Final Results

Heath(Samuel) & Sons PLC 05 July 2007 SAMUEL HEATH AND SONS PLC PRELIMINARY RESULTS FOR THE YEAR ENDED 31ST MARCH 2007 CHAIRMAN'S STATEMENT We have enjoyed our most profitable year ever and are obviously pleased with the performance of the Company. Despite quite difficult conditions in some markets, we have managed to push sales ahead in most areas with the resultant increase in profitability. However, it has to be said that this must be seen in the context of sharply higher metal prices. The price of brass rose by 43% in the period. We were concerned that the higher prices necessitated for our products would cause problems. This did not prove to be the case in the short term, but could well have longer term repercussions. During the year, we had the chance to purchase the freehold of the part of the factory which we did not own outright, and this we duly did. As will be apparent from the accounts, the Group continues to have a strong balance sheet, and your Directors believe that a purchase of the Company's shares at the right price level could benefit the Company, and thereby its shareholders. Accordingly, your Directors are seeking your approval for the purchase of up to 15% of the issued share capital, 380,298 shares, between Annual General Meetings. During the last year, the Company bought back 11,496 shares. For the year in progress, life is going to prove very different. Increases in the cost of borrowing are meant to curb spending and this is exactly what they are doing, with the resultant effect on the Company's order book. It is said that it is six months for an increase to have an effect. If this is the case, we have hardly started yet. We also have a special problem in that the Government, in their wisdom, have altered a building regulation which used to make it compulsory to have door closers on some internal doors. In fairness, they did quite a lot of research before doing so, but appear to have been prepared to trade some possible increases in death by fire, for expediency. This is bound to have a considerable effect on some of our door closer products, one of which was invented by us some forty-five odd years ago. We have of course budgeted for these two factors for the coming year and the outturn is a considerably lower profit forecast. To partly offset this, we have an exciting new and extensive range of taps and accessories on sale, marketed under the name Fairfield. The newer and more sophisticated door closer, the Perko Powermatic, is also gaining market share all the time. It is clear however that new products, with their costs of launch and tooling, do not give the same return as the established ones. Our dividend policy has been made clear previously, and we continue to return cash to shareholders, recommending a same again final dividend of 12.5 pence per share. Sam Heath Chairman 5th July 2007 PROFIT AND LOSS ACCOUNT 2007 2006 Â£000 Â£000 Turnover 12,712 11,677 Cost of sales 5,702 5,045 ---------- ---------- Gross profit 7,010 6,632 Distribution costs 411 386 Administrative expenses 5,130 4,906 ---------- ---------- 5,541 5,292 ---------- ---------- Operating profit Net of contributions to pension deficit 964 873 Contributions to pension fund deficit 505 467 ---------- ---------- Operating profit 1,469 1,340 Net interest receivable Bank interest 99 121 Finance income/(expense) 165 (23) ---------- ---------- 264 98 ---------- ---------- Profit before taxation 1,733 1,438 Taxation 349 375 ---------- ---------- Profit on ordinary activities after taxation 1,384 1,063 Deduct : Dividends 2007 Interim of 11.0 pence per share 279 280 (2006: 2006 interim of 11.0 pence) 2006 Final of 12.5 pence per share 319 216 (2006: 2005 final of 8.5 pence) ---------- ---------- 598 496 ---------- ---------- Profit for the year retained 786 567 ---------- ---------- Earnings per share - Basic and Diluted 54.5p 41.7p BALANCE SHEETS Group Parent Company 2007 2006 2007 2006 Â£000 Â£000 Â£000 Â£000 Fixed assets Tangible assets 3,201 3,211 3,201 3,211 Investments - - 399 399 ---------- ---------- ---------- ---------- 3,201 3,211 3,600 3,610 ---------- ---------- ---------- ---------- Current assets Stocks 2,645 2,191 2,645 2,191 Debtors 2,135 2,154 2,135 2,154 Cash at bank 1,901 2,691 1,901 2,691 ---------- ---------- ---------- ---------- 6,681 7,036 6,681 7,036 ---------- ---------- ---------- ---------- Creditors: amounts falling due within one year Corporation tax 245 190 245 190 Amounts owed to Group undertakings - - 1,052 1,052 Other creditors 1,183 1,755 1,183 1,755 ---------- ---------- ---------- ---------- 1,428 1,945 2,480 2,997 ---------- ---------- ---------- ---------- Net current assets 5,253 5,091 4,201 4,039 ---------- ---------- ---------- ---------- Total assets less current liabilities 8,454 8,302 7,801 7,649 Provision for liabilities Deferred tax 292 400 292 400 Pension scheme deficit 548 806 548 806 ---------- ---------- ---------- ---------- 840 1,206 840 1,206 ---------- ---------- ---------- ---------- Net assets 7,614 7,096 6,961 6,443 ---------- ---------- ---------- ---------- Financed by Capital and reserves Called up share capital 254 255 254 255 Capital redemption reserve 109 108 109 108 Profit and loss account 7,251 6,733 6,598 6,080 ---------- ---------- ---------- ---------- Equity shareholders' funds 7,614 7,096 6,961 6,443 ---------- ---------- ---------- ---------- GROUP CASH FLOW STATEMENT for the year ended 31st March 2007 2007 2006 Â£000 Â£000 Â£000 Â£000 Net cash inflow from operating activities 405 1,234 Returns on investments and servicing of finance Interest received 99 121 ---------- ---------- Net cash inflow from returns on investments and 99 121 servicing of finance Taxation U.K. corporation tax paid (200) (157) Capital expenditure Purchase of fixed assets (490) (618) Sale of fixed assets 51 45 ---------- ---------- Net cash outflow from capital expenditure (439) (573) Management of liquid resources (Increase)/decrease in short-term deposits 603 (21) Financing Purchase of own shares (57) - ---------- ---------- Net cash outflow from financing (57) - Equity dividends paid (598) (496) ---------- ---------- Increase/(decrease) in cash (187) 108 ---------- ---------- The basic and diluted earnings per share are calculated by dividing the relevant profit after taxation of Â£1,384,000 (2006: Â£1,063,000) by the average number of ordinary shares in issue during the year being 2,538,700 (2006: 2,546,818). The number of shares used in the calculations is the same for both basic and diluted earnings. The Annual General Meeting has been fixed for Friday 17th August 2007 at 12 noon. The final Ordinary Share dividend of 12.5 pence will be declared payable on Friday 24th August 2007 to ordinary shareholders registered at close of business on Friday 27th July 2007. Section 240 Statement The financial information set out above does not constitute the company's statutory accounts for the year ended 31 March 2007 or 2006. Statutory accounts for 2006, which were prepared under UK GAAP, have been delivered to the Registrar of Companies, and those for 2007 prepared under UK GAAP, will be delivered in due course. The auditors have reported on the 2005 accounts; their report was unqualified, did not include references to any matters by way of emphasis without qualifying their report and did not contain statements under Section 237 (2) or (3) of the Companies Act 1985. This information is provided by RNS The company news service from the London Stock Exchange

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