Final Results

RNS Number : 3581K

Mercury Recycling Group PLC

19 April 2010

 



MERCURY RECYCLING GROUP PLC

PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2009

HIGHLIGHTS
Mercury Recycling PLC, the AIM listed recycler of fluorescent light tubes and sodium street lamps together with other mercury contaminated waste, announces its final results for the year ended 31s  December 2009.
·	A fall in sales of 9% to £2.789m against a difficult trading background caused by the recession, where manufacturers of new  lamps have seen a 30% decline in sales.
·	Despite this, the Group remained profitable with pretax profits of £333,000 (2008- £534,000).  Basic earnings per share were 0.83p (2008- 1.2p)
·	The balance sheet remains sound with net debt of £0.36m less than 7% of shareholders' funds.
·	The Group is examining interesting opportunities presented by the 2010 Battery directive as well as recycling LCD screens.
·	Trading in the early part of the current year was affected by the adverse January weather, but since then activity has steadily improved.
Commenting on the results, the Chairman, The Rt Hon The Lord Barnett stated
'Your directors are quite satisfied with the performance of the Company and, as new lamp and tube sales recover, then the benefits will come through to the Company taking up our spare capacity.'

ENQUIRIES:
Mercury Recycling Group PLC
Bryan Neill, Managing Director	0161 877 0977
Smith & Williamson Corporate Finance Limited
Nick Reeve, Director Corporate Finance	0117 376 2213
Barrie Newton, Director Corporate Finance	0117 376 2213

CHAIRMAN'S STATEMENT

In my Interim Statement, I reported that our second half results were likely to reflect the continuing problems of the recession.  This did indeed happen, and our sales for the year ended 31 December 2009, were down from £3,074,000 to £2,789,000.  The squeeze on prices and margins also had an impact on our operating profits, which were down from £558,000 to £343,000.

The last year or so has not been easy for business generally and the economic downturn has even taken its toll on the lamp and tube manufacturers which have seen their sales fall by some 30%. This has obviously had an impact on our figures and, as can be seen, our revenues and profits have dropped as a result. Nevertheless, your Directors are quite satisfied with the performance of the Group and are confident that, as new lamp and tube sales recover, the benefits will come through to the Group, taking up our spare capacity.

Undoubtedly, the industry will benefit from the recent WEEE Directive, but there needs to be more public awareness of the necessity to recycle hazardous tubes and lamps, so that the disappointingly low recycling numbers can be improved. This will surely come, but it would be helpful if the authorities took a much more aggressive stance in making this happen.

The Group has considered many aspects of diversification including battery and LCD display recycling, which are both growing areas and which also are complementary to our existing operations. Given the advent of the new Battery Directive in 2010, we are looking at ways to increase our battery collection, sorting, and recycling service. We are also involved in research into the automated processing of mercury lamp containing LCD screens, where we continue to investigate this important opportunity.

In the current year, trading volumes were of course affected in January by the serious weather conditions which meant our vehicles were unable to function as usual.  Since then trade has shown a good improvement.

As will be seen from the Balance Sheet, the overdraft remains small, and would have been much improved were it not for capital improvements that had to be made.

A dividend would not be appropriate at the current time, but I do however expect the cash flow to be positive in the current year, and the Board would then have in mind to re-examine the dividend issue.

We look forward to the future with confidence. This is a growing sector, driven by legislation and we are well positioned to take advantage of the recovery.

Once again, I would like to thank all our staff for their commitment and diligence during the last year.

Yours sincerely,

The Rt Hon The Lord Barnett JP PC

Chairman

CONSOLIDATED INCOME STATEMENT
								2009		2008
						Note		£000		£000
Revenue						2		2,789		3,074
Cost of sales								(163)		(170)
Gross profit								2,626		2,904
Administrative expenses								(2,283)		(2,346)
Group operating profit						3		343		558
Investment revenues								-		11
Finance costs								(10)		(35)
Profit on ordinary activities before
taxation								333		534
Taxation								(53)		(130)
Profit on ordinary activities after
taxation retained for the year								280		404
Earnings per share			- Basic			4		0.83p		1.20p
			- Diluted			4		0.82p		1.19p
The income statement has been prepared on the basis that all operations are continuing operations.
There is no difference between the results as disclosed above and the results on an historical cost basis.

CONSOLIDATED BALANCE SHEET
								2009		2008
						Note		£000		£000
Non-current assets
Goodwill								4,122		4,122
Property, plant and equipment								1,509		1,358
								5,631		5,480
Current assets
Trade and other receivables								471		536
Cash and cash equivalents								1		38
Current tax assets								10		-
Assets held for sale								-		5
								482		579
Total assets								6,113		6,059
Current liabilities
Trade and other payables								(249)		(338)
Bank overdrafts and loans								(139)		(153)
Obligations under finance leases								-		(17)
Current tax liabilities								(39)		(140)
								(427)		(648)
Non-current liabilities
Trade and other payables								(42)		(51)
Bank loans								(225)		(274)
Deferred tax liabilities								(146)		(121)
								(413)		(446)
Total liabilities								(840)		(1,094)
Net assets								5,273		4,965
Equity
Share capital								3,403		3,375
Share premium								242		242
Other reserve								365		365
Retained earnings reserve								1,263		983
Total equity								5,273		4,965

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
				Share		Share		Other		Retained		Total
				Capital		Premium		Reserve		Earnings		Equity
				£000		£000		£000		£000		£000
Balance at 1 January 2008				3,373		242		365		579		4,559
Profit for the period				-		-		-		404		404
Issue of share capital				2		-		-		-		2
Balance at 31 December 2008				3,375		242		365		983		4,965
Profit for the period				-		-		-		280		280
Issue of share capital				28		-		-		-		28
Balance at 31 December 2009				3,403		242		365		1,263		5,273

CONSOLIDATED CASH FLOW STATEMENT
								2009		2008
						Note		£000		£000
Net cash from operating activities								395		965
Investing activities
Interest received								-		11
Proceeds on disposal of property, plant and equipment								14		18
Purchases of property, plant and equipment								(393)		(400)
Acquisition of businesses								-		(1,206)
Cash acquired with businesses								-		229
Net cash used in investing activities								(379)		(1,348)
Financing activities
Proceeds on issue of shares								28		2
New bank loans raised								100		-
Repayment of borrowings								(145)		(42)
Repayments of finance lease obligations								(17)		(7)
Net cash used in financing activities								(34)		(47)
Net decrease in cash and cash equivalents								(19)		(430)
Cash and cash equivalents at the beginning of year
								(51)		379
Cash and cash equivalents at end of year								(70)		(51)

NOTES

1  Basis of preparation

The information in this announcement has been extracted from the Company's audited Financial Statements which have been prepared in accordance with International Financial Reporting Standards (IFRSs). The Financial Statements have also been prepared in accordance with IFRSs adopted by the European Union and therefore the Group Financial Statements comply with Article 4 of the EU IAS Regulation.

The financial statements have been prepared on the historical cost basis.

2  Revenue
The revenue and profit on ordinary activities before taxation arise from the Group's principal activity.
The Group's revenue has been analysed by geographic area as follows:								2009		2008
								£000		£000
United Kingdom								2,789		3,064
Republic of Ireland								-		10
								2,789		3,074

3  Operating profit
								2009		2008
Profit for the year is shown after charging / (crediting):								£000		£000
Depreciation on tangible assets								229		186
Amortisation								-		1
Research and development								34		47
Government grants								(9)		(9)
Profit on disposal of tangible assets								4		8

4  Earnings per share
Basic - The calculation of basic earnings per share is based on a profit of £280,000 (2008 - £404,000) and on 33,891,087 (2008 - 33,731,179) ordinary shares, being the weighted average number of ordinary shares in issue during the year.
Diluted - The diluted earnings per share is based on the profit for the year of £280,000 (2008 - £404,000) and on 34,098,675 (2008 - 33,944,364) ordinary shares as adjusted for share options below:
								2009		2008
								Number		Number
Basic weighted average number of shares							33,891,087			33,731,179
Dilutive potential ordinary shares:
Dilution caused by options							207,588			213,185
Diluted weighted average number							34,098,675			33,944,364

5  Annual General Meeting

The Annual General Meeting of Mercury Recycling Group plc ("the Company") will be held at Mercury House, 17 Commerce Way, Trafford Park, Manchester M17 1HW on 21st May 2010, at 10.30 a.m.

6  Posting of Financial Statements

The Company's Financial Statements for the year ended 31 December 2009 are being posted to shareholders today and will be available for download from the Company's website at www.mercuryrecycling.co.uk

 

END

 

 

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