28th Feb 2008 15:09
Hydro International PLC28 February 2008 HYDRO INTERNATIONAL plc PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2007 - CORRECTION This announcement replaces the Final Results announcement released on the RNSsystem under RNS no 90920 on Thursday 28th February at 7.00am. An amendment hasbeen made in respect of the dividend payment date, which was incorrectly statedas 1 June 2008. The correct date is 2 June 2008. In all other respects theannouncement remains unchanged. The full amended announcement text appearsbelow. Hydro International plc ('Hydro' or 'the Group'), the provider of innovativeproducts for the control and treatment of water, is pleased to announce itspreliminary results for the year ended 31 December 2007. KEY INDICATORS+---------------------------+-----------------+----------------+| | Year ended| Year ended|| | 31 December 2007|31 December 2006|| | | || | | |+---------------------------+-----------------+----------------+|Statutory: | | |+---------------------------+-----------------+----------------+|Revenue | £26.0m| £22.4m|+---------------------------+-----------------+----------------+|Operating profit | £2,374k| £1,800k|+---------------------------+-----------------+----------------+|Profit before tax | £2,548k| £1,834k|+---------------------------+-----------------+----------------+|Cash and cash equivalents | £4.8m| £2.7m|+---------------------------+-----------------+----------------+|Earnings per share | 12.47p| 9.70p|+---------------------------+-----------------+----------------+|Non-Statutory: | | |+---------------------------+-----------------+----------------+|Adjusted operating profit* | £2,274k| £1,800k|+---------------------------+-----------------+----------------+|Adjusted earnings per share| 11.97p| 9.70p||* | | |+---------------------------+-----------------+----------------+|Closing order book | £7.0m| £4.6m|+---------------------------+-----------------+----------------+ *excluding exceptional other operating income and related corporation taxeffect. The Company's preferred performance indicator would also excludeamortisation of acquisition related intangible assets. Under IFRS no suchamortisation has been charged in either the current or prior year. For further information, please contact:Hydro International plc Tel: +44 (0) 1275 878371 Roger Lockwood, ChairmanSteve Hides, Chief Executive OfficerTony Hollox, Group Finance Director KBC Peel Hunt Tel: +44 (0) 20 7418 8900Nominated Broker and AdviserJulian Blunt 28 February 2008 CHAIRMAN'S STATEMENT Financial highlights We have had an excellent year in 2007 with record financial results generatedfrom organic growth from core products in both stormwater and wastewaterbusinesses. The key highlights of this financial performance were: • Revenues increased by 16% to £25,958k (2006: £22,396k) • Operating profit increased by 32% to £2,374k (2006: £1,800k) • Adjusted operating profit* increased by 26% to £2,274k (2006: £1,800k) • Cash balances increased by £2,171k to £4,848k • Closing order book up 52% to £7,020k * excluding exceptional other operating income The Board is proposing a final dividend of 2.8 pence per share, an increase of22% over the previous year's final dividend of 2.3 pence per share which,subject to approval at the Annual General Meeting on 22 May 2008, will be paidon 2 June 2008 to shareholders on the register on 2 May 2008. Stormwater review Stormwater revenues grew by 14% to £13,883k (2006: £12,216k) reflecting steadygrowth in demand in the core UK and US markets. Ireland, which had a particularly strong year in 2006, had a difficult period in2007 with a downturn in construction activity in the second half of the yearleading to reduced sales volumes in the period. Following a solid year in the UKand US stormwater businesses the prospect of a similar slowdown, as a result ofthe recent downturn in the economy, exists although the size and nature of themarkets is different from that in Ireland. In the US there is scope forconsiderable growth through increasing market share in the stormwater treatmentsectors and developing new markets for our existing technologies. In the UK,where Hydro occupies a market leading position, the government is promoting alarge scale house-building programme over the next 10 years, whichnotwithstanding the current difficulties in credit markets should help counterthe effects of any generalised slowdown in the economy. There are also theopportunities presented by the introduction of the Water Framework Directiveinto the UK over the medium term where Hydro is well positioned to offer proventechnologies to assist with the problems associated with stormwater quality. The stormwater market is increasingly competitive, but Hydro remains confidentof its market leading position and future prospects supported by our commitmentto innovation in the development of new and improved products. Wastewater review In 2006 the wastewater business was facing the challenges of rising stainlesssteel pricing and delays in projects coming forward under the 4th AssetManagement Programme (AMP4). 2007 has seen both of these issues starting to beaddressed with revenues increased as a consequence by 19% to £12,075k (2006:£10,180k). In the US municipal budgets have been adjusted to allow projects to accommodatethe increased cost of stainless steel and there has been a steady flow ofprojects over the year culminating in the Group's largest ever grit removalproject (£0.9m) for the City of Clearwater, Florida which was awarded inDecember. In the UK order intake was 70% up on 2006 including the award of a £2.3 millioncontract with Thames Water for innovative sludge scraper technology. Progress in the UK and US markets was supplemented with a prestigious combinedsewer overflow project in Belgium and a licensing arrangement in Egypt for gritremoval products. People In December the Group announced the appointment of Chris Williams as ChiefOperating Officer, widening the scope of his previous role of EU ManagingDirector to cover day-to-day control of all the Group's operating businessunits, including the United States. We wish Chris every success in his new role.This appointment will enable Steve Hides, Chief Executive Officer, to focus onthe strategic growth of the business and, in particular, the Group's plans forfurther international expansion and for growth through acquisition. I would also like to welcome Michael Stevens to the Board as a non-executivedirector. Michael will take up his new role on 3 March 2008. As well asstrengthening the corporate governance of the business, he adds valuableexperience in the development of international markets. More generally I would also like to thank everyone who has helped contribute toour success during 2007. Outlook Our finances are strong and we are well positioned to supplement the strongorganic growth of recent years with carefully positioned acquisitions that fitour business strategy. As with all businesses the recent turmoil in the worldeconomy presents the Group with a degree of uncertainty and additional potentialchallenges. However, the fundamentals of the business are very strong, the Hydrobusiness model is serving us well and delivering profitable growth and we lookforward to achieving further progress in the coming year. Roger Lockwood Chairman Hydro International plcPreliminary ResultsGroup Income Statement (Unaudited)Year ended 31 December 2007 +------------------------------------------+--------------+-----------+| | 2007| 2006|| | | ||Continuing operations | £000| £000|+------------------------------------------+--------------+-----------+| | | |+------------------------------------------+--------------+-----------+|Revenue | 25,958| 22,396|+------------------------------------------+--------------+-----------+|Cost of sales | (16,273)| (14,427)|+------------------------------------------+--------------+-----------+|Gross profit | 9,685| 7,969|+------------------------------------------+--------------+-----------+|Administrative expenses | (7,411)| (6,169)|+------------------------------------------+--------------+-----------+|Exceptional other operating income | 100| -|+------------------------------------------+--------------+-----------+|Operating profit before exceptional other | 2,274| 1,800||operating income | | |+------------------------------------------+--------------+-----------+|Exceptional other operating income | 100| -|+------------------------------------------+--------------+-----------+|Operating profit | 2,374| 1,800|+------------------------------------------+--------------+-----------+|Finance revenue | 174| 34|+------------------------------------------+--------------+-----------+|Profit before tax | 2,548| 1,834|| | | |+------------------------------------------+--------------+-----------+|Tax | (784)| (469)|| | | |+------------------------------------------+--------------+-----------+|Profit for the period from continuing | 1,764| 1,365||operations | | |+------------------------------------------+--------------+-----------+| | | ||Basic earnings per ordinary share | 12.47p| 9.70p|| | | ||Diluted earnings per ordinary share | 12.36p| 9.59p|| | | |+------------------------------------------+--------------+-----------+ Hydro International plcPreliminary ResultsGroup Statement of Recognised Income and Expense (Unaudited)Year ended 31 December 2007 +------------------------------------------------+-------------+----------+| | 2007| 2006|| | £000| £000|+------------------------------------------------+-------------+----------+| | | || | | ||Profit for the financial year | 1,764| 1,365|| | | ||Exchange differences on translation of foreign | 31| (66)||operations | | || | | |+------------------------------------------------+-------------+----------+| | | ||Total recognised income and expense | 1,795| 1,299|| | | |+------------------------------------------------+-------------+----------+ Group Statement of Changes in Equity (Unaudited)Year ended 31 December 2007 2007 2006 £000 £000 Opening shareholders' funds 6,425 5,357 Total recognised gains and losses 1,795 1,299 (282)Dividend (325) 51Proceeds from issue of new shares 26 -Fair value of share options granted 3 Net increase in shareholders' funds 1,499 1,068 Closing shareholders' funds 7,924 6,425 Hydro International plcPreliminary ResultsConsolidated Balance Sheet (Unaudited)31 December 2007 2007 2006 £000 £000 ASSETSNon-current assetsIntangible assets - Goodwill 1,399 1,399Intangible assets - Other 226 248Property, plant and equipment 1,930 2,096Deferred tax assets 73 33Trade receivables 163 77 3,791 3,853Current assetsInventories 794 338Trade receivables 7,043 6,387Other receivables 218 231Cash and cash equivalents 4,848 2,677Derivative financial assets 50 - 12,953 9,633 TOTAL ASSETS 16,744 13,486 LIABILITIESCurrent liabilitiesTrade and other payables 7,899 6,028Current tax payable 728 315Deferred tax liability 26 39Borrowings - 27Obligations under finance leases 4 7Derivative financial liabilities - 12 8,657 6,428Non-current liabilitiesTrade and other payables - 4Deferred tax liability 163 191Borrowings - 433Obligations under finance leases - 5 163 633 TOTAL LIABILITIES 8,820 7,061 NET ASSETS 7,924 6,425 EQUITYCalled up share capital 710 706Share premium account 953 931Foreign currency translation reserve (35) (66)Retained earnings 6,296 4,854TOTAL EQUITY 7,924 6,425 Hydro International plcPreliminary ResultsConsolidated Cash Flow Statement (Unaudited)Year ended 31 December 2007 31 December 31 December 2007 2006 £000 £000 Cash generated from operations 3,478 1,794Interest paid (25) (42)Corporation tax paid (450) (285)Net cash from operating activities 3,003 1,467 Cash flows from investing activitiesPurchases of property, plant and equipment (124) (117)Proceeds from sale of property, plant and - 3equipmentPurchases of patents and trademarks (47) (65)Purchase of software assets (49) (62)Expenditure on product development (18) (14)Interest received 199 76Net cash used in investing activities (39) (179) Cash flows from financing activitiesProceeds from the issue of shares to 26 51shareholdersRepayment of borrowings (465) (41)Finance lease capital payments (8) (11)Dividends paid to shareholders (325) (282)Net cash generated from financing (772) (283)activities Net increase in cash and bank overdrafts 2,192 1,005Cash and bank overdrafts at the beginning 2,677 1,703of the periodExchange (losses)/gains on cash and bank (21) (31)overdraftsCash and bank overdrafts at the end of the 4,848 2,677period Reconciliation of profit to net cash flow from operating activities (Unaudited)Year ended 31 December 2007 31 December 31 December 2007 2006 £000 £000 Profit for the period 1,764 1365Finance costs (174) (34)Corporation tax expense 784 469Depreciation 286 220Amortisation of intangibles 136 114(Increase)/decrease in inventories (456) 274(Increase) in trade and other receivables (728) (126)Increase)/(decrease) in trade and other 1,867 (543)payablesIncrease in deferred tax asset 40 18(Decrease)/increase in deferred tax (41) 37liabilityNet cash generated from operations 3,478 1,794 Notes to the Preliminary Announcement 1. Basis of preparation The financial information included in the preliminary announcement has beencomputed in accordance with International Financial Reporting Standards (IFRS),this announcement does not contain sufficient information to comply with IFRS's.The company expects to publish full financial statements that comply with IFRS'sin April. Following the adoption of IFRS the information for the comparative period hasbeen restated from that which was contained in the statutory financialstatements for the period. Details of the principal IFRS accounting policiesapplied during the year were published in the Interim Report on 3 September2007. Following the publication of the Interim Report the Group has applied therequirements of IFRS2 (Share Based Payments) to the grant of new share optionsunder a SAYE scheme in October 2007 and IFRS7 (Financial Instruments:Disclosures). 2. Earnings per share Earnings per ordinary share are based on profit on ordinary activities aftertaxation, divided by a weighted average of 14,150,502 (2006 - 14,068,228) sharesin issue during the year. The diluted earnings per share are calculated afterthe inclusion of share options and the weighted average of ordinary shares usedin the calculation is 14,269,369 (2006 - 14,232,587). 3. Segment analysis of results The primary format used for segmental reporting is by business segment as thisreflects the internal management structure and reporting of the Group. Segmentresults, assets and liabilities include only items directly attributable to asegment. Business segments The Group comprises the following business segments: Stormwater The control of stormwater flows and the removal of trash, oil and sediment fromthese flows, largely for application in the existing urban environment and fornew residential and commercial development. Water and wastewater treatment The full range of treatment products for screening, grit removal, primary,secondary and tertiary treatment, for application in the municipal and regulatedwater industry. Geographic segments Hydro International has a worldwide presence in both business segments throughits subsidiary offices and through a network of licensees and distributors. 3. Segment analysis of results (continued) Analysis by business segment Year ended 31 December 2007 Water and Stormwater wastewater Unallocated Consolidated £'000 £'000 £'000 £'000 Segment revenue 13,883 12,075 - 25,958 Segment operating 2,000 1,010 (736) 2,274profit Exceptional other 100 - 100operating income Net finance revenue 174 174 Taxation (784) (784) Profit after tax 1,764 Year ended 31 December 2006 Water and Stormwater wastewater Unallocated Consolidated £'000 £'000 £'000 £'000 Segment revenue 12,216 10,180 - 22,396 Segment operating profit 1,619 514 (333) 1,800 Net finance revenue 34 34 Taxation (469) (469) Profit after tax 1,365 Year ended 31 December 2007 Water and Stormwater wastewater Unallocated Eliminations Total £'000 £'000 £'000 £'000 £'000 Assets 6,446 7,511 7,971 (5,184) 16,744 Liabilities 2,405 7,477 4,122 (5,184) 8,820 Capital 14 36 188 - 238expenditure Depreciation 50 110 262 - 422and amortisation 3. Segment analysis of results (continued) Year ended 31 December 2006 Water and Stormwater wastewater Unallocated Eliminations Total £'000 £'000 £'000 £'000 £'000 Assets 5,872 6,453 5,733 (4,572) 13,486 Liabilities 2,134 5,769 3,730 (4,572) 7,061 Capital 44 47 168 259expenditure Depreciation 57 70 207 334and amortisation Items have been classed as unallocated when it is not possible to identify towhich segment they should allocated, it was considered this gave a truerrepresentation than allocating the items on a relevant basis. Analysis by geographical segment Year ended 31 December 2007 UK Europe North Rest of Total America the world £'000 £'000 £'000 £'000 £'000 Revenue by destination 19,027 1,316 4,776 839 25,958 Turnover by origin 19,492 1,027 5,439 - 25,958 Profit/(loss on ordinary 1,734 108 706 - 2,548activities beforetaxation by origin Net assets by origin 6,649 396 879 - 7,924 Year ended 31 December 2006 UK Europe North Rest of Total America the world £'000 £'000 £'000 £'000 £'000 Revenue by destination 16,309 1,535 3,759 793 22,396 Turnover by origin 16,682 1,495 4,219 - 22,396 Profit/(loss on ordinary 1,587 234 13 - 1,834activities beforetaxation by origin Net assets by origin 5,743 270 412 - 6,425 4. Post balance sheet event Subsequent to the year end the directors have recommended a dividend of 2.8pence per share to be paid, totalling to £397,299. 5. Status of information The financial information set out above is unaudited and does not amount to fullaccounts for the purposes of Section 240 of the Companies Act 1985. The accountsfor the year ended 31 December 2007 are not yet audited but will be finalised onthe basis of the results included in this announcement. Full audited accounts of Hydro International plc for the twelve months ended 31December 2007 will be dispatched to shareholders on 21 April 2008 ahead of theAGM date of 22 May 2008. Copies of the Annual Report and Accounts will beavailable from the Company's registered office at Shearwater House, ClevedonHall Estate, Victoria Road, Clevedon, BS21 7RD from 21 April 2008 and will beavailable on the Company's website (www.hydro-international.biz) from the samedate. The audited accounts will be delivered to the Registrar of Companiesfollowing the Annual General Meeting. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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