Interim Results

Lawrence PLC 20 December 2001 Interim results of Lawrence plc for the six months ended 30th September 2001 * Important new drug registrations gained for ECOMECTIN and AIVLOSIN. * Interim dividend increased by 10.7%. * Over £0.5 million cash generated in the first half. * Second half has started well. Peter Lawrence, Chairman, said: ' We are very excited about our new drug registrations which should lead to a significant improvement in sales for ECO Animal Health next year.' FURTHER INFORMATION * Michael Brent (executive director): 020 8336 2900 * Anthony Spiro (Spiro Financial): 020 8336 2900 * Robert Corden (Charles Stanley & Company Limited): 020 7953 2219 CHAIRMAN'S STATEMENT I am pleased to report that the Group continued to expand in the six months to 30th September 2001 with turnover reaching £16.6 million, over 8 per cent ahead of the equivalent period last year. Operating profit was lower at £1.21 million. Earnings per share before exceptional item and amortisation of goodwill were 15.7 pence compared with 18.7 pence last year. The reduction of approximately £0.86 million in profit from the comparable period last year reflects the short-term impact of recent significant investment for long-term growth, especially at ECO Animal Health which I discuss below. We are convinced that this is the right approach for a business of our type where we are involved in long term development programmes and must ensure that we have the people and systems in place to capitalise quickly and efficiently on opportunities as they arise. On 2nd October 2001 I advised shareholders that receivers had been appointed at Idatchi Group Ltd, a company in which Lawrence PLC held a 34.5 per cent equity investment. The Board and its advisors, with the information they had to hand at the time, believed that our exposure was in the region of £1.7 million after tax. Over the following weeks the receiver has been able to carry out an in depth analysis of Idatchi and its liabilities and in the light of that work we have increased the provision in our accounts to £2.656 million which is equivalent to approximately £2.2 million after tax. The Board is confident that this provision covers our total exposure. Our finances remain robust and our cash flow is positive. In the period under review we generated a net cash inflow of over half a million pounds. The Board has demonstrated its confidence in the trading position by declaring an interim dividend of 3.1 pence (net) per share, which is 10.7 per cent above the same period last year. The dividend will be paid on 6th April 2002 to shareholders on the register at the close of business on 4th January 2002. ECO GROUP: ECO Animal Health has continued to make good progress with sales over 30% ahead of the same period last year. Some new drug registrations have been obtained including ECOMECTIN for the UK and Australia, AIVLOSIN and ECOMECTIN for China and we have met the filing deadline for our Pan European application for AIVLOSIN. We anticipate receiving registrations for respiratory disease and mycoplasma in pigs by the middle of next year. Our registration department has been further strengthened with the arrival of a clinical veterinarian, although, as always, we continue to be frustrated by the ever-growing international bureaucracy associated with drug registrations. We remain optimistic that significant improvement to Group contribution will occur over the next couple of years as our registrations are received for all 'indications' (diseases), including those for Europe and the United States. AGIL: As leaders in nutraceutical feeding technology it is imperative that our new ideas and product launches keep us ahead in our field. The recent introduction of MiteX, FOSPLUS and SALKIL EO has all been well received. MiteX is a natural, non-toxic insecticide, which kills mites and lice. Orders are beginning to grow promisingly for this new product, which is used for poultry. FOSPLUS is an acid-free gut stimulant combined with toxin remover for wet feeding of pigs, which in trials has shown an improvement in both food conversion and animal health. This product is beginning to sell well in Europe. SALKIL EO has been especially developed for the Japanese market and is our improved salmonella bio security additive. AGIL is facing a challenging time in markets where there is increased competition for 'fashionable' nutroceutical products. Some registration transfer problems relating to the change of some of our distributors around the world caused a short-term discontinuity of supply. However, new registrations are now in place and this, coupled with the new distributors we have trained, gives us confidence that the division will deliver a stronger performance in the second half. BLACKFAST: Our continued focus on building our overseas distribution network has delivered further profit growth. The thrust of our promotion to install large automatic and semi-automatic blacking systems is showing good results, which is encouraging for the future development of this division. INTERPET: This division advanced sales in the period and the response to our pre-season deals for water gardening products, offered at the annual Garden and Leisure Equipment Exhibition (GLEE) held in September, should give us a strong finish for the year. During the first half we launched some 50 new products, including Thermopump, a unique heater and combined filter pump for aquariums. This product was awarded Best New Aquatic Product at GLEE. New soft grip handles have been introduced to our Mikki range of pet grooming tools and several new book titles were introduced at the Frankfurt Book Fair and we have received good orders. We have also secured the UK distributorship for Pet Safe products of America, which include perimeter training systems for dogs and also door flaps. Our new distribution centre in Bridgwater has settled in well and we are encouraged by the progress being made. INVESTMENTS: We have been 34.5% shareholders in the Idatchi Group since 1992. Idatchi was a UK business comprising a number of subsidiaries manufacturing and distributing dry and wet colour blending products and artist colours and crayons. The main trading company of Idatchi, Haeffner Industries Limited, was a profitable and growing speciality chemicals distribution business. When we made our original investment we felt that our technology and specialist chemical knowledge was compatible with Idatchi's sphere of operations. Regrettably Idatchi's accelerated expansion programme coupled with a number of internal management and control problems, led to the Idatchi Group being put into receivership. As a major shareholder and creditor we had the opportunity to put further funds into the company to allow it to continue trading. After careful study your Board concluded that it was not prepared to take any action that would put its shareholders funds at further risk. While we are extremely upset that Lawrence plc has been required to write off its investment we are convinced that our decision was correct for the company and its shareholders. This event, coupled with the problems at Amberley Group plc, where we are also shareholders, has been a chastening and painful experience and made us truly determined never again to be involved in holding minority stakes in businesses where we do not have management control. I would like to extend my sincerest apologies to all our shareholders and employees for this appalling waste of our very hard-earned funds. OUTLOOK: The second half has started well and we have been encouraged by the receipt of more regulatory approvals for our ECO products, which is very important. While the slow down in the major economies and the impact of terrorism has created an uncertain outlook, we look to the future with confidence. I am convinced that businesses like ours will continue to grow and prosper because they are financially sound, well managed and focussed on building shareholder value for the long term. 20 December 2001 Peter A Lawrence CONSOLIDATED PROFIT AND LOSS ACCOUNT Six months Six months Year ended ended ended 30.09.01 30.09.00 31.03.01 (unaudited) (unaudited) (audited) £000 £000 £000 TURNOVER Continuing operations 16,554 15,283 31,909 Cost of sales (10,351) (9,293) (19,418) ------------- ------------- ------------- GROSS PROFIT 6,203 5,990 12,490 Administrative expenses (4,997) (3,925) (8,334) ------------- OPERATING PROFIT 1,206 2,065 4,156 Share of profit of associated undertakings - 60 40 and provisions ------------- ------------- ------------- 1,206 2,125 4,196 Income from investments 10 73 19 ------------- ------------- ------------- 1,216 2,198 4,215 EXCEPTIONAL ITEM Provision for diminution in value of investments (2,656) (375) (475) Interest payable (158) (165) (280) ------------- ------------- ------------- PROFIT/(LOSS) ON ORDINARY (1,598) 1,658 3,460 ACTIVITIES BEFORE TAXATION Taxation 55 (464) (853) ------------- ------------- PROFIT/(LOSS) AFTER TAX (1,543) 1,194 2,607 Minority interest (11) (255) (550) PROFIT/(LOSS) FOR PERIOD (1,554) 939 2,057 Dividends (222) (199) (895) RETAINED PROFIT/(LOSS) ------------- ------------- ------------- TRANSFERRED TO RESERVES (1,776) 740 1,162 ------------- ------------- ------------- EARNINGS PER SHARE PRIOR TO GOODWILL AMORTISATION AND EXCEPTIONAL ITEM 15.7p 18.7p 37.6p BASIC EARNINGS PER SHARE (21.7)p 13.1p 28.7p FULLY DILUTED EARNINGS PER SHARE (21.4)p 13.0p 28.3p CONSOLIDATED BALANCE SHEET Six months Six months Year ended ended 30.09.01 ended 30.09.00 31.03.01 (unaudited) (unaudited) (audited) £000 £000 £000 FIXED ASSETS Intangible Assets 3,172 2,775 2,962 Tangible Assets 1,646 1,594 1,662 Investments 1,077 2,303 2,188 ------------- ------------ ------------ 5,895 6,672 6,812 CURRENT ASSETS Stock 8,112 8,107 8,086 Debtors 9,690 9,044 11,341 Cash at Bank and in Hand 476 235 401 ------------- ----------- ------------ 18,278 17,386 19,828 CREDITORS Amounts falling due within one (10,957) (9,989) (11,696) year ------------- ------------ ------------ NET CURRENT ASSETS 7,321 7,397 8,132 TOTAL ASSETS LESS 13,216 14,069 14,944 CURRENT LIABILITIES CREDITORS Amounts falling due after more than one year (1,076) (992) (1,177) ------------ ------------ ------------ NET ASSETS 12,140 13,077 13,767 ------------ ----------- ------------ CAPITAL AND RESERVES Called up share capital 717 716 716 Share Premium 3,261 3,246 3,246 Capital Redemption Reserve 106 106 106 Profit and Loss Account 8,000 9,198 9,617 Minority Interest 56 (189) 82 ------------ ------------ ------------ SHAREHOLDERS' FUNDS 12,140 13,077 13,767 ------------ ------------ ------------ CONSOLIDATED CASH FLOW STATEMENT Six months ended Year ended Note 30.09.01 31.03.01 (unaudited) (audited) £000 £000 NET CASH INFLOW FROM (1) 1,788 2,050 OPERATING ACTIVITIES ----------- ----------- RETURNS ON INVESTMENT AND SERVICING OF FINANCE Interest Received 31 65 Interest Paid (189) (345) Dividends Received 10 19 NET CASH OUTFLOW FROM ----------- ----------- RETURNS ON INVESTMENT AND SERVICING OF FINANCE (148) (261) ----------- ----------- TAXATION (324) (999) CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT Purchase of Intangible (402) (786) Fixed Assets Purchase of Tangible Fixed (149) (448) Assets Sale of Tangible Fixed 7 27 Assets NET CASH (OUTFLOW) FROM ----------- ----------- CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT (544) (1,207) ----------- ----------- EQUITY DIVIDENDS PAID (200) (816) FINANCING Issue of shares 16 - Increase/(repayment) (58) 2 of borrowing ----------- ---------- NET CASH INFLOW (OUTFLOW) (42) 2 FROM FINANCING ----------- ---------- INCREASE/(DECREASE) (2) 530 (1,231) IN CASH ----------- ---------- Notes (1) RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES Operating Profit 1,206 4,157 Exchange losses (96) (5) Depreciation charge 150 276 Amortisation charge 192 319 Profit/Loss on disposal of fixed asset 7 (5) investments Increase in stocks. (26) (838) Decrease/(Increase) in debtors 306 (1,775) Increase/(Decrease) in creditors 49 (79) ----------- ----------- Net Cash Inflow from operating activities 1,783 2,050 ----------- ----------- (2) RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT (Decrease)/Increase in cash in the period 530 (1,231) Decrease/(Increase) in debt 58 (2) ----------- ---------- Change in net debt resulting from cash flows 588 (1,233) Effect of foreign exchange losses 218 (11) ----------- ---------- Movement of net debt in the period 806 (1,244) Net Debt at 1st April 2001 (5,050) (3,806) ----------- ---------- Net Debt at 30th September 2001 (4,244) 5,050 ----------- ---------- (3) RECONCILIATION ANALYSIS OF CHANGES IN NET DEBT At 1.4.01 Cash flow Exchange At 30.9.01 Movements £000 £000 £000 £000 Cash at Bank 401 75 - 476 and in Hand Overdrafts (3,850) 455 - (3,395) ----------- ---------- ----------- ----------- (3,449) 530 - (2,919) Debt (1,601) 58 218 (1,325) ----------- ----------- ---------- ----------- (5,050) 588 218 (4,244) ------------- ------------- ------------ ------------ NOTES TO THE INTERIM REPORT The summarised results of the half year to 30th September 2001, which are unaudited, have been prepared in accordance with the accounting policies in the Accounts for the period ended 31st March 2001. The results for the first half of the 2001/02 financial year have not been audited. The summary of results for the year ended 31st March 2001 does not constitute full financial statements within the meaning of Section 240 of the Companies Act 1985. The full financial statements for that year have been reported on by the company's auditors and delivered to the Registrar of Companies. The audit report was unqualified and did not contain a statement under Section 237 (2) or Section 237 (3) of the Companies Act 1985. The directors have declared an interim dividend of 3.1p per share (2000: 2.80p), payable on 6th April 2002 to shareholders on the register on 4th January 2002. The calculation of earnings per ordinary share is based on the profit for the period and 7,166,440 ordinary shares (2000: 7,158,329) being the weighted average number of shares in issue during the half year. The weighted average number of shares in issue during the year ended 31st March 2001 was 7,160,324. The interim report was issued to the Stock Exchange and the press on 20th December 2001 and will be posted to shareholders. Further copies of the Interim Report are available at the Company's Registered Office. DIRECTORS Peter A .Lawrence (Chairman) & OFFICERS Michael E. Brent (Director) John W. Dick (Non-Executive Director) Kevin Stockdale (Company Secretary) REGISTERED 78 Coombe Road, New Malden, Surrey KT3 4QS OFFICE Tel: 020-8336 2900 Fax: 020-8336 0909 NUMBER 1818170 REGISTRARS Capita Moorgate, Dukesmead House, 39 High Street, Chelmsford CM1 DE Tel: 01245 494549 Fax: 01245 494564

Companies

ECO Animal Health Group (EAH)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today