517) (162)
Total operating
profit 6,123 (634) (5,296) 193 4,770 4,620
Profit/(loss) on sale
of business 159 159 (64)
Profit on sale of
property 381 381 464
Profit on ordinary
activities before
interest 6,123 (634) (4,756) 733 4,770 5,020
Net interest (2,321) (2,321) (668) (668)
payable
Profit/(loss)
before taxation 3,802 (634) (4,756) (1,588) 4,102 4,352
Tax on profit (1,225) 714 (511) (879) (879)
Profit after 2,577 (634) (4,042) (2,099) 3,223 3,473
taxation
Dividends paid and
proposed (1,771) (1,621)
Transfer to (3,870) 1,852
reserves
Earnings per share 4.5p (1.1)p (7.1)p (3.7)p 8.3p 9.0p
Diluted earnings per
share 4.5p (1.1)p (7.0)p (3.7)p 8.3p 8.9p
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
For the six months to 31 March 2001
Six months to Six months to Year to
31 March 31 March 30 September
2001 2000 2000
£'000 £'000 £'000
(Loss)/profit for the period (2,099) 1,623 3,473
Realised gain on revaluation
of properties 126
Currency translation differences (54)
Total recognised gains and
losses for the period (2,099) 1,623 3,545
RECONCILIATION OF MOVEMENT IN GROUP SHAREHOLDERS' FUNDS
For the six months to 31 March 2001
Six months to Six months to Year to
31 March 31 March 30 September
2001 2000 2000
£'000 £'000 £'000
(Loss)/profit for the period (2,099) 1,623 3,473
Dividends (1,771) (815) (1,621)
(3,870) 808 1,852
Other recognised gains and
losses relating to the period - (198) (252)
New ordinary share capital
issued 12,875 3 4
Net increase in shareholders'
funds for the period 9,005 613 1,604
Shareholders' funds at
start of period 24,684 23,080 23,080
Shareholders' funds
at end of period 33,689 23,693 24,684
GROUP BALANCE SHEET
As at 31 March 2001
31 March 31 March 30 September
2001 2000 2000
£'000 £'000 £'000
Fixed assets
Intangible assets 28,702 2,755 3,213
Tangible assets 53,428 17,004 17,470
Investments 1,365 1,400 1,365
------ ------ ------
83,495 21,159 22,048
------ ------ ------
Current Assets
Stocks 19,915 8,157 7,632
Debtors 57,795 16,435 17,689
Investments 275 - -
Short term deposits 2,829 - -
Cash - - 288
------ ------ ------
80,814 24,592 25,609
------ ------ ------
Creditors: amounts falling
due within one year
Borrowings and finance leases (7,804) (2,857) (4,590)
Other creditors (59,460) (16,320) (17,712)
------ ------ ------
(67,264) (19,177) (22,302)
------ ------ ------
Net current assets 13,550 5,415 3,307
Total assets less current
liabilities 97,045 26,574 25,355
Creditors: amounts falling due
after one year
Borrowings and finance leases (61,774) (2,391) (287)
Other creditors (526) - (18)
------ ------ ------
(62,300) (2,391) (305)
------ ------ ------
Provisions for liabilities
and charges (1,020) (490) (330)
------ ------ ------
Net assets 33,725 23,693 24,720
====== ====== ======
Capital and reserves
Called up share capital 15,242 9,654 9,654
Share premium 3,335 135 135
Other reserves 4,087 - -
Revaluation reserve 1,781 1,898 1,781
Capital redemption reserve 238 238 238
Profit & loss account 9,006 11,768 12,876
------ ------ ------
Equity shareholders' funds 33,689 23,693 24,684
Minority interest 36 - 36
------ ------ ------
33,725 23,693 24,720
====== ====== ======
GROUP CASH FLOW STATEMENT
For the six months to 31 March 2001
Six months to Six months to Year to
31 March 31 March 30 September
2001 2000 2000
£'000 £'000 £'000
Net cash flow from operating
activities 7,564 (287) 4,213
Returns on investment and
servicing of finance (2,321) (302) (669)
Taxation 133 397 (386)
Capital expenditure 1,760 573 (475)
Acquisitions and disposals (64,209) (184) (729)
Equity dividends paid (810) (817) (1,632)
------ ------ ------
Cash flow before financing (57,883) (620) 322
Financing
Issue of ordinary shares 5,870 3 4
Increase/(decrease) in
borrowings 64,625 (2,442) (3,878)
Purchase of own shares - (198) (198)
------ ------ ------
70,495 (2,637) (4,072)
------ ------ ------
Increase/(decrease) in cash
in the period 12,612 (3,257) (3,750)
Reconciliation of net cash flow
to movement in net borrowings
Increase/(decrease) in cash in
the period 12,612 (3,257) (3,750)
Cash (inflow)/outflow from
borrowings (64,625) 2,442 3,878
------ ------ ------
Change in borrowings resulting
from cash flows (52,013) (815) 128
Borrowings assumed with
acquisitions (9,469) - -
Finance leases (718) - (284)
------ ------ ------
Movement in net borrowings in
the period (62,200) (815) (156)
Net borrowings at the start
of period (4,589) (4,433) (4,433)
------ ------ ------
Net borrowings at end of period (66,789) (5,248) (4,589)
------ ------ ------
NOTES TO THE CASH FLOW STATEMENT
Six months to Six months to Year to
31 March 31 March 30 September
2001 2000 2000
£'000 £'000 £'000
1. Reconciliation of operating
profit to net cash flow from
operating activities
Operating profit before goodwill
Amortisation and exceptional
items 6,123 2,031 4,770
Depreciation 3,092 878 1,822
Changes in working capital:
Stocks 1,530 (1,504) (725)
Debtors 709 (1,954) (3,145)
Creditors and provisions (95) 262 1,491
Net cash flow from operating
activities before exceptional
items 11,359 (287) 4,213
Cash element of exceptional
items (3,795) - -
Net cash flow from operating
activities 7,564 (287) 4,213
2. Capital expenditure
Purchase of fixed assets (4,766) (840) (1,989)
Sale of fixed assets 6,526 1,413 1,514
1,760 573 (475)
3. Acquisitions and disposals
Purchase of subsidiary
undertakings (64,309) - -
Sale of business 847 - (64)
Purchase of business (747) (184) (665)
(64,209) (184) (729)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1. Segmental Information
Six months to 31 March 2001 compared with six months to 31 March 2000
Six months to Six months to
31 March 2001 31 March 2000
£'000 £'000
Operating Net Operating Net
Turnover profit Assets Turnover profit Assets
Building and
construction
Products
Continuing operations 28,986 2,211 26,683 24,789 1,897 28,156
Acquisitions 40,431 2,694 27,768
Total 69,417 4,905 54,451 24,789 1,897 28,156
Industrial products
Continuing operations 2,367 17 1,402 3,869 134 915
Acquisitions 18,797 1,201 22,087
Total 21,164 1,218 23,489 3,869 134 915
Total operations
Continuing operations 31,353 2,228 28,085 28,658 2,031 29,071
Acquisitions 59,228 3,895 49,855
Total 90,581 6,123 77,940 28,658 2,031 29,071
Tax and dividends (6,128) (2,885)
Net borrowings (66,789) (5,248)
Goodwill 28,702 2,755
Total Group 33,725 23,693
Operating profit is stated before exceptional items and goodwill amortisation.
Six months to 31 March 2001 compared with year to 30 September 2000
Six months to Year to
31 March 2001 30 September 2000
£'000 £'000
Operating Net Operating Net
Turnover profit assets Turnover profit Assets
Building and
construction products
Continuing operations 28,986 2,211 26,683 52,704 4,643 27,699
Acquisitions 40,431 2,694 27,768
Total 69,417 4,905 54,451 52,704 4,643 27,699
Industrial products
Continuing operations 2,367 17 1,402 6,154 127 871
Acquisitions 18,797 1,201 22,087
Total 21,164 1,218 23,489 6,154 127 871
Total operations
Continuing operations 31,353 2,228 28,085 58,858 4,770 28,570
Acquisitions 59,228 3,895 49,855
Total 90,581 6,123 77,940 58,858 4,770 28,570
Tax and dividends (6,128) (2,474)
Net borrowings (66,789) (4,589)
Goodwill 28,702 3,213
Total Group 33,725 24,720
Operating profit is stated before exceptional items and goodwill amortisation
2. Acquisitions and disposals
During the period the Company acquired Ash & Lacy plc. It also completed the
acquisition of the residential doors business of P.C. Henderson Ltd to whom it
sold its Birtley garage doors operation.
Goodwill arising from these acquisitions amounted to £25m and is being
amortised over a period of 20 years. Only a preliminary assessment has so far
been made of the fair value of the Ash & Lacy net assets. This will be
finalised by the year end.
3. Exceptional items
The profit on the sale of business relates to the Birtley garage doors
operation. The profit on sale of property relates to the sale and leaseback
of an operating property at Telford.
The exceptional items from continuing operations represent the costs of
reorganising the business of Asset International and the lintel production
facility at Birtley Building Products.
The exceptional items from acquisitions represent closure costs of the Ash &
Lacy head office, bank arrangement fees and related due diligence costs and
closure costs of acquired businesses.
4. Taxation
Tax has been provided on the profit before goodwill and exceptional items at
the estimated effective rate for the full year.
5. Dividends
The Directors have declared an interim dividend for the current year of 2.1p
per share (six months to 31 March 2000: 2.1p), which will be paid on 8th
October 2001 to shareholders on the register on 13th July 2001.
The dividends for the period include £491,000 in respect of the additional
final dividend for the year ended 30th September 2000, which was paid on the
additional shares issued to Ash & Lacy shareholders as part of the acquisition
of that company.
6. Earnings per share
The weighted average number of shares in issue during the period was 57.16m,
diluted for the effect of outstanding share options 57.41m (six months ended
31st March 2000: 38.88m, 39.13m diluted).
Earnings per share have been calculated on losses of £2,099,000 (six months
ended 31 March 2000: earnings £1,623,000) and earnings per share before
exceptional items and goodwill amortisation on earnings of £2,577,000 (six
months ended 31st March 2000: £1,234,000).
Earnings per share before exceptional items and goodwill amortisation have
been shown because the Directors consider that this gives a more meaningful
indication of the underlying performance.
The results for the half years ended 31 March 2000 and 2001 are unaudited and
do not constitute statutory accounts within the meaning of Section 240 of the
Companies Act 1985.
The financial information for the year ended 30th September 2000 has been
extracted from the statutory accounts for that year which will be filed with
the Registrar of Companies and on which the auditors have given an unqualified
opinion.
Copies of the Interim Report will be sent to shareholders and will be
available from the Company's registered office at Springvale Business &
Industrial Park, Bilston, West Midlands, WV14 0QL.
Latest directors dealings
- 1 day ago Legal & General Group
- 1 day ago Legal & General Group
- 1 day ago GETECH Group
- 1 day ago Great Portland Estates
- 1 day ago Time Out Group