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Torday & Carlisle (EWD)

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Thursday 22 September, 2005

Torday & Carlisle

Interim Results

Torday & Carlisle PLC
22 September 2005

                      Torday & Carlisle PLC (the 'Company')
                                        
                                Interim Results

Chairman's Statement

I am pleased to report a good half year with improved profitability and the
continued development of our two core businesses.

Results
Operating profit from continuing operations before goodwill amortisation was
£1,180,000 which shows a 62% increase over the figure of £728,000 achieved
during the first half of 2004. Earnings per share more than doubled to 7.0 pence
(2004: 2.7 pence). We are continuing to return funds to shareholders through
share buy backs as reported below. As in previous years we are not recommending
an interim dividend but, subject to continued satisfactory trading in the second
half, we expect to be able to recommend a further increase in the final dividend
(2004: 2 pence per share).

The usual detailed proforma analysis of results showing the contribution from
each of our businesses is included below.

E Wood - specialist surface coatings
We again congratulate Chris McDonnell and his team as E Wood continued its
strong growth. First half turnover was £12.0 million (2004: £10.9 million) and
for the second consecutive year the business achieved record operating profits
for the period of £1,510,000 (2004: £1,339,000).

In the 2004 Annual Report, we reported that the UK Drinking Water Inspectorate
had approved our structural grade Hycote 169HB polymeric lining for the inside
of water pipes. This approval has resulted in strong demand from the UK water
industry with a number of water companies now adopting this technology where
semi-structural linings can be used instead of pipeline replacement. We are
seeking to diversify the uses for this product technology into other sectors.

Our pipelining division also enjoyed strong demand particularly from the oil and
gas industry for flow coating products applied internally to pipelines. We also
saw significant sales for high performance protective coatings applied to water
pipelines in Africa, India and the Middle East.

Our Thortex Export business has resumed its sales growth but the Thortex UK
business has encountered difficult market conditions. We have appointed Bob
Healy, who has a long association with E Wood and considerable experience in
this sector, to head up the overall Thortex business. Measures are now being
taken in the Thortex UK business to reduce costs and improve sales and
profitability.

Work is well underway on the project to construct a new manufacturing plant on
the Northallerton site dedicated to the Hycote 169 product range, and we expect
this to be commissioned by the end of the year. We have leased additional space
immediately adjacent to our existing premises to enable us to handle the
increasing demand for our products.

We are optimistic about the second half prospects for E Wood.

Solvitol - formulated chemicals for household, industry and automotive aftercare
Turnover for the period was £4.1 million (2004: £5.2 million) with an operating
loss before goodwill amortisation of £162,000 (2004: loss £329,000). The
operating loss, after goodwill amortisation, was £190,000 (2004: loss £414,000).
The reduction in turnover is a consequence of the decision to eliminate loss
making private label business and replace it by higher margin, lower volume
branded sales.

In difficult market conditions, we continued to implement our strategy of
focusing primarily on the sale of branded products together with reductions in
costs, and improvements in manufacturing efficiencies. In February 2005,
following the re-location of the Intro business to Birtley, we sold the Intro
site in Doncaster for a net profit before taxation of £136,000. During the first
half we have incurred £34,000 of further planned rationalisation costs. We have
installed new can labelling equipment at Birtley which will give us both cost
savings and better efficiency and, by the end of this year we expect to vacate a
rented warehouse with significant future annual savings. We are also targeting
significant reductions in working capital.

We will continue to seek to drive down costs and work to grow sales of branded
products to make the business profitable.

Corporate/central matters
We continue to seek reductions wherever possible in Head Office costs which in
the first half were £168,000 (2004: £282,000 which included £100,000 to buy out
share options and restructuring costs).

During the first half, we purchased for cancellation a further 668,178 ordinary
shares. The current issued share capital is 12,274,303 ordinary shares with
approximately 1,350 shareholders. At the Annual General Meeting in April 2005,
shareholders authorised the purchase for cancellation of up to 1,949,071 shares.
The balance of this authority currently is 1,280,893 shares. We will continue to
make share buy backs where we believe it is in the best interests of
shareholders.

Cash Flow, Dividends and Tax
The Analysis of Performance shows an increase in net borrowings of £864,000.
During the period the group generated an inflow of £208,000 from operations
(2004: outflow of £587,000). The company returned £1,072,000 to shareholders
comprising £812,000 by continuing its policy of buying its own shares for
cancellation, and £260,000 by paying a dividend of 2 pence per share.

Following the implementation of accounting standard FRS 21, dividends declared
after the year end no longer meet the definition of a liability at the year end
and are only recognised in the period they are declared and appropriately
approved. Accordingly, these accounts include as a charge, the dividend of 2
pence per ordinary share paid in May 2005 and the interim and final accounts for
2004 have been amended to reflect this change.

The group is estimating an effective 16.0% (2004: 5.0%) corporation tax charge
for the 2005 year which, after adjustment for movements in deferred tax,
increases to 23.6% giving a total charge of £278,000 (2004: credit £136,000) for
the half year.

Outlook
The UK manufacturing sector continues to face the usual challenges of strong
overseas competition and volatile demand. Despite this, we believe that at E
Wood we have the right products for the right markets and we are optimistic
about the prospects for the business. E Wood is now a sizable company and we
believe it is this business which will predominantly generate the future
profitability and value for the group. By contrast, the value of Solvitol will
be seen when the business is able to achieve profitability. Although this goal
has so far eluded us, we are making progress towards it and will continue our
efforts with the appropriate actions to achieve it.

James Leek
Chairman

22 September 2005


Analysis of Performance
For the six months ended 30 June 2005

The following proforma analysis of the Group's trading results is provided to
help shareholders understand the components of the Group operating profit during
the period and the comparison with 2004.

Note : This proforma information is unaudited and provided for illustrative
purposes only.

                                              2005    2004    2004        2004
                                                H1      H1      H2   Full Year
                                              £000    £000    £000        £000
Continuing operations
E Wood                                       1,510   1,339   1,227       2,566
Solvitol                                      (162)   (329)   (224)       (553)
                                            ------- ------- -------     -------
Sub Total                                    1,348   1,010   1,003       2,013

Head Office costs                             (168)   (282)   (167)       (449)
                                            ------- ------- -------     -------
Total continuing operations proforma
  operating profit                             
  (before goodwill amortisation)             1,180     728     836       1,564
Amortisation of goodwill
Nilco (Solvitol business)                      (28)    (85)    (28)       (113)
Meristem (Head Office)                          36      36      36          72
                                            ------- ------- -------     -------
Total operating profit on continuing
operations                                   1,188     679     844       1,523
                                            ------- ------- -------     -------
Discontinued operations:                         
Share of operating (loss)/profit -               
  LD Group(associate)                            -    (198)     19        (179)              
                                            ------- ------- -------     -------
Total operating profit                       1,188     481     863       1,344
Profit on disposal of operations -
  LD Group (associate)                           -       -      43          43
Profit on sale of fixed assets - Doncaster
site disposal                                  136       -       -           -
                                            ------- ------- -------     -------

Profit on ordinary activities before
interest and taxation                        1,324     481     906       1,387
                                            ------- ------- -------     -------


Summary of movement in group net debt
                                                                          £000
                                          
Net borrowing at 1 January 2005                                         (4,570)  
Ordinary shares bought back                                               (812)
Dividends paid                                                            (260)
Cash inflow from operations                                                208
                                                                        -------
Net borrowing at 30 June 2005                                           (5,434)
                                                                        -------

Consolidated Profit and Loss Account
For the six months ended 30 June 2005

                              Notes   Unaudited       Unaudited         Audited
                                    6 months to     6 months to    12 months to
                                        30 June         30 June     31 December
                                           2005            2004            2004
                                                   (As restated)   (As restated)
                                           £000            £000            £000

Turnover
Group turnover including share
  of associates                          16,087          17,174          31,703
Less : Share of associates'
  turnover - discontinued operations          -          (1,077)         (1,489)
                                       --------        --------        --------

Group turnover - continuing
  operations                            16,087          16,097          30,214
Cost of sales - continuing
  operations                           (10,517)        (10,707)        (19,422)
                                       --------        --------        --------
Gross profit - continuing
  operations                             5,570           5,390          10,792
Distribution costs -
  continuing operations                 (1,840)         (1,944)         (3,901)
Administrative expenses -
  continuing operations                 (2,571)         (2,808)         (5,453)
Other operating income -
  continuing operations                     29              12              85
                                       --------        --------        --------
Group operating profit -
  continuing operations                  1,188             650           1,523
Share of operating loss in
  associate - discontinued                   -            (169)           (179)
  operations                           --------        --------        --------

Total operating profit: group
  and share of associates                1,188             481           1,344
                                       
Profit on disposal of
  discontinued operations                    -               -              43
Profit on sale of fixed assets -
  continuing operations                    136               -               -
                                       --------        --------        --------

Profit on ordinary activities
  before interest and taxation           1,324             481           1,387
Interest payable and similar
  charges (net) 
  - continuing operations                 (147)           (148)           (284)
  - discontinued operations                  -             (19)            (25)
                                       --------        --------        --------
                                          
Profit on ordinary activities
  before taxation                        1,177             314           1,078
Taxation on profit on ordinary
  activities                     4        (278)            136             450
                                       --------        --------        --------
Profit on ordinary activities
  after taxation                           899             450           1,528
Minority interest                           10             (24)            (36)
                                       --------        --------        --------
Profit for the period                      909             426           1,492
Dividends                        5        (237)           (138)           (138)
                                       --------        --------        --------
Retained profit for the period             672             288           1,354
                                       --------        --------        --------

Earnings per share               6         7.0p            2.7p            9.9p
Diluted earnings per share       6         6.9p            2.7p            9.9p


Consolidated Balance Sheet
As at 30 June 2005

                                         Unaudited   Unaudited         Audited
                                             as at       as at           as at
                                           30 June     30 June     31 December
                                              2005        2004            2004
                                                                  (As restated)
                                              £000        £000            £000
Fixed assets
Intangible assets
Positive goodwill                            1,634       1,775           1,704
Negative goodwill                           (1,542)     (1,698)         (1,620)
                                           --------    --------       ---------

                                                92          77              84
Tangible assets                              4,825       5,072           4,989
Investments                                     47          47              47
                                           --------    --------       ---------

                                             4,964       5,196           5,120
                                           --------    --------       ---------
Current assets
Stocks                                       3,907       3,960           3,772
Debtors                                      9,042       8,613           6,863
Investments                                      -          20               -
Cash at bank and in hand                        20           -              86
                                           --------    --------       ---------

                                            12,969      12,593          10,721
Creditors: Amounts falling due
  within one year                          (11,064)    (11,725)         (8,608)
                                           --------    --------       ---------

Net current assets                           1,905         868           2,113
                                           --------    --------       ---------

Total assets less current
  liabilities                                6,869       6,064           7,233
Creditors: Amounts falling due
  after more than one year                  (1,817)       (180)         (2,000)
                                           --------    --------       ---------

Net assets                                   5,052       5,884           5,233
                                           --------    --------       ---------

Represented by:
Capital and reserves
Called up equity share capital                 616         745             650
Share premium account                           72          72              72
Other reserves                                 559       4,029             559
Capital redemption reserve                   1,649       1,520           1,615
Profit and loss account                      2,132        (538)          2,272
                                           --------    --------       ---------

Equity shareholders' funds                   5,028       5,828           5,168
Minority interest                               24          56              65
                                           --------    --------       ---------

                                             5,052       5,884           5,233
                                           --------    --------       ---------


Consolidated Statement of Total Recognised Gains and Losses
For the 6 months ended 30 June 2005

                                      Unaudited       Unaudited        Audited
                                    6 months to     6 months to   12 months to
                                        30 June         30 June    31 December
                                           2005            2004           2004
                                           £000            £000           £000

Profit for the period                       909             426          1,492

Exchange differences on the
  restatement of investments in
  subsidiary undertakings                     -             (16)           (22)
                                       ---------       ---------       --------
Total recognised gains and losses
  relating to the period                    909             410          1,470
                                       ---------       ---------       --------


Reconciliation of Movements in Shareholders' Funds
For the 6 months ended 30 June 2005

                                    6 months to     6 months to   12 months to
                                        30 June         30 June    31 December
                                           2005            2004           2004
                                   (As restated)   (As restated)  (As restated)
                                           £000            £000           £000
 
Profit for the period                       909             426          1,492
Dividends                                  (237)           (138)          (138)
                                       --------       ---------        --------
                                            672             288          1,354
Currency translation differences              -             (16)           (22)
Issue of new share capital                    -              81             81
Purchase of own share capital              (812)         (1,719)        (3,439)
                                       --------       ---------        --------
Net decrease in shareholders'              (140)         (1,366)        (2,026)
  funds

Opening shareholders' funds as
  previously stated                       4,931           7,056          7,056
Prior year adjustment (see note 2)          237             138            138
                                       --------       ---------        --------
Opening shareholders' funds as
  restated                               5,168           7,194           7,194
                                       --------       ---------        --------
Closing shareholders' funds              5,028           5,828           5,168
                                       --------       ---------        --------


Consolidated Cash Flow Statement
For the six months ended 30 June 2005

                                 Unaudited        Unaudited            Audited
                               6 months to      6 months to       12 months to
                              30 June 2005     30 June 2004   31 December 2004
                            £000      £000    £000     £000     £000      £000


Net cash inflow/(outflow)
  from operating activities           352              (206)             2,063

Dividends received from
  trade investments/
  associates                            -                 -                 12


Returns on investments and
  servicing of finance
Interest received              -                 3                 6
Interest paid               (135)             (127)             (279)
Interest element of finance
  lease rental payments       (6)              (10)              (13)
Distributions to minority
  interests                  (31)             (132)             (135)
                            ------            ------           -------
Net cash outflow from
  returns on investments                    
  and servicing of finance           (172)             (266)              (421)

Capital expenditure and
  financial investment
Purchase of tangible fixed
  assets                    (256)             (233)             (499)
Sale of tangible fixed        
  assets                      84                11                33
Sale of current asset
  investment                   -                 -                20
                            ------            ------           -------
Net cash inflow/(outflow)
  from capital expenditure
  and financial investment             28              (222)              (446)

Disposals
Consideration in respect of
  disposals in earlier years            -               107                107

Equity dividends paid                (260)             (147)              (146)
                                   -------           -------            -------

Net cash (outflow)/inflow
before financing                      (52)             (734)             1,169

Financing
Issue of new share capital     -                81                81
Purchase of own share       
  capital                   (812)           (1,719)           (3,439)
Repayment of loan notes        -              (388)             (388)
New term loan                  -                 -             2,000
Repayment of term loan      (182)                -              (151)
New finance leases             -                90                90
Capital element of finance
  lease rental payments      (29)              (48)              (91)
                           ------            ------           -------
Net cash outflow from
  financing                        (1,023)           (1,984)            (1,898)
                                   -------           -------            -------

Decrease in cash                   (1,075)           (2,718)              (729)
                                   -------           -------            -------
Reconciliation of net debt
Decrease in cash in the period     (1,075)           (2,718)              (729)
Net decrease/(increase) in
  debt and lease financing            211               346             (1,460)
                                   -------           -------            -------

Movement in net debt in the
  period                             (864)           (2,372)            (2,189)
Net debt at beginning of
  period                           (4,570)           (2,381)            (2,381)
                                   -------           -------            -------

Net debt at end of period          (5,434)           (4,753)            (4,570)
                                   -------           -------            -------

Notes to the Interim Report
For the six months ended 30 June 2005

1. Basis of accounting
The unaudited financial information for the six months to 30 June 2005 has been
prepared on the basis of the accounting policies set out on pages 20 and 21 of
the annual accounts for the year ended 31 December 2004. The financial
information for the year ended 31 December 2004 is derived from full accounts
for that year which received an unqualified audit report and have been filed
with the Registrar of Companies.

A copy of the interim results, which has been neither audited nor reviewed by
the Company's independent auditors, is available at the Company's registered
office and will be distributed to all shareholders.

2. Prior year adjustment
The Accounts for 2004 have been restated for the requirement of FRS 21, 'Events
after the Balance Sheet Date' and FRS 22, 'Earnings per Share'. The effect of
compliance with the relevant elements of FRS 21 is set out in Note 5 'Dividends'
below. In accordance with FRS 22, the adjusted earnings per share has been
removed from the face of the Profit and Loss Account and further details on the
split of earnings per share between continued and discontinued operations are
shown in Note 6 below.

Compliance with FRS 21 and FRS 22 has not changed the shareholders' funds at 30
June 2004 (31 December 2004: increased by £237,000) and retained profit for the
six months to 30 June 2004 decreased by £138,000 (12 months to 31 December 2004:
increased by £99,000).

3. Segmental analysis
A proforma analysis of performance is set out after the Chairman's Statement
above.

4. Taxation
The corporation tax charge in the accounts has been calculated by applying the
effective estimated tax rate of 16.0% (2004: 5.0%) to the profit on ordinary
activities before taxation for the current period and takes into account the
effect of tax relief arising from the part utilisation of brought forward tax
losses. This results in a corporation tax charge of £189,000 (2004: £24,000 in
the half year). In addition, the group has utilised previously recognised
deferred tax assets of £159,000 and recognised further deferred tax assets of
£70,000 in respect of previous losses that are now considered to be recoverable.

The total charge for tax reported in the profit and loss account is £278,000
(2004: credit of £136,000).

5. Dividends
Under FRS 21 dividends declared after the year end no longer meet the definition
of a liability at the year end and are only recognised in the period that they
are declared and appropriately approved. The group has therefore restated the
dividend charges in previous years and included in H1 2005 the charge previously
shown in the annual accounts for 2004 for the 2 pence final dividend paid in May
2005.

As in 2004, the directors do not recommend the payment of an interim dividend.

6. Earnings per share
Basic earnings per share are calculated on the profit on ordinary activities
after taxation of £909,000 (2004: £426,000) and on 12,916,439 ordinary shares,
being the weighted average number of ordinary shares in issue in the period
(2004: 15,716,814 ordinary shares).

Diluted earnings per share are calculated on the profit on ordinary activities
after taxation of £909,000 (2004: £426,000) and on 13,097,899 ordinary shares,
being the weighted average number of ordinary shares in issue in the period
adjusted for the dilutive effect of the share options outstanding (2004:
15,716,814 ordinary shares).

The split of earnings per share is as follows at 30 June 2004:

                         on continuing            on discontinued        Total
                            operations                 operations

Basic earnings per share          3.9p                      (1.2p)         2.7p
Diluted earnings per share        3.9p                      (1.2p)         2.7p

The split of earnings per share is as follows at 31 December 2004:

                         on continuing            on discontinued        Total
                            operations                 operations

Basic earnings per share          11.0p                      (1.1p)        9.9p
Diluted earnings per share        11.0p                      (1.1p)        9.9p

There are no discontinued operations in 2005.

7. Contingent liability
The group has previously reported a bank guarantee given by Torday & Carlisle
PLC for the liabilities of The LD Group PLC ('LD') up to £133,333. In September
2005, the bank concerned informed the Company that sums owing to it by LD had
been fully repaid and therefore the bank would no longer rely on the guarantee.

Enquiries:

James Leek
Executive Chairman                                                 07966 528295



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