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Wescol Group PLC (WCL)

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Friday 12 April, 2002

Wescol Group PLC

Interim Results

Wescol Group PLC
12 April 2002


Issued on behalf of Wescol Group plc

Date: Friday, 12 April 2002     Embargoed: 7.35am



                               Wescol Group plc

            Interim Results for the six months ended 31 January 2002


                                                                                           2002                2001
                                                                                  
  • Turnover                                                                      £48.4 million       £32.8 million

  • Operating profit (loss) before exceptional items                                    £80,000       £(1.3)million

  • Earnings per share                                                                   (0.8)p              (5.0)p

  • Strong performance from the main subsidiary Wescol Steel Limited


            (formerly Wescol Glosford PLC) with turnover up 26% and margins improved by 42%

  • Westok Structural Services Limited produce results in line with budget

  • Sale completed of the Group's non-core business Marbank Construction Limited to its management

  • New prestigious contracts continue to be secured and the joint venture with Salzgitter AG offers exciting
    prospects in Europe

  • Group continues to focus on improving the operational efficiencies








'The Group is undergoing radical change to the way it operates and your Board
believes that the Group's range of skills are now better represented to take
advantage of the many opportunities that exist in the marketplace in the UK and
Europe.

The second half of the year looks to be a further challenge for the industry and
Wescol will continue with its strategic development to meet this challenge. This
includes continuing to strengthen the management, improve internal reporting
systems, building the Group's order book, settling remaining outstanding
contracts and closely monitoring our overheads and initiating further
efficiencies.'







                            FULL STATEMENT ATTACHED




Enquiries:
Geoff Adams, Chairman
Mike Newton, Managing Director                            Fiona Tooley
Wescol Group plc                                          Citigate Dewe Rogerson Ltd
Tel: 01422 319500                                         Tel: 0121 455 8370

                                      -2-

                                Wescol Group plc

            Interim Results for the six months ended 31 January 2002

JOINT STATEMENT BY THE CHAIRMAN, GEOFF ADAMS and

MANAGING DIRECTOR, MIKE NEWTON

Following two very difficult years the Group has continued to make progress in
the turnaround of its financial performance with the six months ended 31 January
2002 recording a small operating profit on a substantially increased turnover.

The increase in Group turnover of some 47% principally arises from increased
activity at the recently re-branded subsidiary, Wescol Steel Limited, formerly
Wescol Glosford PLC, where turnover increased by 26% as a result of the near
record level order book existing at the year end and at Marbank Construction
Limited, the Group's 'design & build' subsidiary, where turnover doubled to
circa £17 million. The domestic market for structural steel remains highly
competitive and activity is expected to ease in the second half of the financial
year although enquiries continue to run at a satisfactory level. Westok
Structural Services Limited's turnover was in line with budget and the prospects
are exciting for the joint venture in Continental Europe with our principal
shareholder Salzgitter AG.

In spite of Marbank's increased turnover its margins remained under pressure and
were halved. This clearly impacted on the Group's overall margin which was down
1%. As reported in last year's annual report your Board was looking to dispose
of Marbank as it was not considered core to the overall strategy of the Group.
Your Board is pleased to be able to announce that it completed the sale of
Marbank on 11 April 2002 to the existing management who were part of the
minority interest since its formation, for a cash consideration of £250,000. In
the year ended 31 July 2001, Marbank had audited sales of £17 million, an
operating loss of £466,000 and net assets of £106,000. In the six months ended
31 January 2002 sales were £17 million with an operating loss of £38,000. Net
assets at the same date were £18,000. The attached consolidated profit and loss
account has not been framed in accordance with FRS3 as regards to the
discontinuance provisions as the sale has coincided with this announcement.

Wescol Steel's gross profit margin has increased by 42% despite further
write-downs in excess of £200,000 on old contracts having been made. Westok's
gross profit margin percentage was in line with budget.

Your Board has continued to develop the management team and the systems
surrounding the contracts monitoring procedures and efficiencies in order to
eliminate the problems encountered with the older contracts. This has produced a
marked improvement and resulted in increased contract margins and an improved
cash flow from newer contracts. There are, however, a number of older contracts
which have still to be resolved which your Board believes have been properly
provided for in the accounts but which, coupled with the increase of turnover,
continue to put strain on the Group's financial resources. This is not uncommon
in a situation of recovery in construction related businesses.

In spite of this we continue to win prestigious and interesting contracts in
extremely competitive situations which demonstrates the Group's range of core
skills.

No dividend is proposed.

Our thanks are again due to the Group's Bankers and to our major shareholder,
Salzgitter AG for their continued support.

Prospects

The Group is undergoing radical change to the way it operates and your Board
believes that the Group's range of skills are now better represented to take
advantage of the many opportunities that exist in the marketplace in the UK and
Europe.

The second half of the year looks to be a further challenge for the industry and
Wescol will continue with its strategic development to meet this challenge. This
includes continuing to strengthen the management, improve internal reporting
systems, building the Group's order book, settling remaining outstanding
contracts and closely monitoring our overheads and initiating further
efficiencies.

                                      -3-



                                Wescol Group plc

            Interim Results for the six months ended 31 January 2002



CONSOLIDATED PROFIT AND LOSS ACCOUNT

31 January 2002
                                                                         6 months to        6 months to     12 months to
                                                                     31 January 2002    31 January 2001     31 July 2001
                                                          Note             Unaudited          Unaudited          Audited

                                                                               £'000              £'000            £'000

Group turnover                                                                48,442            32,844            71,488
Cost of sales
Before exceptional items                                                    (43,479)           (28,963)         (64,533)
Exceptional items                                           1                      -              (210)            (210)
Cost of sales                                                               (43,479)           (29,173)         (64,743)
Gross profit                                                                   4,963              3,671            6,745
Operating expenses
                                                                            

Before exceptional items                                                     (4,883)            (5,136)         (10,625)
Exceptional items                                           1                      -              (844)          (1,057)
Operating expenses                                                           (4,883)            (5,980)         (11,682)
Group operating profit/(loss)
                                                                               

Before exceptional items                                                          80            (1,255)          (3,670)
Exceptional items                                                                  -            (1,054)          (1,267)
Group operating profit/(loss)                                                     80            (2,309)          (4,937)
Net interest                                                                   (507)              (458)            (912)
Loss on ordinary activities before taxation                                    (427)            (2,767)          (5,849)
Tax on loss on ordinary activities                          2                      -                  -            (150)
Loss on ordinary activities after taxation                                     (427)            (2,767)          (5,999)
Minority interests - equity                                                     (10)               (25)              116
Loss attributable to shareholders                                              (437)            (2,792)          (5,883)
Dividends - on equity shares                                                       -                  -                -
Retained loss for the period                                                   (437)            (2,792)          (5,883)
Earnings per share (pence)                                  3                  (0.8)              (5.0)           (10.6)

Basic and diluted
Dividends per share                                                                -                  -                -







                                      -4-



                                Wescol Group plc

            Interim Results for the six months ended 31 January 2002



STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
                                                                       6 months to          6 months to     12 months to
                                                                   31 January 2002      31 January 2001     31 July 2001
                                                                         Unaudited            Unaudited          Audited
                                                                             £'000                £'000            £'000

Loss for the financial period                                                (437)              (2,792)          (5,883)
Group currency translation gain                                                  -                    -                1
Total recognised losses relating to the period                               (437)              (2,792)          (5,882)



RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
                                                                       6 months to          6 months to     12 months to
                                                                   31 January 2002      31 January 2001     31 July 2001
                                                                         Unaudited            Unaudited          Audited
                                                                             £'000                £'000            £'000

Total recognised losses relating to the period                               (437)              (2,792)          (5,882)
Dividends                                                                        -                    -                -
Decrease in shareholders' funds                                              (437)              (2,792)          (5,882)
Opening shareholders' funds                                                  5,534               11,416           11,416
Closing shareholders' funds                                                  5,097                8,624            5,534

                                      -5-



                                Wescol Group plc

            Interim Results for the six months ended 31 January 2002



SUMMARISED CONSOLIDATED BALANCE SHEET

31 January 2002
                                                                                At                  At                At
                                                                   31 January 2002     31 January 2001      31 July 2001
                                                                         Unaudited           Unaudited           Audited
                                                                             £'000               £'000             £'000
Fixed assets

Intangible assets - Goodwill                                                        -                  33              -
Tangible assets                                                                12,918              14,857         13,236
                                                                               12,918              14,890         13,236
Current assets

Stocks                                                                            290                 244            244
Debtors due within one year                                                    27,350              22,670         25,715
Cash at bank and in hand                                                        3,199                   5          2,514
                                                                               30,839              22,919         28,473

Creditors : Amounts falling due within one year                              (38,472)            (27,657)       (35,757)
Net current liabilities                                                       (7,633)             (4,738)        (7,284)
Total assets less current liabilities                                           5,285              10,152          5,952

Creditors : Amounts falling due after more than one year                        (102)             (1,273)          (328)

Provisions for liabilities and charges                                           (28)                (28)           (28)
Net assets                                                                      5,155               8,851          5,596
Capital and reserves                                                            5,097               8,624          5,534

Equity minority interests                                                          58                 227             62
                                                                                5,155               8,851          5,596

                                      -6-



                                Wescol Group plc

            Interim Results for the six months ended 31 January 2002



SUMMARISED CONSOLIDATED CASH FLOW STATEMENT
                                                                6 months to             6 months to            12 months
                                                            31 January 2002         31 January 2001      to 31 July 2001
                                                                  Unaudited               Unaudited              Audited
                                                                      £'000                   £'000                £'000


Net cash (outflow)/inflow from operating activities                      (481)                 (1,244)               353
Returns on investment and servicing of finance                           (521)                   (458)             (936)
Taxation paid                                                                -                       -               233
Capital expenditure and financial investment                              (70)                   (225)             1,195
Equity dividends paid                                                        -                       -                 -
Financing                                                                (274)                 (1,266)           (1,690)
Decrease in cash                                                       (1,346)                 (3,193)             (845)



RECONCILIATION OF OPERATING PROFIT/(LOSS) TO NET CASH FLOW FROM OPERATING
ACTIVITIES
                                                             6 months to           6 months to              12 months to
                                                         31 January 2002       31 January 2001              31 July 2001
                                                               Unaudited             Unaudited                   Audited
                                                                   £'000                 £'000                     £'000

Operating profit/(loss)                                                  80              (2,309)                 (4,937)
Amortisation of goodwill                                                  -                    1                      34
Depreciation of tangible fixed assets                                   388                  647                   1,327
Impairment of tangible fixed assets                                       -                  250                       -
Currency translation gain                                                 -                    -                       1
Loss on disposal of tangible fixed assets                                 -                    -                     257
Working capital movements
- Stock                                                                (46)                    -                       -
- Debtors                                                           (1,635)                4,058                     630
- Creditors                                                             732              (3,891)                   3,041
Net cash (outflow)/inflow from operating                              (481)              (1,244)                     353
activities

                                      -7-



                                Wescol Group plc

            Interim Results for the six months ended 31 January 2002

NOTES

1.     OPERATING EXCEPTIONAL ITEMS


        The operating exceptional items incurred during the year ended 31 July
        2001 comprise costs associated with the Recovery Strategy, and in
        particular the closure of the Worcester site and the associated
        redundancy costs. All costs connected to the further clarification and
        resolution of certain contract matters from prior periods are recorded
        within pre-exceptional items.

2.     TAXATION

                                                              6 months to             6 months to          12 months to
                                                          31 January 2002         31 January 2001          31 July 2001
                                                                Unaudited               Unaudited               Audited
                                                                    £'000                   £'000                 £'000

UK Corporation tax                                                         -                       -              (150)
Deferred tax                                                               -                       -                  -
Group tax                                                                  -                       -              (150)



The Group has tax losses carried forward of approximately £9.4 million at 31
January 2002.

3.     EARNINGS PER SHARE

     These have been calculated on earnings of:

                                                               6 months to              6 months to         12 months to
                                                           31 January 2002          31 January 2001         31 July 2001
                                                                 Unaudited                Unaudited              Audited

In £'000's                                                              (437)                  (2,792)           (5,883)
The weighted average number of shares in issues
was:
Basic and diluted                                                       55.5m                    55.5m             55.5m


Diluted earnings per share are calculated after allowing for the
dilutive effect of conversion into ordinary shares of the weighted
average number of share options outstanding during the period. The
options were not dilutive at 31 January 2001, 31 July 2001 or 31 January 2002.

4.     RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT

                                                                6 months to             6 months to         12 months to
                                                            31 January 2002         31 January 2001         31 July 2001
                                                                  Unaudited               Unaudited              Audited
                                                                      £'000                   £'000                £'000

Change in cash                                                         (1,346)                 (3,193)             (845)
Cash outflow from debt and lease finance                                   274                   1,266             1,690
Change in net debt from cash flows                                     (1,072)                 (1,927)               845
Inception of finance leases                                                  -                   (140)             (625)
Change in net debt                                                     (1,072)                 (2,067)               220
Opening net debt                                                       (9,328)                 (9,548)           (9,548)
Closing net debt                                                      (10,400)                (11,615)           (9,328)




continued...

                                      -8-



5.     ANALYSIS OF NET DEBT

                                                              1 August 2001        Cash flow             31 January 2002
                                                                      £'000            £'000                       £'000

Cash at bank and in hand                                                 2,514              685                    3,199
Bank overdraft                                                         (9,464)          (2,031)                 (11,495)
Cash                                                                   (6,950)          (1,346)                  (8,296)
Bank loans                                                             (1,585)                -                  (1,585)
Finance leases                                                           (793)              274                    (519)
Borrowings                                                             (2,378)              274                  (2,104)
Net debt                                                               (9,328)          (1,072)                 (10,400)


6.     INTERIM REPORT

        This interim report was approved by the Board on 12 April 2002. FRS19 '
        Deferred Tax' has been adopted for the first time in this interim
        statement. No restatement of figures previously accounted for under
        SSAP15 are required, as the losses of the Group are treated as
        unrecognised deferred tax assets under both accounting standards.

        All other accounting policies used are consistent with those adopted in
        the statutory accounts for the year ended 31 July 2001.

        The figures for the year to 31 July 2001 were derived from the statutory
        accounts for that year. The statutory accounts for the year ended 31
        July 2001 have been delivered to the Registrar of Companies and received
        an audit report which was unqualified and did not contain statements
        under s237(2) or (3) of the Companies Act 1985.


                                      -9-


               INDEPENDENT REVIEW REPORT TO WESCOL GROUP PLC


Introduction

We have been instructed by the company to review the financial information set
out on pages 3 to 8. We have read the other information contained in the interim
report and considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.

Directors' responsibilities

The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.

Review work performed

We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied, unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with United Kingdom Auditing Standards and therefore
provides a lower level of assurance than an audit. Accordingly we do not express
an audit opinion on the financial information.

Review conclusion

On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 January 2002.

RSM Robson Rhodes
Chartered Accountants
Birmingham, England

12 April 2002


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

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