Information  X 
Enter a valid email address

Meriden Group PLC (MRD)

  Print      Mail a friend

Tuesday 31 January, 2006

Meriden Group PLC

Final Results

Meriden Group PLC
31 January 2006



31 January 2006

Enquiries:

Russell Stevens                 07860 562621
Chief Executive                 [email protected]

Jonathan Wright                 020 7107 8000
Seymour Pierce Limited




                Meriden Group Plc (the 'Company' or 'the Group')

              Preliminary results for the year ended 31 July 2005

Highlights

   • During the year the Group made pre tax losses of £873,005 (2004: profit
     £569,697) on a turnover of £8,891,713 (2004: £7,513,513)

   • Sale of the Group's Publishing Division to its management and closure of
     the Scottish branch of our Logistics Division.

   • Results include both the trading losses of these activities which,
     together with the costs of providing for closure, have been significant and
     have therefore detrimentally impacted on our full year results.

   • French logistics operation is currently being evaluated. The French
     logistics operation, which traded at breakeven prior to the closure of our
     Scottish operation, is continuing to incur significant losses in the current
     financial year.

   • The Employee Benefits Division which was launched last year has won and
     continues to win, a large number of prestige clients.

   • The remaining core divisions of IT solutions, Marketing &
     Communications, Management Consultancy and Outsourcing have delivered
     acceptable results.


Financial Highlights

   • The operating profit on the Group's continuing activities of £101,710
     have therefore been eliminated by the losses on the closing activities of
     £879,455 resulting in an overall operating loss of £777,745

   • Core business delivering sustained and resilient profits

   • Final dividend for 2004/2005 of 0.006 pence per share.

   • (Loss)/Earnings per share of (0.29) pence (2004 : 0.13 pence)


Commenting, Russell Stevens, Chief Executive said:

'Two of our 2004 acquisitions failed to perform and management has taken the
tough decision of closing these operations. Our remaining core divisions have
continued to be profitable during the financial year. Indeed our recently
acquired Employee Benefits division has now established itself and has announced
some major blue chip account wins, with more announcements to follow. Our loss-
making French Logistics business is currently being evaluated. However, the
basic building blocks for success are in place and as a result the group is
poised for a period of sustained growth and we look forward to the future with
confidence'



Chairman's Statement

I am pleased to present this, my 2005 Chairman's report for Meriden Group plc.

During the year the Group made pre tax losses of £873,005 (2004: profit
£569,697) on a turnover of £8,891,713 (2004: £7,513,513).

In my 2005 Interim Statement I referred to the Board's intention to divest of
non-core activities. During the second half of this year this process began with
the sale of the Group's Publishing Division to its management and with the
closure of the Scottish branch of our Logistics Division. Both these activities,
whilst growing, were trading unprofitably and the time needed to reach breakeven
could not be envisaged within a reasonable timescale.

The results for the year have been dominated by the trading losses of the
closing activities, which have therefore had a detrimental impact on our overall
full year results.

The operating profit on the Group's continuing activities of £101,710 have
therefore been eliminated by the losses on the closing activities of £879,455,
giving an overall operating loss of £777,745.

In the current year, the review of non-core activities will continue. In
particular, we are in the process of reviewing the final exit strategy for our
remaining French logistics operation. Meriden Logistics SARL traded at breakeven
prior to the closure of our Scottish operation, but is now incurring significant
losses during this financial year.

The Group was, until this year, profitable since floatation on AIM in 2001 and
the Board anticipate a return to profitability as soon as the losses on the
French operation have been eradicated.

The Employee Benefits Division which was launched last year has won and
continues to win a large number of prestige clients. However, the gestation
period between winning a contract and the point where income (under UITF 40) can
be recognised has meant that much of the profitability of these contracts cannot
be recognised until completion. This coupled with significant investment in
related support infrastructure has resulted in lower than expected results.

The remaining core divisions of IT Solutions, Marketing & Communications,
Management Consultancy and Outsourcing have delivered acceptable but
unspectacular results. However, the outlook for 2005/2006 is more encouraging
and significant and notable contracts have already been won by a number of these
divisions.

As referred to in our Interim Statement, the Board has recruited further key
executives to strengthen its Head Office function in advance of our planned
expansion and I am therefore pleased to report the appointment to the Board,
from 1 February 2006, of Mr. Craig J. Povey as Chief Operating Officer who has a
wide range of business expertise, most recently working as a consultant within
Orange PCS and Mr. James N. Brinton as Finance Director, which is an internal
promotion.

As I am sure many of our investors are aware our Chief Executive Officer Mr.
Russell Stevens had to take a period of compassionate leave to care for his
terminally ill wife. Unfortunately, Jane Stevens lost her battle with cancer in
October 2005 which necessitated Russell being out of the business for most of
the second half of the calendar year.

I am, however, pleased to report that he has now returned.
Despite the disappointing performance for the full year the Board has
nevertheless decided to recommend the payment of a final dividend for 2004/2005
of 0.006 pence per share.

The Board is delighted to welcome newcomers to the Meriden family and as always
we thank all of our staff for their hard work

Mr Derek Hall
Non-executive Chairman
30 January 2006



Consolidated Profit and Loss Account for the year ended 31 July 2005

                              Note                            Year ended  Year ended
                                                                 31 July     31 July
                                         Closing     Ongoing        2005        2004
                                               £           £           £           £

Turnover                               4,187,423   4,704,290   8,891,713   7,513,513

Cost of sales                        (3,854,104) (3,864,771) (7,718,875) (5,655,567)
                                     ----------- ----------- ----------- -----------
Gross profit                             333,319     839,519   1,172,838   1,857,946

Administrative expenses              (1,212,774)   (737,809) (1,950,583) (1,301,248)
                                     ----------- ----------- ----------- -----------
Operating (loss)/profit                (879,455)     101,710   (777,745)     556,698

Interest receivable                                                  712      14,815

Interest payable                                                (95,972)     (1,816)
                                                             ----------- -----------
(Loss)/profit on ordinary
activities before taxation                                     (873,005)     569,697

Taxation                                                        (12,805)   (189,754)
                                                             ----------- -----------
(Loss)/profit on ordinary                                      (885,810)     379,943
activities after taxation

Dividends paid and proposed                                     (49,700)    (66,700)
                                                             ----------- -----------
Retained (loss)/profit for                                     (935,510)     313,243
the year
                                                             ----------- -----------
Basic and diluted (loss)/       2
earnings per share (pence)                                        (0.29)        0.13
                                                             ----------- -----------



Consolidated Balance Sheet as at 31 July 2005

                                             Note             As at            As at
                                                       31 July 2005     31 July 2004
                                                                  £                £
Fixed Assets
Tangible assets                                           1,344,842          214,447
Fixed asset investments                                     177,853          177,853
                                                        -----------      -----------
                                                          1,522,695          392,300

Current assets
Stocks and work in progress                                 134,220          263,032
Debtors                                                   3,884,527        4,533,946
Cash at bank and in hand                                    400,049          285,152
                                                        -----------      -----------
                                                          4,418,796        5,082,130

Creditors: amounts falling due
within one year                                         (3,406,918)      (3,524,209)
                                                        -----------      -----------

Net current assets                                        1,011,878        1,557,921
                                                        -----------      -----------
Total assets less current liabilities                     2,534,573        1,950,221

Creditors: amounts falling due
after one year                                            (939,062)                -

Provisions for liabilities and charges                      (5,977)          (5,977)
                                                        -----------      -----------
Net assets                                                1,589,534        1,944,244
                                                        -----------      -----------

Capital and reserves

Called up share capital                                     345,000          290,000
Share premium                                             1,049,155          523,355
Profit and loss account                                     195,379        1,130,889
                                                        -----------      -----------
Equity shareholders' funds                      3         1,589,534        1,944,244
                                                        -----------      -----------




Consolidated Cash Flow Statement for the year ended 31 July 2005

                                                 Notes
                                                              Year ended      Year ended
                                                            31 July 2005    31 July 2004
                                                                       £               £

Net cash (outflow) from operating activities       4           (394,329)       (931,841)

Return on investments and servicing of finance
Interest received                                                    712          14,815
Interest payable                                                (95,972)         (1,816)
                                                            ------------    ------------
Net cash (outflow)/inflow from returns on
investments and servicing of finance                            (95,260)          12,999

Tax paid                                                        (74,138)       (200,000)

Capital expenditure and financial investment
Payments to acquire tangible fixed assets                    (1,349,925)        (70,940)
Receipt from disposal of intangible fixed assets                       -              49
Receipts from the sale of tangible fixed assets                        -           9,214
                                                            ------------    ------------
Net cash (outflow) from capital expenditure and
financial investment                                         (1,349,925)        (61,677)

Dividends paid                                                  (66,421)        (66,597)
                                                            ------------    ------------
Net cash (outflow) before financing                          (1,980,073)     (1,247,116)
                                                            ------------    ------------
Financing
Issue of ordinary shares for cash                                580,800               -
New bank loans                                                 1,272,507               -
Increase in invoice discounting loans                            149,079         713,804
Capital element of finance lease rentals                           (964)               -
                                                            ------------    ------------
Net cash inflow from financing                                 2,001,422         713,804
                                                            ------------    ------------

                                                            ------------    ------------
Increase/(decrease) in cash                        5              21,349       (533,312)
                                                            ------------    ------------

Notes to the Preliminary Results for the year ended 31 July 2005

1     Accounting policies

      Basis of accounting
      The financial statements have been prepared in accordance with applicable
      accounting standards and under the historical cost convention. The principal
      accounting policies of the Group have remained unchanged from those set out in
      the Group's 2004 annual report and financial statements.

      Basis of consolidation
      The Consolidated Profit and Loss Account, Balance Sheet and Cash Flow
      Statement consolidates those of the Company and its subsidiary undertakings.
      Intra-group transactions have been eliminated in full.

      Tangible fixed assets and depreciation
      Plant and machinery - 12.5% straight line
      Motor vehicles      - 25 - 33.33% straight line

      Leasing and hire purchase commitments
      Assets obtained under hire purchase contracts and finance leases are
      capitalised as tangible assets and depreciated over the shorter of the lease
      term and their useful lives. Obligations under such agreements are included in
      creditors net of the finance charge allocated to future periods. The finance
      element of the rental payment is charged to the profit and loss account so as
      to produce constant periodic rates of charge on the net obligations
      outstanding in each period.

      Foreign currencies
      Monetary assets and liabilities denominated in foreign currencies are
      translated into sterling at the rates of exchange prevailing at the accounting
      date. Transactions in foreign currencies are recorded at the date of the
      transactions. All differences are taken to the Profit and Loss account.

      On consolidation, assets and liabilities of foreign undertakings are
      translated into sterling at year end exchange rates. The results of foreign
      undertakings are translated into sterling at average rates of exchange for the
      year.

      Exchange differences arising from the retranslation at year end exchange rates
      of the investment in foreign undertakings, less exchange differences on
      foreign currency borrowings which finance these undertakings are taken to
      reserves.

2     Earnings per share

      The calculation of the basic earnings per share is based on the profit on ordinary
      activities after taxation and on the weighted average number of shares in issue during
      the period. The profit and weighted average number of shares used in the calculations
      are set out below:

                                             (Loss)/        Weighted       Basic
                                              profit         average     (loss)/
                                                   £          number    Earnings
                                                           of shares   per share
                                                                         (pence)
      Basic and diluted
      earnings per share:

      Year ended 31 July                   (885,810)     301,000,000      (0.29)
      2005

      Year ended 31 July                     379,943     290,000,000        0.13
      2004
                                     --------------- --------------- -----------


3     Reconciliation of movements in shareholders'
      funds
                                                         Year ended   Year ended
                                                       31 July 2005 31 July 2004
                                                                  £            £

      (Loss)/profit on ordinary activities after          (885,810)      379,943
      taxation
      Dividend                                             (49,700)     (66,700)
      Share subscription                                    605,000            -
      Share subscription costs                             (24,200)            -
                                                       ------------ ------------
      (Loss)/profit on ordinary activities after          (354,710)      313,243
      taxation and dividends

      Opening shareholders' funds                         1,944,244    1,631,001
                                                       ------------ ------------
      Closing shareholders' funds                         1,589,534    1,944,244
                                                       ------------ ------------

4     Reconciliation of operating profit with net cash inflow from operating
      activities

                                                           Year ended    Year ended
                                                         31 July 2005  31 July 2004
                                                                    £             £

      Operating (loss)/profit                               (777,745)       556,698

      Depreciation                                            231,561        98,577
      Decrease/(increase) in stocks and work in               128,812     (226,612)
      progress
      Decrease/(increase) in debtors                          649,419   (1,126,309)
      Decrease in creditors                                 (626,376)     (234,195)
                                                         ------------  ------------
      Net cash (outflow)/inflow from operating              (394,329)     (931,841)
      activities
                                                         ------------  ------------

5     Analysis of changes in net funds

                                     1 August     Cash Flow        Other      31 July
                                         2004       in Year      Changes         2005
                                            £             £            £            £

      Cash at bank and in hand        285,152       114,897            -      400,049
      Bank overdraft                 (12,875)      (93,548)            -    (106,423)
                                               ------------
                                                     21,349

      Bank loans                            -   (1,272,507)            -  (1,272,507)
      Debt due within one year      (713,804)     (149,079)            -    (862,883)
      Finance lease
      and hire purchase                     -           964     (12,031)     (11,067)
      contracts
                                 ------------  ------------ ------------ ------------
                                    (441,527)   (1,399,273)     (12,031)  (1,852,831)
                                 ------------  ------------ ------------ ------------

6     Publication of non-statutory accounts

      The financial information set out in this preliminary announcement does not
      constitute statutory accounts as defined in Section 240 of the Companies Act
      1985. The summarised balance sheet at 31 July 2005 and the summarised profit
      and loss account, summarised cashflow statement and associated notes for the
      year then ended have been extracted from the Company's 2005 statutory
      financial statements upon which the auditors opinion is unqualified and does
      not contain any statement under section 237 of the Companies Act 1985.
      Statutory accounts for the year ended 31 July 2005 will be delivered to the
      Registrar in due course. The comparative financial information is based on the
      statutory accounts for the financial year ended 31 July 2004. Those accounts
      on which the auditors issued an unqualified opinion have been delivered to the
      Registrar of Companies.

7     Availability of Annual Report

      The Annual Report has been posted to shareholders and copies will be
      available from the registered office of the Company or as a download from the
      Company's website at www.meriden-group.co.uk by 4.00pm on 31 January 2006.

8     Dividend

      The Company intends to pay the final dividend of 0.006p per ordinary share on
      12 May 2006 to shareholders on the register at the close of business on 10
      February 2006. The dividend is subject to shareholder approval at the
      forthcoming AGM, which is scheduled to be held at 11.00am on Tuesday 2nd May
      2006 at Meriden House, 6 Great Cornbow, Halesowen, West Midlands, B63 3AB.




                      This information is provided by RNS
            The company news service from the London Stock Exchange
                                                                                                                                                  

a d v e r t i s e m e n t