Final Results
Severfield-Rowen PLC
10 April 2006
10 April 2006
2005 Full Year Results
RECORD PROFITS, OUTSTANDING ORDER BOOK, EXCELLENT PROSPECTS
Severfield-Rowen Plc, the market leading structural steel group, announces its
full year results to 31 December 2005.
£m 2005 2004 Change
Revenue 236.7 204.3 15.9%
Operating profit 19.3 12.1 59.4%
Profit before tax 19.7 12.2 60.8%
Basic earnings per share 66.39p 41.44p 60.2%
Dividend per share 37.0 p 23.0p 60.9%
Highlights
• Record pre-tax profits increased 61%
• Group operating margins significantly improved to 8.15% (2004: 5.93%)
• Dividend increased by 61%
• Gross cash balances of £30.1m up 69%
• All core businesses performed strongly
• 2006 commenced ahead of Board's expectations
• Record order book of £210m
• Board confident of further success in 2006
Commenting on the results, Peter Levine, Chairman said:
'Severfield-Rowen has had a stunning year with results significantly ahead of
market expectations.'
'We now have four major industry brands, providing a broad range of expertise
and services. Our markets are buoyant and demand for structural steelwork
projects continues to grow. We have a record order book of £210m and the
industry is experiencing robust enquiry levels.
'2006 has started strongly, continuing the forward moving momentum, and the
Board is confident of further success in 2006.'
Enquiries
Severfield-Rowen Plc
Peter Levine, Chairman 07802 312249
Peter Davison, Finance Director 01845 577 896
Financial Dynamics
Richard Mountain/Susanne Walker 020 7831 3113
CHAIRMAN'S STATEMENT
Introduction
The Group had a stunning year in 2005 with the results significantly ahead of
initial expectations. Success was achieved throughout the core businesses, with
all performing profitably and contributing to a significant margin improvement
for the Group.
The Group's reputation as the market leader is undisputed. This is complemented
by the financial position of the Group with strong cash balances.
Overview
In 2005 profit before tax increased by 60.8% to £19.7m (2004: £12.2m) on
increased turnover of £236.7m (2004: £204.3m). Operating profit was £19.3m
(2004: £12.1m) producing, after the tax charge of £6.1m (2004 £3.8m), increased
earnings per share of 66.4p (2004: 41.4p).
The Group's strong financial position is a reflection of the record results.
Net assets increased to £55.2m (2004: £47.3m) and despite capital expenditure
out of cash flow of £4.2m (2004: £5.9m) the Group ended the year with a gross
cash balance of £30.1m (2004: £17.8m).
During the year the Group was engaged in many major projects and continued its
success with further contract awards arising from demand for the Group's
unmatched range of services. The Group is successfully achieving its aims of
increasing its margins and enlarging the contribution of value added work. The
Heathrow Terminal 5 contract has largely been completed.
The results are set against a continued robust industry background with the
growth in demand for structural steelwork forecast to continue.
Each one of the Group's core subsidiaries made significant contributions to the
Group results, these being: Severfield-Reeve Structures based in Dalton, North
Yorkshire, Watson Steel Structures based near Bolton, Lancashire, Rowen
Structures based near Nottingham and Atlas Ward Structures based in Sherburn,
North Yorkshire.
Severfield-Reeve Structures, which has the most efficient and profitable
structural steel fabrication plant in the UK, produced another excellent
performance. The plate line and the intumescent paint lines once again
contributed to this strong performance.
Watson Steel Structures also made very good progress and reinforced its
important role to the Group.
Rowen Structures demonstrated its continued value to the Group's capability to
provide a broad range of services with particular reference to the important
airport sector.
Atlas Ward Structures, acquired for £1.2m cash on 31 March 2005, delivered
profits significantly ahead of our original budget. The ongoing capital
investment plan will further increase its efficiency and productivity.
Steel UK Limited
On 3 February 2006 it was announced that Severfield-Reeve Structures Limited and
Murray Metals Group Limited had created a new joint venture through which they
will jointly conduct their steel buying activities.
This significant development is expected to show material benefits from the
latter part of 2006 onwards.
Board Changes
On 4 November 2005 it was announced that Tom Haughey the Group's Commercial
Director was appointed Joint Group Managing Director. Tom plays an important
role within the Group, particularly in the key areas of procurement and
strategy.
Employees
The Group's management and workforce are the fulcrum around which the Group's
success is achieved. The Board continues to be in their debt and expresses to
them its appreciation and gratitude. They have achieved the Board's aim of
maintaining the reputation and leadership of Severfield-Rowen in the industry
and it is a tribute to their skill and hard work that recently Severfield-Rowen
was voted Financial Times mid cap PLC Company of the Year for 2005.
Dividend
The Board's confidence in the Group's future prospects, combined with excellent
cash balances lead the Board to recommend an increase in the full year dividend
by 61% to 37.0 p per share, which is covered 1.8 times by earnings. The final
dividend of 24.5 p per share (2004: 14.25p) is payable on 19 June 2006 to
shareholders on the register on 12 May 2006.
It is worthy of note that over the last two years the full year dividend has
increased by 118% (20.0p per share increase).
Outlook
The Board considers there to be outstanding potential for future growth in
profitability, underpinned by the record order book. Margins continue to
improve with demand for the Group's services increasing.
The present year has started where 2005 left off and performance is already
ahead of our initial expectations. The Board is confident of further success.
Peter Levine
Chairman
OPERATIONAL REVIEW
Core Business Overview
In 2005 the core businesses of the Group, Severfield-Reeve Structures, Watson
Steel Structures, Rowen Structures and Atlas Ward Structures each produced
excellent returns, materially ahead of our initial expectations. They were well
supported by our erection company, Steelcraft Erection Services.
The Group has once again delivered results which set new precedents in our
industry. We constantly review systems and performance in order to maintain our
position as market leader so that we can provide enhanced services to our
clients with the increasing broad range of work the Group performs.
Severfield - Reeve Structures
The capital investment which is continually carried out on the upgrading of
plant and machinery ensures high levels of efficiency and productivity. The
business continued to go from strength to strength working on a wide variety of
projects including:
• Warehouse and distribution centre on the Pioneer Business Park, Ellesmere
Port near Chester
• New Tesco distribution centre in Peterborough
• Additional manufacturing facilities for the new Mini made by BMW at Cowley
near Oxford
• Ongoing retail development opposite BBC Television Centre, White City,
London
• Development of 'Knowledge Dock' and 'Learning Resource Centre' buildings
for the University of East London
• Redevelopment of office blocks at Aldermanbury Square, London
• Two office developments for international law firms over-looking Tower
Bridge and City Hall in the award winning More London development
• Office Headquarters for Arsenal Football Club opposite the new Emirates
Stadium
• New B&Q superstore in Luton
• Office development at 77 Grosvenor Street, London
• New car park for Whiston Hospital, Liverpool
• New beef processing and packaging plant for Scotbeef in Glasgow
In 2006 significant contracts include:
• Office development at No.1 Coleman Street, London
• Redevelopment and enlargement of the Pollok retail centre in Glasgow
• Retail and residential development in the Princesshay area of Exeter
• Retail development at the Grand Arcade, Wigan
• Creation of an international centre for book conservation at the British
Library, London
• New 1200 bed hospital development at Queen Elizabeth Medical Centre,
Edgbaston, Birmingham
• Development of a new plaster calcination and milling facility for British
Gypsum at East Leake, Leicestershire
• Retail development at the Broadmead shopping complex in Bristol
Watson Steel Structures
Watson's results demonstrate its valuable contribution to the Group. It has an
excellent reputation in the industry for specialist steel work. Contracts
performed in 2005 included:
• Ongoing works at Heathrow Airport Terminal 5 for BAA plc
• Steelwork to New Grandstand, Ascot Racecourse
• O2 Arena
• Phase 2 of St Pancras Station redevelopment
• Multi-Storey Car Park - Heathrow Airport for BAA plc
• Emirates Stadium the new home for Arsenal Football Club
New contracts for 2006 include:
• Arena and Conference Centre, Kings Waterfront, Liverpool
• Redevelopment of Centre Court, Wimbledon
• Link bridge Terminal 3, Heathrow Airport for BAA plc
• South East Pier, Edinburgh Airport for BAA plc
• Second phase of the Darwin Centre at the Natural History Museum
• Two grandstands, Aintree Racecourse
• Steelwork for Waterfront at O2 Arena
• Finnieston Bridge arching the River Clyde, Glasgow
Rowen Structures
Rowen's core expertise in the airport sector continues to play an important role
within the Group.
The contracts undertaken by Rowen in 2005, as well as airport work for BAA,
included a new car park at Queen Elizabeth Medical Centre, Edgbaston, Birmingham
A major new contract for 2006 is a retail and leisure development at the Eagle
Centre, Derby which will continue alongside servicing of the airport sector.
Atlas Ward Structures
Atlas Ward offers a particular expertise in the distribution warehouse market, a
highly skilled work force and a complementary client base. The Group has
successfully integrated Atlas Ward which performed well ahead of our initial
expectations in 2005. A £3m capital investment programme to upgrade production
facilities and improve efficiency is now nearly complete.
Contracts for 2005 included:
• New warehouse facility on the outskirts of Hemel Hempstead for Astral
Developments
• Three storey office development for the new Aylesbury College campus
• New storage and distribution facility for Kimberley Clark
• Second phase food distribution warehouse near Bridgwater, Somerset
• Distribution centre in Newark for Dixons
New contracts for 2006 include:
• New IKEA store at Ashton-under-Lyne near Manchester
• Tesco distribution centre in Dublin
• Rebuilding of the Monkhill Confectionery Popcorn Factory in Pontefract
• Addition of two Airbus assembly facilities at Filton near Bristol and
Broughton in North Wales
Steelcraft Erection Services
The year 2005 saw Steelcraft, our dedicated service provider once again
supplying the Group with invaluable support. Yet again it produced very good
results, testament to its effective management, control and close working
relationship with other members of the Group.
Severfield-Reeve Projects
In 2005 Severfield-Reeve Projects saw a return to profitability. In addition
significant changes were made to the senior management team. During the year
management has worked to secure for the company a very satisfactory forward
workload. The benefits of this good order book and the new management are
coming to fruition in 2006. The directors of Severfield-Reeve Projects are
very optimistic about the coming year and remain confident that the company will
continue to provide the Group with an ongoing profitable and reliable service.
Steel UK Limited
This joint venture, announced after the year end, is expected, to be of
significant assistance in the sourcing of steel during the latter part of 2006.
Conclusion
The Group has had a record-breaking year with the results substantially ahead of
expectations. The Group is well set for another year of significant progress
underpinned by the outstanding record order book of £210m. Enquiry levels
remain robust throughout the Group against a background of buoyant industry
demand.
John Severs
Managing Director
Financial Review
Once again I am pleased to report that the Group's results for the year ended 31
December 2005 show another significant improvement in its financial performance
with revenue, profit before tax, earnings per share, dividends per share and the
year end gross cash position all reaching record levels for the second
successive year.
Profit before tax of £19.65 million and revenue of £236.72 million have
increased 60.8% and 15.9% respectively over the figures achieved in 2004. The
profit before tax is an excellent result, well ahead of market expectations
which had already been upgraded a number of times during the year.
The basic earnings per share of 66.39p is an increase of 60.2% over 2004.
Consequently, it is recommended that the total dividend for the year is
increased by 60.9% to 37p per share, giving a dividend cover of 1.8 times.
It is particularly pleasing that the year ended with the Group having an
exceptional gross cash balance of £30.13 million and net funds of £29.70
million. Net assets increased by 16.7% to £55.20 million.
International Financial Reporting Standards
The accounts to 31 December 2005 are the first to be prepared on the basis of
International Financial Reporting Standards (IFRS). Severfield-Rowen has
amended its accounting policies to comply with standards issued by the
International Accounting Standards Board (IASB) and interpretations of the
International Financial Reporting Interpretations Committee (IFRIC) that have
been issued and are effective (or available for early adoption) at 31 December
2005.
The comparative figures for the year ended 31 December 2004 have been restated
to comply with adopted IFRS. They were previously prepared under UK Generally
Accepted Accounting Practice (GAAP).
There was no impact on the Income Statement other than changes of presentation
as a result of the implementation of IFRS. The only change in policy which has
a significant effect on the restated balance sheet as at 31 December 2004 was
that relating to dividends not being recognised until they are declared or paid
as under IAS 10. The impact of this was to increase the Company's net assets by
£2.889 million to £47.295 million.
All the comparative figures referred to relate to the restated figures for the
year ended 31 December 2004.
Revenue
Group revenue has increased by 15.9% to a record level of £236.72 million,
driven by the addition of nine months of the revenue of Atlas Ward, following
its acquisition on 31 March 2005.
Operating Profit
The Group's operating profit increased by 59.4% to £19.30 million with operating
margins, expressed as a percentage of revenue, continuing to increase to 8.15%
from the 5.93% achieved in 2004.
These figures continue to incorporate those of the Group's two associated
companies, Kennedy Watts Partnership Limited and Fabsec Limited, of which the
Group owns 25.1% and 25% respectively. The Group's operating profit for the
year includes its share of these two companies' results which amounted to a net
loss of £1,000 (2004: loss £179,000).
Net interest receivable for the Group amounted to £349,000 (2004: £110,000),
producing a profit before tax of £19.65 million, an increase of 60.8% over the
previous year.
Taxation
The tax charge of £6.14 million represents an effective tax rate of 31.23% on
pre-tax profits compared with 31.25% in the previous year. These effective
rates are higher than the prevailing rate of 30% due to the adjustments made in
respect of disallowable expenditure incurred during the year.
Earnings per Share
Basic earnings per share is at a record level of 66.39p, an increase of 60.2%
over the previous year. This calculation is based on the profit after tax of
£13,515,000 and 20,358,229 shares, being the weighted average number of shares
in issue during the year.
As there were no share options outstanding at the year end the diluted earnings
per share is the same as the basic calculation.
Dividend
The Board will be recommending a final dividend of 24.5p per share (2004:
14.25p) at the Company's Annual General Meeting on 15 June 2006 bringing the
total dividend for the year to 37.0p per share. This total dividend represents
a 60.9% increase over the dividend of 23.0p per share paid for 2004. This is in
line with the basic earnings per share increase and maintains the total dividend
cover at 1.8 times earnings, a level at which the Board remains comfortable and
at which it remains confident of maintaining in the future.
The final dividend will be paid on 19 June 2006 to shareholders on the register
on 12 May 2006. The ex-dividend date will be 10 May 2006.
Balance Sheet
The Group's balance sheet continues to strengthen with shareholders' funds
increasing by £7.91 million to £55.20 million. This equates to a net asset
value per share at 31 December 2005 of 270.6p, compared with the adjusted value
due to the implementation of IFRS of 233.3p at the end of 2004.
The Group's balance sheet now has fixed assets totalling £36.78 million.
Depreciation charged in the year amounted to £2.72 million.
We have continued to invest in our business with capital expenditure in the year
of £4.22 million. Although somewhat lower than the amount expended in previous
years the level of expenditure will increase in 2006 with almost £10 million
budgeted.
Acquisition
The income statement incorporates the result for the nine month period of Atlas
Ward Holdings Limited, a company acquired on 31 March 2005 for a cash
consideration of £1.42 million including costs.
Goodwill arising on the acquisition amounted to £6.57 million and has been
included in the consolidated balance sheet as an intangible fixed asset and will
be subject to an annual impairment review under IFRS 3.
Atlas Ward has been integrated into the Group most satisfactorily and the
results for the nine month period of its ownership are both very good and
encouraging for the future.
Unlike the rest of the Group, Atlas Ward has a defined benefit pension scheme
which, although now closed to new members, had a book value deficit of £4.72
million as at 31 March 2005. Post acquisition a fair value exercise of the
pension scheme was undertaken, including reviews of the underlying data,
resulting in the deficit being increased to £6.01 million as at 31 March 2005.
This value has been included in the calculation of the goodwill figure.
At 31 December 2005, as a result of changes made to the assumptions used in
calculating pension scheme assets and liabilities, in particular a reduction in
the discount rate used, the deficit has increased slightly to £6.38 million and
is shown as a liability in the Group balance sheet.
Associated Companies
During 2001 the Company acquired a 25% shareholding in Fabsec Limited, a company
involved in the development of a bespoke and fire engineered beam made out of
plate. This company holds the master intellectual property rights for these and
the other Fabsec family of beams the world over. It also carries out marketing
promotion and provides technical support. The Group benefits from these
functions whilst contributing 25% towards overheads. Fabsec Limited is not to
be confused with the Group's successful and profitable plate and intumescent
paint lines at Dalton which produce the Fabsec and fire engineered beams under a
perpetual no royalty licence from Fabsec Limited.
Investment in Fabsec Limited has continued in 2005 by way of licence fees paid
of £275,000. Loans outstanding to the Group by Fabsec as at 31 December 2005
amounted to £614,000 (2004: £614,000). However, the Board is of the opinion
that there may be an element of doubt over the collection of this loan in the
short to medium term future. Consequently, a review has been carried out and a
provision of £543,000 has been made against the debt.
Fabsec continues to be involved in technical and market development and the
results for the year to 31 December 2005 show a small loss. The Group's 25%
share of this loss amounted to £6,000 (2004: £179,000).
The Group also owns a 25.1% shareholding in Kennedy Watts Partnership Ltd, a
company involved in CAD/CAM steelwork design. The Group's share of the profit
of Kennedy Watts for the year amounted to £5,000 (2004: £Nil) resulting in a net
loss arising from the associated companies of £1,000 (2004: £179,000).
Cash Flow
Management of the Group's cash has always been of prime importance to the Board
and this remains the case with cash being tightly controlled. It is
particularly pleasing, therefore, to report that the Group ended the year with a
record positive cash balance of £30.13 million (2004: £17.85 million).
During the year £35.54 million was generated from operating activities.
Outflows of cash during the year included dividends paid of £5.46 million,
corporation tax paid of £5.82 million and the purchase of fixed assets, net of
sale proceeds, of £3.57 million. Also during the year short term borrowings of
£2.45 million were repaid.
The acquisition of Atlas Ward cost the Group £1.42 million in cash, including
expenses. In addition at 31 March 2005 Atlas Ward had a bank overdraft of £3.59
million. Consequently, the overall effect on the Group's cash movement due to
the acquisition amounted to £5.01 million.
Borrowings, representing amounts due on hire purchase contracts, amounted to
£0.43 million, leaving the Group with a net funds surplus of £29.70 million and,
therefore, no gearing.
Treasury
Group treasury activities are managed and controlled centrally. Risks to assets
and potential liabilities to customers, employees and the public continue to be
insured. The Group maintains its low risk financial management policy by
insuring all significant trade debtors.
The treasury function seeks to reduce the Group's exposure to any interest rate,
foreign exchange and other financial risks, to ensure that adequate and cost
effective funding arrangements are maintained to finance current and planned
future activities and to invest cash assets safely and profitably.
The Group remains committed to strong financial controls, cash management and
appropriate accounting and treasury policies.
Summary
The Group has had a very successful year with revenue, profit before tax,
earnings per share and dividends per share once again reaching record levels.
Cash generation continues to be very strong where, in spite of significant
outgoings on tax, dividends, capital expenditure and loan repayments totalling
£17.95 million and the effect on cash of the acquisition of Atlas Ward amounting
to £5.01 million the net funds of the Group increased by £15.05 million to
£29.70 million.
The acquisition of Atlas Ward is proving to be very successful enabling the
Group to continue to improve its very healthy financial position. The Group
remains well placed for future growth.
Peter Davison
Finance Director
Consolidated Income Statement
For the year ended 31 December 2005
Year ended Year ended
31 December 2005 31 December 2004
£000 £000
Continuing Operations
Revenue 236,722 204,277
Cost of sales (212,100) (188,145)
Gross profit 24,622 16,132
Other operating income 63 59
Distribution costs (784) (662)
Administrative expenses (4,597) (3,242)
Share of results of associates (1) (179)
Operating Profit 19,303 12,108
Investment income - interest 459 256
Finance costs - interest (110) (146)
Profit before tax 19,652 12,218
Tax (6,137) (3,818)
Profit for the period attributable to the equity 13,515 8,400
holders of the parent
Earnings per share:
Basic 66.39p 41.44p
Diluted 66.39p 41.36p
Consolidated Balance Sheet
31 December 2005
At At
31 December 2005 31 December 2004
£000 £000
ASSETS
Non-current assets
Goodwill 6,732 161
Other intangible assets 1,008 -
Property, plant and equipment 36,784 34,131
Interests in associates 36 580
44,560 34,872
Current assets
Inventories 7,318 6,678
Trade and other receivables 32,419 36,833
Cash and cash equivalents 30,132 17,845
69,869 61,356
Total assets 114,429 96,228
LIABILITIES
Current liabilities
Bank loan - 2,153
Trade and other payables 48,221 39,339
Tax liabilities 3,251 3,776
Obligations under finance leases 363 616
51,835 45,884
Non-current liabilities
Retirement benefit obligations 6,384 -
Deferred tax liabilities 943 2,620
Obligations under finance leases 66 429
7,393 3,049
Total liabilities 59,228 48,933
NET ASSETS 55,201 47,295
EQUITY
Share capital 2,040 2,027
Share premium 9,770 9,415
Other reserves 139 139
Retained earnings 43,252 35,714
TOTAL EQUITY 55,201 47,295
Consolidated Statement of Recognised Income and Expense
For the year ended 31 December 2005
Year ended Year ended
31 December 2005 31 December 2004
£000 £000
Actuarial loss on defined benefit (745) -
pension scheme
Tax on items taken directly to equity 224 -
Net expense recognised directly (521) -
in equity
Profit for the year from 13,515 8,400
continuing operations
Total recognised income and 12,994 8,400
expense for the year attributable
to equity shareholders
Consolidated Cash Flow
For the year ended 31 December 2005
Year ended Year ended
31 December 2005 31 December 2004
£000 £000
Cash flows from operating activities
Cash generated from operations 35,543 10,664
Interest paid (139) (146)
Tax paid (5,824) (2,587)
Net cash from operating activities 29,580 7,931
Cash flows from investing activities
Proceeds from sale of property, plant and equipment 648 1,153
Interest received 456 255
Acquisition of subsidiary, including costs (1,424) -
Overdraft acquired with subsidiary (3,592) -
Purchases of property, plant and equipment (4,216) (5,854)
Purchases of intangible fixed assets (1,008) -
Investment in associated company - (123)
Net cash used in investing activities (9,136) (4,569)
Cash flows from financing activities
Proceeds from the issue of share capital 368 4
Repayment of borrowings (2,453) (35)
Loan notes repaid - (164)
Payment of finance lease liabilities (616) (710)
Dividends paid (5,456) (3,930)
New borrowings - 2,134
Net cash used in financing activities (8,157) (2,701)
Net increase in cash and cash equivalents 12,287 661
Cash and cash equivalents at beginning of period 17,845 17,184
Cash and cash equivalents at end of period 30,132 17,845
1) Basis of preparation
Severfield-Rowen Plc has previously prepared its financial statements in
accordance with UK generally accepted accounting principles. From 2005, the
Group is required to prepare its consolidated financial statements in accordance
with International Financial Reporting Standards (IFRS) as adopted by the
European Union.
These results represent the first financial information prepared in accordance
with IFRS. An explanation of how the transition to IFRS has affected the
reported financial position, financial performance and cash flows of the Group
for the year ended 31 December 2004 was set out in our announcement on IFRS
restatement dated 23 September 2005, a copy of which is posted on the Group's
web-site: www.sfrplc.com.
This announcement and web-site information also includes details of the
accounting policies which have been used in the preparation of the financial
statements under IFRS. These accounting policies will be disclosed in full in
the Group's Consolidated Financial Statements for the year ended 31 December
2005.
The financial information set out in this preliminary announcement does not
amount to full accounts within the meaning of section 240 of the Companies Act
1985. Full accounts for the year ended 31 December 2005 have not yet been
audited or delivered to the Registrar of Companies. The Annual Report is due to
be posted to shareholders on or around 19 May 2006. A copy of the statutory
accounts for the year ended 31 December 2004 has been delivered to the Registrar
of Companies. The Auditor's Report on those accounts was not qualified and did
not contain a statement under section 237 (2) or (3) of the Companies Act 1985.
2) Revenue and segmental analysis
Revenue in both years originated from the United Kingdom. Revenue, profit
before tax and net assets, in both years, related to the design, fabrication and
erection of structural steel work and related activities.
3) Taxation
The taxation charge comprises:
2005 2004
£000 £000
Current tax
UK corporation tax 5,303 3,590
Adjustments to prior years' tax provision (4) (113)
5,299 3,477
Deferred tax
Current year charge 822 341
Adjustments to prior years' provision 16 -
838 341
Total tax charge 6,137 3,818
4) Dividends
2005 2004
£000 £000
Final dividend for the year ended 2,906 2,166
31 December 2004 of 14.25p
(2003: 10.75p) per share
Interim dividend for the year ended 2,550 1,764
31 December 2005 of 12.50p
(2004: 8.75p) per share
5,456 3,930
Proposed final dividend for the year 4,998 2,889
ended 31 December 2005 of 24.50p
(2004: 14.25p) per share
The proposed final dividend is subject to approval by shareholders at the Annual
General Meeting and has not been included as a liability in these financial
statements. The proposed dividend will be paid on 19 June 2006 to shareholders
on the register on 12 May 2006. The ex-dividend date is 10 May 2006.
5) Earnings per share
There are no discontinued operations in either the current or prior year.
The calculation of the basic and diluted earnings per share is based on the
following data:
2005 2004
£000 £000
Earnings
Profit for the year 13,515 8,400
2005 2004
Weighted average of number of shares 20,358,229 20,269,235
in issue
Weighted average of number of shares 20,358,229 20,309,730
in issue, allowing for dilutive effect
of share options
Basic earnings per share 66.39p 41.44p
Diluted earnings per share 66.39p 41.36p
6) Reconciliation of Group operating profit to cash generated from operations
2005 2004
£000 £000
Operating profit 19,303 12,108
Adjustments for:
Amortisation of intangible assets - 9
Depreciation of property, plant and equipment 2,719 2,063
Loss on disposal of property, plant and equipment 56 212
Provision against loan from associated company 543 -
Share of results of associated company 1 179
Operating cash flows before changes 22,622 14,571
in working capital
Decrease/(increase) in inventories 6,491 (3,362)
Decrease/(increase) in receivables 5,729 (1,609)
Increase in payables 701 1,064
Cash generated from operations 35,543 10,664
7) Reconciliation of movement in total equity
At At
31 December 31 December
2005 2004
£000 £000
Opening total equity 47,295 42,821
Total recognised income and expense 12,994 8,400
Dividends paid in period (5,456) (3,930)
Issue of share capital 368 4
Closing total equity 55,201 47,295
8) Analysis of net funds
At At
31 December 31 December
2005 2004
£000 £000
Cash in hand 30,132 17,845
Finance leases (429) (1,045)
Bank loan - (2,153)
Closing net funds 29,703 14,647
9) Acquisition of subsidiary
On 31 March 2005 the Company acquired 100% of the issued share capital of Atlas
Ward Holdings Limited for a cash consideration of £1.21 million. Atlas Ward
Holdings Limited is a parent company of a group of companies involved in the
design, fabrication and erection of structural steelwork. This transaction has
been accounted for by the acquisition method of accounting.
The provisional details of the acquisition are as follows:
Book Fair Value Fair Value
Value Adjustments £000
£000 £000
Net assets acquired:
Property, plant and equipment 1,860 - 1,860
Inventories 7,131 - 7,131
Trade and other receivables 938 374 1,312
Deferred tax asset 1,416 875 2,291
Trade and other payables (7,836) - (7,836)
Retirement benefit obligations (4,721) (1,292) (6,013)
Bank overdraft (3,592) - (3,592)
Other loan (300) - (300)
(5,104) (43) (5,147)
Goodwill 6,571
Total consideration 1,424
Satisfied by:
Cash 1,210
Directly attributable costs 214
1,424
Net cash outflow arising on acquisition
Cash consideration 1,424
Bank overdraft 3,592
5,016
This information is provided by RNS
The company news service from the London Stock Exchange
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