Final Results - Year Ended 31 March 2000

Vibroplant PLC 27 June 2000 Contacts: Jeremy Pilkington, Chairman & Chief Executive Neil Stothard, Finance Director Vibroplant plc Tel: 020 7831 3113 (27.06.00) Tel: 01423 533400 (thereafter) www.vibroplant.co.uk Peter Otero Financial Dynamics Tel: 020 7831 3113 Vibroplant plc: Preliminary Results Vibroplant plc, the specialist UK plant and tool hire group, announces its preliminary results for the year ended 31 March 2000: * Group profit before tax up 3.8% to £3.43m (1999 - £3.30m) * Profit before tax and exceptionals up 12% to £3.7m * Turnover up 4.7% to £55.0m (1999 - £52.5m) * Earnings per share before exceptionals up 2.9% to 5.94p (1999 - 5.77p) * Final dividend maintained at 4.05p * Strong operational cashflow has reduced gearing to 27% (1999 - 38%). The group has significant funding capacity to pursue its growth objectives. * Programme of withdrawal from unprofitable businesses underway. Group to focus on three businesses; Vibroplant, Tool Hire and Torrent Trackside. Jeremy Pilkington, chairman & chief executive, comments: 'I believe that the group's change in focus away from traditional general plant will improve shareholder returns in the medium term as it progressively moves to markets offering superior growth and return opportunities.' CHAIRMAN'S STATEMENT This year has seen a number of important decisions taken concerning the future composition and direction of the Group businesses. The good progress achieved in those areas which we identified last year as being the primary focus of our future growth strategy has unfortunately been significantly offset by the continuing underperformance of the general plant business. We have therefore now implemented a programme for withdrawing, with certain specific exceptions, from general plant. The withdrawal programme is already underway and will be substantially completed by the half year stage. In future, the Group will be focused on three businesses which we believe offer better quality profit opportunities. I discuss these below under the headings of Vibroplant, Tool Hire and Torrent Trackside. SUMMARY OF RESULTS Group profit before tax rose to £3.43m (1999 : £3.30m) on turnover of £55.0m (1999 : £52.5m). Two exceptional items are shown in this years accounts. The charge of £1.77m relates to the cost of business termination. The exceptional credit of £1.49m is the recognition of the final element of the profit from the sale of our US business in 1996 following the expiry of residual environmental warranties in February of this year. Without these two exceptional items, the underlying profitability before tax of the Group rose 12% to £3.7m. Earnings per share were 4.22 pence (1999 : 5.77 pence) or, excluding the exceptional items, 5.94 pence. Strong operational cash flow reduced gearing at the year end to 27% (1999 : 38%) after acquisitions of £1.8m and gross capital expenditure of £8.9m. The Group has significant funding capacity to pursue its growth objectives. The directors are recommending a final dividend of 2.65 pence per share payable on 3rd October 2000 to shareholders on the register at 4th September 2000, giving a maintained total dividend for the year of 4.05 pence per share. VIBROPLANT Turnover in the year was £34.6m (1999 : £37.2m) generating operating profits of £2.2m (1999 : £3.0m). Gross capital investment in fleet assets totalled £7.6m (1999 : £10.8m). General Plant General plant has traditionally been the largest product group within Vibroplant, both in terms of turnover and capital employed, but has continued to underperform, due in the main to uneconomic market pricing. Despite the efficiency improvements that we have achieved in recent years, including the benefit of the move to regional hire centres, we have concluded that the likely extent of any further improvement in general plant is insufficient to warrant continuance of these activities on the current scale. We are therefore, with the exception of certain forklift products which I discuss below in more detail, withdrawing from the hire of general plant in England and Wales. We will retain our significant general plant presence in Scotland where we enjoy a strong market position. Investment in the general plant fleet totalled £1.9m in the year. As previously announced, we completed the sale of our powered access hire fleet in April 2000 to Lavendon Plc for £3.76m. The net book value of assets was £4.18m and the loss on the sale is contained within the exceptional charge shown in these accounts. The powered access fleet had experienced a sharp decline in revenues as over capacity from existing and new entrants impacted the market. The Vibroplant division is now focused on the following four well established businesses operating in strong growth markets. UK Forks A substantial proportion of the capital investment in general plant in recent years has been directed at building a strong presence in the forklift market serving the housebuilding, industry and general construction sectors. We have now extracted this activity from the broader general plant offering and established a separate business that has recently been nationally launched as UK Forks. We anticipate further significant investment in this business as we grow market share and profitability. Investment in fleet in the year totalled £4.1m. Airpac Airpac is our long established compressed air rental business and this activity will be retained and expanded. In the offshore market, Airpac is the leading supplier to the North Sea oil and gas industry as well as supporting our customers in international markets. Onshore, we have lower market share but we have identified significant growth opportunities, particularly in the industrial field. Fleet investment totalled £0.4m in the year. Groundforce Groundforce has continued to consolidate its strong market position through the introduction of a broader range of engineering products supported by advanced technical and design capability. New trench lining systems, heavy duty hydraulic braces and struts give Groundforce a comprehensive solution to most temporary works situations. Fleet investment totalled £1.0m in the year. Safeforce Safety Services had a very satisfactory year and has, in the new financial year, been relaunched as Safeforce. Safeforce enjoys excellent growth prospects within a rapidly expanding market for safety products and training. A major programme of product expansion including sales and training offerings will compliment the existing equipment hire business. Fleet investment totalled £0.2m in the year. TOOL HIRE Important developments took place in our tool hire businesses in the year as we pursued our strategy of building a national network of hire shops. Organic growth and acquisition gave us our first presence in the key Scottish and South Western markets respectively and, post the year end, we made our most substantial tool hire investment to date with the acquisition of The Handi Hire Group Limited. Handi Hire was acquired on 31st May for a consideration of £2.6m. Handi has twenty four branches across the Midlands and increases our network by almost 50% with an excellent geographic fit with our existing locations. All businesses achieved organic revenue growth with new hire stores opened in Huddersfield, Oldham, Milton Keynes, Glasgow, Paisley, Crawley, Leicester and Stoke. The acquisitions of Renter Center (Swindon, Melksham, Chippenham), Aytee (Barnsley), Thanet (Margate) and Trademaster (Bristol) were successfully integrated and have all shown significant revenue growth post acquisition. In October, we launched our national tool hire call centre, The Hire Station. The Hire Station offers customers a single order point for tools sourcing throughout the UK. We also launched shortly after the year end a catalogue and on-line sales business, Tools & Fixings Direct (www.toolfixdirect.co.uk). As part of the convergence of our tool businesses as we achieve more comprehensive national coverage, an integrated tool catalogue was introduced last year offering a uniform selection of equipment and trading terms across all our tools brands. Also, the standardised I.T. Platform introduced in late 1998 has improved transparency and comparability amongst the tool businesses as well as enhancing our ability to respond to customer requests for bespoke asset management information. Turnover in the year totalled £16.3m (1999 : £11.7m), generating operating profits of £1.4m (1999 : £1.4m). Gross capital investment in these businesses totalled £4.6m (1999 : £3.6m). TORRENT TRACKSIDE Torrent Trackside produced very satisfactory results for the year and consolidated its market leading reputation for quality and expertise. The industry now appears much clearer about the scale and direction of future infrastructure investment and Torrent's achievements over recent years have positioned it well to take advantage of the growing future workload. Turnover in the year totalled £4.1m (1999 : £3.6m) generating operating profit of £0.8m (1999 : £0.4m). Gross capital investment in rental equipment totalled £0.9m (1999 : £0.4m). OUTLOOK Arising from the developments outlined above, there have unfortunately been a significant number of redundancies in the Group and for those remaining, the refocusing process understandably presents a significant challenge. On behalf of the Board, I thank all concerned for their forbearance and understanding. I believe that this change in focus away from traditional general plant will improve shareholder returns in the medium term as the Group progressively moves to markets offering superior growth and return opportunities. Consequently, notwithstanding the significant costs that will be incurred in 2000/2001 through to the completion of the restructuring programme, I look forward to the current year with confidence. Jeremy Pilkington 26 June 2000 Vibroplant plc Consolidated profit and loss account for the year ended 31 March 2000 Existing Acquisitions Total Total Notes Operations 2000 2000 2000 1999 £000 £000 £000 £000 Turnover 53,671 1,331 55,002 52,510 Trading Profit 14,539 574 15,113 15,245 Depreciation (10,453) (138) (10,591) (10,441) Amortisation of goodwill (45) (38) (83) (28) Operating Profit 4,041 398 4,439 4,776 Profit on disposal of subsidiary company 4 1,487 - Loss on termination of businesses 4 (1,770) - Profit on ordinary activities before interest 4,156 4,776 Net interest payable (727) (1,472) Profit on ordinary activities before taxation 3,429 3,304 Taxation 5 (1,523) (662) Profit for the financial year 1,906 2,642 Dividends 7 - Interim paid (607) (635) - Final proposed (1,190) (1,224) Retained profit for the financial year 109 783 Earnings and diluted earnings per 5p ordinary share 6 4.22p 5.77p Earnings and diluted earnings per 5p ordinary share before exceptional items 6 5.94p 5.77p Dividend per 5p ordinary share 7 4.05p 4.05p Vibroplant plc Consolidated balance sheet 31 March 2000 31 March 1999 £000 £000 £000 £000 Fixed assets Intangible assets - goodwill 2,013 877 Tangible assets 54,382 57,912 Investments - own shares 796 552 57,191 59,341 Current assets Stocks 2,026 2,024 Debtors 15,580 16,236 Cash at bank and in hand 193 43 17,799 18,303 Creditors: amounts falling due within one year (17,677) (17,843) Net current assets 122 460 Total assets less current liabilities 57,313 59,801 Creditors: amounts falling due after more than one year (10,043) (13,250) Provisions for liabilities and charges (754) (133) Net assets 46,516 46,418 Capital and reserves Called up share capital 2,309 2,309 Share premium account 16,192 16,192 Revaluation reserve 1,646 2,180 Profit and loss account 26,342 25,710 Equity shareholders' funds 46,489 46,391 Equity minority interests 27 27 46,516 46,418 Vibroplant plc Consolidated cash flow statement for year ended 31 March 2000 31 March 2000 31 March 1999 £000 £000 £000 £000 Cash flow from operating activities 14,351 13,805 Return on investments and servicing of finance Interest paid (475) (710) Interest received 201 52 Interest element of finance lease rental payments (453) (814) Net cash outflow from returns on investments and servicing of finance (727) (1,472) Taxation UK corporation tax paid (494) (172) Capital expenditure and financial investment Purchase of tangible fixed assets (8,905) (14,332) Purchase of investments (275) (552) Sale of tangible fixed assets 5,994 6,430 Net cash outflow from capital expenditure and financial investment (3,186) (8,454) Acquisitions and disposals Purchase of businesses (net of cash and overdraft purchased) (1,827) (1,628) Equity dividends paid (1,831) (1,859) Cash inflow before financing 6,286 220 Financing Medium term loan - 6,000 Loan notes (107) 42 Capital element of finance lease rental payments (3,296) (3,730) Net (outflow) / inflow from financing (3,403) 2,312 Increase in cash in the year 2,883 2,532 Vibroplant Plc Notes 1. Basis of preparation This announcement has been prepared on the basis of the accounting policies set out in the Group's financial statements as at 31 March 1999 with the exception that the Group has amended its policies to adopt new Financial Reporting Standard FRS 15. In accordance with the new Standard, the Group will not adopt a policy of revaluation for land and buildings, however, as permitted by the transitional arrangements in the Standard, it will retain the current book values of those properties which have previously been revalued. 2. Total recognised gains and losses for the year ended 31 March 2000 All recognised gains and losses for the reporting periods are reflected in the consolidated profit and loss account. These all relate to continuing activities with the exception of the gain on the disposal of subsidiary company. 3. Reconciliation of movements in consolidated shareholders' funds for the year ended 31 March 2000 2000 1999 £000 £000 Profit for the financial year 1,906 2,642 Dividends (1,797) (1,859) 109 783 Goodwill (write off) / write back (11) 325 Net increase in shareholders' funds 98 1,108 Opening shareholders' funds 46,391 45,283 Closing shareholders' funds 46,489 46,391 4. Exceptional items The profit before tax is after the following exceptional credits / (charges). £000 Profit on disposal of subsidiary company 1,487 The environmental warranties under the contract for the sale of the US business in 1996 expired in February 2000, allowing the recognition of this element of the profit on the sale of the business, which was not recognised at the time of the transaction. This is the final element of the profit from the sale of the US business in 1996 and has no cash effect in the current year. Loss on termination of businesses £000 Write down of fixed assets and stock relating to the termination of part of the business (1,373) Accrual for costs associated with the termination of part of the business (397) (1,770) This exceptional loss relates to the termination of part of the business. This includes the Powered Access fleet sold to Lavendon plc, and other product groups. The termination of these activities followed a strategic review of the business which commenced in November 1999. 5. The high current year effective tax rate is due to the low estimated tax credit on the exceptional costs. The low rate in 1999 reflected the benefit to the tax charge of an agreement with the Inland Revenue relating to the tax on the sale of the US business in 1996. The tax charge on exceptional items is £493,000. 6. Earnings per share have been calculated on 45,162,965 shares (1999: 45,770,479) being the weighted average number of shares in issue during the year. Diluted earnings per share is based on 45,204,777 shares, this leaves the earnings per share unchanged. 7. The Directors are proposing a final dividend of 2.65 pence (1999: 2.65 pence) per share making a total dividend for the year of 4.05 pence (1999: 4.05 pence) per share which is payable on 3 October 2000 to shareholders on the register on 4 September 2000 8. Reconciliation of operating profit to net cash inflow from operating activities. 2000 1999 £000 £000 Operating profit 4,439 4,776 Depreciation and amortisation of goodwill 10,674 10,469 Profit on sale of tangible fixed assets (2,106) (2,371) Decrease / (increase) in stocks 63 (179) Decrease in debtors 388 1,168 Increase / (decrease) in creditors 893 (58) Net cash inflow from operating activities 14,351 13,805 9. Analysis of net debt As at Cash Other As at 1 April 99 Flow Non-cash 31 Changes March 00 £000 £000 £000 £000 Cash at bank and in hand 43 150 - 193 Overdraft (2,733) 2,733 - - Medium term loan (6,000) - - (6,000) Loan notes (42) 107 (300) (235) Finance leases and hire purchase (8,988) 3,296 (604) (6,296) (17,720) 6,286 (904) (12,338) 10. The financial information set out above does not constitute the company's statutory accounts for the years ended 31 March 2000 or 1999. The statutory accounts for 1999 have been delivered to the registrar of companies and those for 2000 will be delivered following the Company's Annual General Meeting. The auditors have reported on these accounts; their reports were unqualified and did not contain a statement under section 237 (2) or (3) of the Companies Act 1985. Copies of the full accounts for the year ended 31 March 2000 will be posted to shareholders in August and the Annual General Meeting will be held on Thursday 28 September 2000.

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