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Alumasc Group Plc (ALU)

  Print          Annual reports

Tuesday 12 February, 2002

Alumasc Group Plc

Interim Results

Alumasc Group PLC
12 February 2002



                  THE ALUMASC GROUP PLC- INTERIM ANNOUNCEMENT



•         Alumasc, the high specification engineering and building products
group, announces a much improved performance  in the half year to 31 December
2001 with the management team, under the direction of Paul Hooper, who joined
Alumasc as Group Managing Director in April 2001, making good progress on the
path of recovery and profit growth.



•         On turnover from continuing businesses up 5.4% at £56.2 m, pre-tax
profit was 56.6% ahead at
£3.3 m and EPS 66.6% higher at 6.5p, additionally reflecting the Group's share
repurchase activity in the prior year.



•         With a view to restoring satisfactory dividend cover, the Directors
have declared an unchanged interim dividend per share of 2.45p.



•         The Engineering Division increased its profit by 38% to £2.1 m on
turnover 5.2% ahead at £39.2 m.  The Precision Components' businesses moved
ahead strongly whilst the Industrial Products companies also contributed to the
stronger first half performance, including recovery in sales to the brewing
industry.



•         Investment continued in the period in line with the plan to double the
capacity of Alumasc Precision Components in the medium term.



•         The Building Products Division had a good half year with sales
increasing by 5.7% to £16.9 m and profit 55% ahead at £1.4 m.  Alumasc Interior
Building Products and Alumasc Construction Products had excellent performances
following new product and market initiatives combined with improved operational
efficiencies.



•         John McCall, Chairman, stated 'Despite the general economic
uncertainty, the actions taken to strengthen our business and the continuing
health of our order books give encouragement for further progress in the second
half year.'






Enquiries:

The Alumasc Group                                                  01536-383 844
John McCall (Chairman)
Paul Hooper (Group Managing Director)

Bankside Consultants Limited       
Charles Ponsonby                                                   020-7444 4166




                              CHAIRMAN'S STATEMENT



OVERVIEW

Progress in our core business and recovery from the set-backs of the previous
year have resulted in a much improved performance in the half year to 31
December 2001.


Turnover of £56.2 million from continuing businesses was £2.9 million (5.4%)
ahead of the previous year. Profit before tax of £3.3 million was £1.2 million
(56.6%) ahead, benefiting from business improvement plans implemented in 2001
and growth in  turnover. Earnings per share of 6.5p were 66.6% higher,
reflecting the higher profit and the fewer shares in issue following the Group's
share repurchase activity in the prior year.



The period witnessed both the bringing into production of new work which had
been under development during the previous year and a more general recovery in
activity. In the comparable period last year, the Group had experienced the
worst of its difficulties in relation to the Rover Group, the absence of demand
from its brewery customers, and the effects of exceptionally adverse weather
conditions on UK construction.



Against this background, a creditable result was achieved in the half year with
the management team, under the direction of Paul Hooper, who joined Alumasc as
Group Managing Director in April 2001, making good progress on the path of
recovery and profit growth.



OPERATIONS



Both divisions of the Group moved ahead of the prior year following a sustained
focus on operational efficiencies combined with increased sales.



The Engineering division profit of £2.1 million increased by £0.6 million (38%)
on turnover of £39.2 million, 5.2% ahead.  The Precision Components' businesses
moved ahead strongly, recovering much of the Rover-related volume loss of the
previous year.  During this period, Land Rover launched the Freelander in the
USA and Rover Cars experienced increased demand from new product launches.  The
division also commenced volume supply to new customers such as BMW, Filtronic
and Giroflex. The recovery in demand from established customers combined with
new product introductions put pressure on operations, causing cost over-runs
which will be brought under control as the high level of activity continues into
the second half year.  Investment in the division continued in line with the
plan to double the capacity of Alumasc Precision Components in the medium term.



The Industrial Products companies also contributed to the stronger first half
performance, including recovery in sales to the brewing industry. Operational
improvements contributed to the performance of our brewery related companies and
Interbrew's divestment of Carling Brewers to Coors Brewing Company should bring
further stability into this sector. Bissell was restructured to meet the
increasing challenge of imported low cost spring products and Brock Metals
maintained its strong performance despite the weak industrial environment, which
saw continued rationalisation of the supply side in the metals sector.



The Building Products' division had a good half year with sales increasing by
5.7% to £16.9 million and profit of £1.4 million ahead by £0.5 million (55%).
The division benefited from concerted activity to improve operational
performance as well as the absence of the abominable weather conditions of the
previous year.  Actions to reduce costs included the closure of three satellite
manufacturing operations in Alumasc Exterior Building Products and headcount
reductions throughout this division.  Alumasc Interior Building Products and
Alumasc Construction Products had excellent performances following new product
and market initiatives combined with improved operational efficiencies.
Leonardo, the Group's 70% owned internet services business, continued to make
progress, achieving its interim targets in the half year.



The business improvement plans implemented during the first half year should
benefit profits in the second half, supported by order books which continue to
move ahead of last year.  Our ability to win new customers such as BMW,
Filtronic and Caterpillar is testament to the Group's differentiated market
position. Our businesses will continue to work closely with their customers in
order to meet the ever increasing requirements of our chosen market place.




FINANCIAL



In common with many other businesses, Alumasc moved to defined contribution
pension arrangements for new employees in the late 1990's, when its two defined
benefit schemes were closed to new entrants. The profit for the half year
contains an increased pension charge based on actuarial advice following the
triennial valuation of one of the two schemes.



Net borrowings rose by £2.2 million to £6.3 million in the half year to 31
December 2001, as a result of continued investment to expand Alumasc Precision
Ltd and higher stocks reflecting increased activity levels. Gearing at 31
December 2001 was 18.6% (30 June 2001 : 12.6%).



The Group has agreed £6.5 million of fixed asset-backed credit lines with its
bankers, with the intention of transferring part of its overdraft borrowings to
this facility over the next 12 months. The first tranche of £1.6 million of such
borrowings was drawn down in December 2001.



PEOPLE



I am delighted to welcome Richard Saville as a non-executive Director of Alumasc
with effect from 1 January 2002. His knowledge of the Industrial and
Construction sectors, most recently as Finance Director of George Wimpey plc,
will be of real value in the development of our Group.



DIVIDEND AND PROSPECTS



With a view to restoring satisfactory dividend cover, the Directors have
declared an unchanged interim dividend of 2.45p per share, which will be payable
on 8 April 2002 to shareholders on the register at close of business on 8 March
2002.



Despite the general economic uncertainty, the actions taken to strengthen our
business and the continuing health of our order books give encouragement for
further progress in the second half year.




J S McCall
Chairman & Chief Executive                                     12 February 2002


                      UNAUDITED CONSOLIDATED BALANCE SHEET

                              at 31 December 2001


                                                                 31 December         31 December          30 June

                                                                        2001                2000             2001

                                                                        £000                £000             £000
Fixed assets

Intangible assets                                                         68                 347               74
Tangible assets                                                       30,850              28,642           29,120
Investments                                                              452                 462              432
                                                                 ___________         ___________        _________
                                                                      31,370              29,451           29,626
                                                                 ___________         ___________        _________
Current assets

Stocks                                                                12,654              11,940           10,896
Debtors                                                               22,412              25,197           23,579
                                                                 ___________         ___________        _________
                                                                      35,066              37,137           34,475
                                                                 ___________         ___________        _________
Creditors:  amounts falling due within one year
Trade and other creditors                                             26,195              24,973           25,893
Taxation                                                               1,331               1,564              495
Proposed dividend                                                        850                 892            2,098
                                                                 ___________         ___________        _________
                                                                      28,376              27,429           28,486
                                                                 ___________         ___________        _________
                                                                 ___________         ___________        _________
Net current assets                                                     6,690               9,708            5,989
                                                                 ___________         ___________        _________

Total assets less current liabilities                                 38,060              39,159           35,615


Creditors: amounts falling due after more than one year                3,952               3,187            2,794

Provisions for liabilities and charges                                   346                 170              451


Equity minority interest                                                  92                 187              114

                                                                 ___________         ___________        _________


Net assets                                                            33,670              35,615           32,256
                                                                 ___________         ___________        _________

Capital and reserves

Called up share capital                                                4,352               4,570            4,352
Share premium                                                         26,907              26,907           26,907
Revaluation reserve                                                    2,168               2,271            2,168
Capital redemption reserve                                               693                 475              693
Profit and loss account                                                (450)               1,392          (1,864)
                                                                 ___________         ___________        _________


Shareholders' funds (note 8)                                          33,670              35,615           32,256
                                                                 ___________         ___________        _________



                 UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT

                     for the half year to 31 December 2001


                                                                                                 Half  year

                                                                                           31 December 2001
                                                                                           ________________

                                                                                      Continuing activities

                                                                                                       £000


Turnover  (note 2)                                                                                   56,200
                                                                                           ________________

Operating profit / (loss)                                                                             3,491

Share of operating profit in associates                                                                  20

Loss on sale of business activities                                                                       -

Interest                                                                                              (226)

                                                                                           ________________

Profit / (loss) on ordinary activities before taxation  (note 2)                                      3,285

Taxation (charge) / credit (note 3)                                                                 (1,020)

                                                                                           ________________

Profit / (loss) on ordinary activities after taxation                                                 2,265



Equity minority interest                                                                                (1)

                                                                                           ________________

Profit / (loss)  for the financial period attributable to the members

of the parent company                                                                                 2,264



Dividends                                                                                               850

                                                                                           ________________

Retained profit / (loss) for the financial period                                                     1,414

                                                                                           ________________



Earnings per share and diluted earnings per share (note 4)                                             6.5p

                                                                                           ________________



Dividend per share (note 5)                                                                           2.45p

                                                                                           ________________






                 STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES



There are no recognised gains or losses other than the profits attributable to
shareholders of the Company of £2,264,000 for the half year to 31 December 2001
(£1,231,000 for the half year to December 2000 and £2,145,000 for the year to 30
June 2001).



                      Half year                                                    Year

                  31 December 2000                                             30 June 2001
            _________________________________________     ________________________________________
     Continuing         Discontinued                             Continuing      Discontinued
     activities           activities                             activities        activities
                                                Total                                                       Total
           £000                 £000             £000                  £000              £000                £000

         53,331                4,847           58,178               108,987             7,607             116,594
    ___________     ___________             _________            __________       ___________           _________

          2,148                (392)            1,756                 4,372             (482)               3,890

             33                    -               33                     8                 -                   8
              -                    -                -                     -             (562)               (562)
           (83)                    -             (83)                 (328)                 -               (328)
    ___________          ___________        _________            __________       ___________           _________
          2,098                (392)            1,706                 4,052           (1,044)               3,008

          (634)                  122            (512)               (1,085)               157               (928)
    ___________          ___________        _________            __________       ___________           _________
          1,464                (270)            1,194                 2,967             (887)               2,080

             37                    -               37                    65                 -                  65
    ___________          ___________        _________            __________       ___________           _________


          1,501                (270)            1,231                 3,032             (887)               2,145

            892                    -              892                 2,948                 -               2,948
    ___________          ___________        _________            __________       ___________           _________
            609                (270)              339                    84             (887)               (803)
    ___________          ___________        _________            __________       ___________           _________

           3.9p               (0.7)p             3.2p                  8.3p            (2.5)p                5.8p
    ___________          ___________        _________            __________       ___________           _________

                                                2.45p                                                        8.5p
                                            _________                                             _______-------_



                   UNAUDITED CONSOLIDATED CASH FLOW STATEMENT

                     for the half year to 31 December 2001


                                                                  Half Year           Half Year             Year

                                                                31 December         31 December          30 June

                                                                       2001                2000             2001

                                                                       £000                £000             £000

Cash inflow from operating activities  +                              3,376               2,207            6,307

                                                                ___________         ___________        _________
Returns on investments and servicing of finance

Net interest                                                          (226)                (83)            (328)
Dividends paid to minority shareholders                                (23)                   -                -
                                                                ___________         ___________        _________
                                                                      (249)                (83)            (328)

                                                                ___________         ___________        _________
Taxation

UK corporation tax paid                                                (56)               (825)          (2,325)
                                                                ___________         ___________        _________
Capital expenditure and financial investment

Purchase of tangible fixed assets                                   (3,687)             (2,215)          (5,052)
Proceeds from sale of tangible fixed assets                             132                 470              547
                                                                ___________         ___________        _________
                                                                    (3,555)             (1,745)          (4,505)
                                                                ___________         ___________        _________
Acquisitions and disposals

Proceeds from sale of business activities                               380                   -            1,220
Purchase of subsidiary undertaking                                        -                   -              (6)
Purchase of business activities                                           -                   -            (314)
                                                                ___________         ___________        _________

                                                                        380                   -              900

                                                                ___________         ___________        _________
                                                                ___________         ___________        _________

Equity dividends paid                                               (2,098)             (2,358)          (3,208)

                                                                ___________         ___________        _________
Financing

Repurchase of ordinary share capital                                      -             (3,540)          (5,752)
New finance leases                                                    1,558                   -                -
Repayment of debt                                                         -               (477)            (784)
                                                                ___________         ___________        _________
                                                                      1,558             (4,017)          (6,536)
                                                                ___________         ___________        _________



Decrease in cash in the period (note 7)                               (644)             (6,821)          (9,695)

                                                                ___________         ___________        _________

+ Reconciliation of operating profit to net cash inflow from operating activities

Operating profit                                                      3,491               1,756            3,890
Depreciation                                                          1,820               1,659            3,576
Amortisation of goodwill                                                  6                   9                5
Goodwill impairment                                                       -                   -              318
Loss / (profit) on disposal of tangible fixed assets/                     5                (66)            (108)
investments
Increase in working capital                                         (1,753)               (847)            (938)
Warranty and other provisions                                         (193)               (304)            (436)
                                                                ___________         ___________        _________
                                                                      3,376               2,207            6,307
                                                                ___________         ___________        _________



                        NOTES ON THE UNAUDITED ACCOUNTS

                              at 31 December 2001





1.            BASIS OF PREPARATION



The interim financial statements for the half year ended 31 December 2001 have
been prepared in accordance with the accounting policies detailed in the 2001
Annual Report & Accounts except for the change in accounting policy as disclosed
in note 6.  The financial information for the year ended 30 June 2001 is an
abridged version of the financial statements filed with the Registrar of
Companies, on which the auditors gave an unqualified report.  The financial
information for the half year ended 31 December 2000 is restated for business
activities discontinued in the six months to 30 June 2001.  The interim report
is being posted to shareholders and copies are available to the public at the
registered office, Burton Latimer, Kettering, Northamptonshire NN15 5JP.



2.            TRADING


                                                 Half year                         Half year

                                              31 December 2001                 31 December 2000
                                               Turnover         Profit           Turnover         Profit
                                                   £000           £000               £000           £000

Engineering Products                             39,244          2,141             37,301          1,550
Building Products                                16,906          1,426             15,995            919
Leonardo                                             50           (56)                 35          (288)
                                                _______         ______             ______         ______
                                                 56,200          3,511             53,331          2,181
Discontinued                                          -              -              4,847          (392)
                                                 ______         ______             ______         ______
                                                 56,200          3,511             58,178          1,789
                                                 ______                            ______
Interest                                                         (226)                              (83)
                                                                ______                            ______
Profit before tax                                                3,285                             1,706
                                                                ______                            ______



3.      TAXATION



The taxation provided is based on an estimated effective rate for the year.  The
increased effective rate reflects the deferred tax recognised under Financial
Reporting Standard 19 (see note 6) on timing differences.


                                               Half Year                Half Year                   Year

                                             31 December              31 December                30 June

                                                    2001                     2000                   2001

                                                    £000                     £000                   £000
Corporation tax                                      891                      512                    928

Deferred tax                                         129                        -                      -
                                                   _____                    _____                  _____
                                                   1,020                      512                    928
                                                   _____                    _____                  _____





4.      EARNINGS PER SHARE



Earnings per share is based on the weighted average number of ordinary shares in
issue for the period of 34,816,788  (31 December 2000: 38,101,476; year ended 30
June 2001: 36,718,322).



5.      DIVIDENDS



The directors have declared an interim dividend per share of 2.45p (2000: 2.45p)
which will be paid on 8 April 2002 to shareholders on the register at the close
of business on 8 March 2002.



6.        CHANGE IN ACCOUNTING POLICY



Alumasc has adopted Financial Reporting Standard 19 'Deferred Tax' in the
period.  The main change arising from the adoption of this standard is that
deferred tax is recognised in respect of all timing differences that have
originated but not reversed at the balance sheet date.  The effect of this
change on previous periods is insignificant; thus neither net assets at 31
December 2000 and 30 June 2001 nor profit after tax for the period to 31
December 2000 and year to 30 June 2001 have been adjusted.



7.      RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET (DEBT)/CASH


                                                               Half Year       Half Year            Year

                                                             31 December     31 December         30 June

                                                                    2001            2000            2001

                                                                    £000            £000            £000

     Decrease in cash in period                                    (644)         (6,821)         (9,695)

     Cash (inflow) / outflow from change in debt and
     lease financing                                             (1,558)            477             784
                                                                 
                                                                  ______          ______          ______

     Movement in net debt in the period                          (2,202)         (6,344)         (8,911)

     Net (debt) / cash at start of period                        (4,072)           4,839           4,839

                                                                  ______          ______          ______
     Net debt at end of period                                   (6,274)         (1,505)         (4,072)
                                                                  ______          ______          ______



8.    RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS


                                                            Half Year        Half Year             Year

                                                          31 December      31 December          30 June

                                                                 2001             2000             2001

                                                                 £000             £000             £000

    Retained profit / (loss) for the financial                  1,414              339            (803)
    period
    Repurchase of shares                                            -          (3,540)          (5,752)
    Exchange difference                                             -                -              (5)
                                                               ______           ______           ______

    Net addition to / (reduction in) shareholders'
    funds                                                       1,414          (3,201)          (6,560)

    Opening shareholders' funds                                32,256           38,816           38,816

                                                               ______           ______           ______

     Closing shareholders' funds                               33,670           35,615           32,256

                                                               ______           ______           ______







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