Interim Results
Rap Group PLC
29 September 2000
Chairman's Statement
Financial results
The results for the half year to 30 June 2000 show a 17.5% decline in sales
to £8.73 million (1999: £10.57 million). This reflects the sale of RAP
Conveyors Limited during the period and the continuing contraction of the
old core businesses of rubber, safety products and glove distribution.
A loss of £1,463,000 (1999: £450,000) was recorded after re-organisation
costs of £407,000 and a loss on disposal of £378,000 relating to the sale of
the conveyor business.
The directors do not propose to pay an interim dividend (1999: nil).
Operational review
Sales during this period reduced by £1,176,000 due to the sale of RAP
Conveyors and the discontinuation of much of the glove business. RAP
Conveyors was disposed of for approximately £500,000, excluding the freehold
property.
Revenues from the old core business of rubber and safety products
distribution declined by 16.1%. We have completed a strategic review of the
operations and after the half year end closed the loss-making operation in
South Wales and consolidated our Middlesborough operation into our branch in
Sunderland.
The implementation of the new B2B e-commerce facility at Burnley has
contributed significantly to the 50% increase in sales of RAP Fixings during
the half year. This turnaround reverses the negative sales trend experienced
since its purchase in 1995. Sales at the gardening products company, Anderson
& Firmin, have suffered a similar decline since 1995. However, this decline
has been reduced over the period under review and in September 2000, we
launched a new B2B and B2C gardening web site at the Gardening Exhibition at
the NEC, as part of our initiatives to revive this business.
As reported in the Annual Report, the group purchased Touchline Network
Television Limited on 26 June 2000.
It was stated in the Annual Report that the group's property at Hamilton,
Scotland had been provisionally sold subject to planning permission. I am now
able to report that planning permission has been granted and the sale has
been completed for a sum of £471,500.
The Annual Report also included a statement concerning approaches that had
been received from third parties to purchase other parts of the group. These
discussions are progressing and the board believes that they will result in
the sale of the whole of the rubber, safety and glove business. If, and when,
contracts are exchanged, the board will recommend that the company approves
this sale at an Extraordinary General Meeting. The disposal of the old core
business of the group will remove many of the problems of declining sales
over a number of years. The proceeds from these disposals will be used to
reduce group indebtedness and provide funds for future development.
The rights issue completed on 4 August 2000 and all the 12,825,841 new shares
have been issued and approximately £2.3m of funds received.
The Board
As previously reported, Mr Andy Makeham joined the board on 1 July 2000 as
Director of Marketing, e-commerce. Andy joins the company from Kewill Systems
plc, a supplier of e-commerce solutions, where he was Sales and Marketing
Director of the ERP Division.
It is anticipated that John Griffith, Managing Director of Intershop (UK)
Limited, a supplier of e-commerce software, will be invited to join the
board as a non-executive director in the near future.
Prospects
Touchline Television has won several contracts and continues to perform well.
RAP Fixings has won a further substantial supply contract with a leading DIY
retailer and deliveries are planned to commence in January 2001. B2B e-
commerce sales from this division now amount to some 80% of its total sales.
JA Savage
Chairman
Consolidated Profit and Loss Account
For the six months ended 30 June 2000
Notes Unaudited Unaudited Audited
six months six months year
to 30 Jun to 30 Jun to 31 Dec
2000 1999 1999
£'000 £'000 £'000
Turnover - continuing operations 8,729 10,573 19,685
_________________________________
Operating loss - continuing 3
operations (1,305) (303) (1,368)
Interest payable and similar
charges (158) (147) (267)
_________________________________
Loss on ordinary activities
before taxation (1,463) (450) (1,635)
Tax on loss on ordinary
activities - - -
_________________________________
Loss for the financial period (1,463) (450) (1,635)
_________________________________
Loss per share
Basic 4 (11.9p) (3.7p) (13.3p)
Diluted 4 (11.9p) (3.7p) (13.3p)
Basic before exceptional items 4 (5.5p) (2.4p) (7.8p)
Statement of Total Recognised Gains and Losses
Notes Unaudited Unaudited Audited
six months six months year
to 30 Jun to 30 Jun to 31 Dec
2000 1999 1999
£'000 £'000 £'000
Retained loss for the period (1,463) (450) (1,635)
Unrealised deficit on revaluation
of freehold property - (10) (10)
_________________________________
Total recognised gains and losses
since the last annual report and
accounts (1,463) (460) (1,645)
_________________________________
Consolidated Balance Sheet
As at 30 June 2000
Notes Unaudited Unaudited Unaudited Audited
proforma as at as at as at
As at 30 Jun 30 Jun 31 Dec 31 Dec
2000 2000 1999 1999
(See note 8)
£'000 £'000 £'000 £'000
Fixed assets
Intangible assets 96 96 32 28
Tangible assets 2,427 2,577 2,973 2,829
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2,523 2,673 3,005 2,857
_________________________________________
Current assets
Stock 3,170 3,170 4,449 4,538
Debtors 4,252 4,252 5,093 4,795
_________________________________________
7,422 7,422 9,542 9,333
Creditors: amounts
falling due within one year (5,244) (7,594) (7,228) (8,022)
_________________________________________
Net current
(liabilities) assets 2,178 (172) 2,314 1,311
_________________________________________
Total assets less
current (liabilities)
assets 4,701 2,501 5,319 4,168
Creditors: amounts
falling due after more
than one year (55) (55) (489) (360)
Provisions for
liabilities and charges (473) (473) (319) (482)
_________________________________________
Net assets 4,173 1,973 4,511 3,326
_________________________________________
Capital and reserves
Called up share capital 1,282 641 616 616
Share premium account 5 6,603 5,344 5,259 5,259
Revaluation reserve 5 449 457 467 462
Profit and loss account 5 (4,161) (4,469) (1,831) (3,011)
__________________________________________
Equity shareholders' funds 4,173 1,973 4,511 3,326
__________________________________________
Consolidated cash flow statement
For the period ended 30 June 2000
Notes Unaudited Unaudited Audited
six months six months year
to 30 Jun to 30 Jun to 31 Dec
2000 1999 1999
£'000 £'000 £'000
Net cash (outflow) inflow from
operating activities (18) 15 193
Returns on investments and
servicing of finance (158) (147) (267)
Net capital expenditure and
financial investment (23) 20 (94)
Acquisitions and disposals 390 - -
______________________________
Cash inflow (outflow) before
financing 191 (112) (168)
Financing 9 (683) (262) (418)
______________________________
Decrease in cash in the period (492) (374) (586)
______________________________
Notes
1. The summarised results for the six months ended 30 June 2000, which are
unaudited, have been prepared in accordance with the accounting policies
adopted in the accounts for the year ended 31 December 1999.
2. The figures for the year ended 31 December 1999 have been extracted from
the statutory accounts which have been filed with the Registrar of
Companies. The audit report was unqualified and did not contain any
statement under section 237 (2) and (3) of the Companies Act 1985.
3. The operating loss for the six months ended 30 June 2000 included
exceptional costs as summarised below:
Unaudited Unaudited Audited
six months six months year to 31
to 30 June to 30 June December
2000 1999 1999
£'000 £'000 £'000
Reorganisation and closure
Centralisation of group functions - 45 201
Redundancy and closure costs 86 38 160
Reorganisation 135 32 75
Fixed asset write-offs - 20 20
Dilapidations provisions 26 28 28
Provision for legal claims - - 200
Stock write-offs 160 - -
Disposal of RAP Conveyors Ltd 378 - -
Property realisations - (5) (5)
_____________________________
785 158 679
_____________________________
4. Earnings per share for the six months ended 30 June 2000 is calculated by
dividing the loss attributable to ordinary shareholders of £1,463,000 by
the weighted average of the number of ordinary shares in issue during the
period of 12,339,577. (For the six months ended 30 June 1999, the loss
attributable to shareholders was £450,000 and the number of ordinary
shares in issue was 12,325,841. For the year ended 31 December 1999, the
loss was £1,635,000 and the weighted average number of ordinary shares in
issue was 12,325,841.)
5. Reserves
Share Revaluation Profit and Total
premium reserve loss
account
£'000 £'000 £'000 £'000
At 1 January 2000 5,259 462 (3,011) 2,710
Retained loss for the period - - (1,463) (1,463)
Issue of new ordinary shares 85 - - 85
Amortisation of revaluation
surplus - (5) 5 -
___________________________________________
At 30 June 2000 5,344 457 (4,469) 1,332
___________________________________________
6. On 26 June 2000 the company acquired Touchline Network Television
Limited, a company specialising in multi-media and e-commerce
development, for an initial consideration of 500,000 ordinary shares of
5p each. A further 330,000 ordinary shares of 5p each will be allotted
within twelve months of completion should certain profit targets be met
by Touchline.
7. Subsequent events
a) On 14 July 2000 the rights issue of 12,825,841 shares at 18p raising
£2.3 million was approved by the shareholders at an extraordinary
general meeting. The proceeds of £1.9 million net of costs were
received during July and August. A significant proportion of the
proceeds has been used to reduce group indebtedness.
b) On 25 September 2000 the sale of the property at 50 Union Street,
Hamilton, was completed for £471,500 following the granting of
planning permission. The group has decided to relocate the business to
its existing premises in Dundee. The proceeds of the sale are to be
used to reduce group indebtedness.
8. Unaudited proforma balance sheet
The unaudited proforma balance sheet includes the following adjustments
to the balance sheet at 30 June 2000 in respect of the subsequent events
referred to in note 7 a) and b) above:
Unaudited 30 Rights Sale of Unaudited
June 2000 issue property proforma
at Hamilton 30 June 2000
£'000 £'000 £'000 £'000
Fixed assets 2,673 - (150) 2,523
_________________________________________
Current assets 7,422 - - 7,422
Creditors: amounts falling due
within one year (7,594) 1,900 450 (5,244)
_________________________________________
Net current assets (172) 1,900 450 2,178
_________________________________________
Total assets less current
liabilities 2,501 1,900 300 4,701
Creditors: amounts falling due
after more than one year (55) - - (55)
Provisions for liabilities and
charges (473) - - (473)
_________________________________________
Net assets 1,973 1,900 300 4,173
_________________________________________
Capital and reserves 1,973 1,900 300 4,173
_________________________________________
9. Cash flow statement
Included in financing is repayment of the bank loan of £687,000.
10. The above information is being sent to the shareholders and is available
from the company's registered office: RAP House, Harrison Street,
Briercliffe, Burnley, Lancashire, BB10 2HP.