14th Jun 2006 14:00
Ensor Holdings PLC14 June 2006 ENSOR HOLDINGS PLC PRELIMINARY ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 31 MARCH 2006 CHAIRMAN'S STATEMENT Sales Operating ProfitUP 9% 3% LESS Dividend total Prospects1p per share CAUTIOUS OPTIMISM Results As anticipated in my report at the half-year, trading continued to be slow,however we were able to increase our total sales by some 9% to £26,704,000 (2005: £24,537,000) and maintain our gross margins. During the period we made further investment in a number of our businesses,increasing costs but strengthening the Group with development of new products.We relocated and enlarged our door manufacturing company. We integrated our newacquisition, Wood's Packaging Limited, and generally invested in our managementstructure. This total expenditure should give progressive results in thefuture. Against these higher costs, and increased regular charges relating topensions, there is a credit from the change in pension provision referred tobelow. These matters result in an operating profit slightly lower at £1,511,000 (2005 :£1,550,000). Last year we had the added benefit of a one-off sale of property of £402,000which is, naturally, not repeated in the current year. Interest costs increased following the purchase of Wood's Packaging and our taxcharge is lower at £362,000 (2005 : £425,000). Our earnings per share for the year are calculated at 2.7p per share (2005 :2.9p per share) before exceptional items. Balance Sheet & Pensions Our balance sheet is stronger and the cash situation remain satisfactory but dueto the latest accounting rules under FRS17, we must show in the balance sheet adeficit in the pension funding of £1,628,000. This is a theoretical amountcalculated by our professional actuaries. During the year it was decided to cease accruals in our final salary scheme.Affected members have been offered (and have accepted) an alternative moneypurchase pension scheme. This change will stabilise our pension situation. Gearing for the period is satisfactory at 29% (or 36% allowing for the pensiondeficit). Trading During the year successful efforts were made to ensure maintained and increasedturnover and all our companies were profitable. The Group is mainly concerned with the distribution of a wide range of productsfor the construction industry. This includes supplies of specialistEnsor-designed electric and electronic door controls, quality industrial doorssupplied to the trade, specialist tools for the roofing and constructionindustries, high quality roofing and drainage products, wood and metal fencingand gates, processed rubber crumb for safety and sports facilities and, from ournew Group member, packing materials for the furniture and other industries.This is a wide range of products, marketed and distributed from some 10locations in the UK, with distribution arrangements in Europe and beyond. A growing number of products are sourced from our own office based in China,approximately one hour's flight from Shanghai and Hong Kong, where we have ahardworking team operating this successful office buying for and servicing theGroup. Currency fluctuations, of course, are an important but controlledconcern. Our fencing company will have to be relocated due to the end of a lease. Thismay provide opportunities for progress for this Group company. Prospects & Dividends The Board is conscious that there has been a slowdown of the economy,particularly affecting our industry but we are cautiously confident of our plansfor future successes. The Board is, therefore, recommending a maintained, finaldividend of 0.625p per share, making a total for the year of 1.0p per share,well covered by earnings. Subject to approval at the Annual General Meeting, the final dividend will bepayable on 14 August 2006 to shareholders on our Register on 30 June 2006. Directors & Staff During the year Mr Brian Morgan retired from the Board having given exceptionalservice as a Director for many years. Thanks are given to him for his veryvaluable service. We also, this year, welcome Mr Peter Regis and Mr Roger Harrison to the Board asNon-executive Directors and believe their experience will contribute to thefuture success of Ensor. My thanks, again, are due to the managers and staff of the Group for their muchappreciated efforts during the year. Ken HarrisonChairman14 June 2006 AUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNTfor the year ended 31 March 2006 Restated Restated 2006 2006 2005 2005 £'000 £'000 £'000 £'000Turnover Continuing operations 25,274 24,537Acquisitions 1,430 - ______ ______ 26,704 24,537 Cost of sales (18,458) (16,972) ______ ______ Gross profit 8,246 7,565 Distribution costs (1,359) (1,245)Administrative expenses (5,376) (4,770) ______ ______ (6,735) (6,015) Operating profitContinuing operations 1,079 1,655Acquisitions 200 -Pension scheme curtailment 374 -Amortisation of goodwill (142) (105) ______ ______ ______ ______ 1,511 1,550Exceptional itemProfit on disposal of fixed assets - 402 ______ ______ Profit on ordinary activities before interest 1,511 1,952 Interest payable (193) (158)Other finance charges (155) (119) ______ ______ (348) (277) ______ ______ Profit before taxation 1,163 1,675 Taxation (362) (425) ______ ______ Profit for the year 801 1,250 ______ ______ Dividends per shareInterim dividend paid 0.375p 0.375pFinal dividend proposed 0.625p 0.625p ______ ______ 1.000p 1.000p ______ ______Earnings per shareBasic 2.7p 4.2pDiluted 2.7p 4.1pBasic before exceptional items 2.7p 2.9p ______ ______ AUDITED BALANCE SHEETSat 31 March 2006 Restated Restated Group Group Company Company 2006 2005 2006 2005 £'000 £'000 £'000 £'000Fixed assetsGoodwill 2,280 1,665 - -Tangible assets 3,525 3,559 1,049 1,102Investments - - 10,286 7,372 ______ ______ ______ ______ 5,805 5,224 11,335 8,474Current assetsStocks 4,369 4,301 - -Debtors 5,768 4,870 316 378 ______ ______ ______ ______ 10,137 9,171 316 378 Creditors: amounts falling due within one year (7,234) (5,746) (3,568) (1,313) ______ ______ ______ ______ Net current assets/(liabilities) 2,903 3,425 (3,252) (935) ______ ______ ______ ______ Total assets less current liabilities 8,708 8,649 8,083 7,539 Creditors: amounts falling due after morethan one year (54) (265) (50) (250) ______ ______ ______ ______ Net assets excluding pension liability 8,654 8,384 8,033 7,289 Pension liability (1,628) (2,254) (1,628) (2,254) ______ ______ ______ ______ 7,026 6,130 6,405 5,035 ______ ______ ______ ______ Capital and reservesCalled up share capital 2,941 2,941 2,941 2,941Share premium account 470 470 470 470Revaluation reserve 877 883 197 197Profit and loss account 2,738 1,836 2,797 1,427 ______ ______ ______ ______ Equity shareholders' funds 7,026 6,130 6,405 5,035 ______ ______ ______ ______ AUDITED CONSOLIDATED CASH FLOW STATEMENTfor the year ended 31 March 2006 Restated 2006 2005 £'000 £'000 Net cash inflow from operating activities 1,343 1,418 ______ ______ Returns on investments and servicing of financeInterest paid (185) (154)Interest element of finance lease payments (3) (4) ______ ______ Net cash outflow from servicing of finance (188) (158) ______ ______ TaxationUK corporation tax paid (399) (341) ______ ______ Net cash outflow from payment of taxation (399) (341) ______ ______ Capital expenditure and financial investmentPurchase of tangible fixed assets (482) (475)Sale of tangible fixed assets 65 990 ______ ______Net cash (outflow)/inflow from capital expenditure and financial (417) 515investment ______ ______ Acquisitions and disposalsAcquisition of subsidiary undertaking (855) - ______ ______ Net cash outflow from acquisition (855) - ______ ______ Equity dividends paid (294) (257) ______ ______ Net cash (outflow)/inflow before use of liquid resources and financing (810) 1,177 ______ ______Financing Issue of shares - 1Repayment of term loans (200) (200)Capital element of finance lease payments (49) (33) ______ ______ Net cash outflow from financing (249) (232) ______ ______ (Decrease)/increase in cash in the year (1,059) 945 ______ ______ OTHER AUDITED STATEMENTSfor the year ended 31 March 2006 Consolidated Statement of Recognised Gains and Losses Restated 2006 2005 £'000 £'000 Profit for the financial year 801 1,250Actuarial gain/(loss) 555 (963)Related deferred tax (166) 289 ______ ______ Total recognised gains for the year 1,190 576 ______Prior year adjustment as explained in note 1 (2,254) ______ (1,064) ______ Reconciliation of Movements in Equity Shareholders' Funds Group Group Company Company 2006 2005 2006 2005 £'000 £'000 £'000 £'000 Opening shareholders' funds as previously reported 8,200 7,253 7,105 6,556Prior year adjustment on adoption of FRS21, "Events after the 184 148 184 148Balance Sheet Date"Prior year adjustment on adoption of FRS17, "Retirement (2,254) (1,590) (2,254) (1,590)Benefits" ______ ______ ______ ______ Restated opening shareholders' funds 6,130 5,811 5,035 5,114Recognised gains for the year 1,190 576 1,664 178Dividends paid (294) (257) (294) (257) ______ ______ ______ ______ 7,026 6,130 6,405 5,035 ______ ______ ______ ______ NOTES 1. Accounting policies Basis of preparation The financial statements are prepared in accordance with applicable accountingstandards under the historical cost convention as modified by the revaluation ofcertain fixed assets. The directors have reviewed the accounting policies in accordance with FRS 18 "Accounting Policies" and have concluded that the following changes are requiredfrom the previous year. The Group has adopted FRS 17, 'Retirement benefits' and FRS 21, 'Events afterthe balance sheet date'. The adoption of these standards represents a change inaccounting policies and the comparative figures have been restated accordingly. The effect of the change in accounting policy to adopt FRS 17 was to decreasestaff costs by £494,000 (2005: £133,000), increase other finance costs by£155,000 (2005: £119,000), increase deferred taxation by £100,000 (2005:£4,000), increase profit for the year by £239,000 (2005: increase £10,000) andto increase the total recognised gains by £389,000 (2005: decrease £674,000).Equity shareholders' funds have been reduced by £1,628,000 (2005: £2,254,000) asa result of the new requirement to recognise the pension fund deficit in thebalance sheet. The effect of the change in accounting policy to adopt FRS 21 was to recognisethe final proposed dividend for the year ended 31 March 2005 of £184,000 in thecurrent year. The final proposed dividend for the current year of £184,000 willbe recognised in the following year as it has yet to be approved. Basis of consolidation The Group financial statements consolidate the financial statements of theCompany and its subsidiary undertakings at 31 March using acquisitionaccounting. The results of subsidiary undertakings acquired or disposed ofduring a financial year are included from, or up to, the effective date ofacquisition or disposal. On acquisition of a subsidiary, all of thesubsidiary's assets and liabilities existing at the date of acquisition arerecorded at their fair values reflecting their condition at that date. Profits or losses on intra-group transactions are eliminated in full. 2. Earnings per share The calculation of earnings per share is based upon the profit after taxation of£801,000 (2005 : £1,250,000) divided by the weighted average number of ordinaryshares in issue during the year, 29,405,659 (2005: 29,402,454). The fullydiluted earnings per share is based upon the weighted average of 30,144,743shares (2005: 29,970,517). The dilution in both years is due to subsisting shareoptions. The adjusted earnings per share is calculated by reference to the profit aftertaxation adjusted to exclude exceptional items as shown below. Restated Restated 2006 2006 2005 2005 Pence per Pence per £'000 share £'000 Share Profit for the financial year 801 2.7p 1,250 4.2pExceptional items:Profit on disposal of fixed assets - - (402) (1.3p)Taxation in respect of the exceptional items - - - - ______ ______ ______ ______ Adjusted profit before exceptional items 801 2.7p 848 2.9p ______ ______ ______ ______ 3. Reconciliation of operating profit to net cash inflow from operating activities Restated 2006 2005 £'000 £'000 Operating profit 1,511 1,550Depreciation of tangible fixed assets 479 474Amortisation of intangible fixed assets 142 105Profit on sale of tangible fixed assets (14) (25)Decrease/(increase) in stocks 16 (481)Increase in debtors (902) (150)Increase in creditors 605 78Contributions to pension scheme in excess of charge to profit and loss (120) (133)Pension scheme curtailment (374) - ______ ______ Net cash inflow from operating activities 1,343 1,418 ______ ______ 4. Analysis of changes in net debt At At 31 March 31 March 2005 Cashflows 2006 £'000 £'000 £'000 Bank overdraft (1,190) (1,059) (2,249)Bank loans (450) 200 (250) Finance leases (65) 49 (16) ______ ______ ______ (1,705) (810) (2,515) ______ ______ ______ 5. Reconciliation of net cash flow to movement in net debt 2006 2005 £'000 £'000 (Decrease)/increase in cash in the year (1,059) 945Cash outflow from repayment of debt 249 233 ______ ______ Movement in net debt arising from cash flow (810) 1,178New finance leases - (61) ______ ______ Movement in net debt (810) 1,117Net debt at 1 April 2005 (1,705) (2,822) ______ ______ Net debt at 31 March 2006 (2,515) (1,705) ______ ______ 6. Basis of preparation The financial information set out in this preliminary announcement of resultsdoes not constitute the Company's statutory accounts for the years ended 31March 2006 or 31 March 2005 but is derived from those accounts. Statutoryaccounts for 2005 have been delivered to the Registrar and those for 2006 willbe delivered following the Company's Annual General Meeting. The IndependentAuditors have reported on these accounts. Their reports were unqualified anddid not contain statements under section 237(2) or (2) of the Companies Act1985. 7. Other information The Annual General Meeting of the Company will be held at the Company'sregistered office, Ellard House, Dallimore Road, Manchester M23 9NX at 10.00a.m. on Wednesday 19 July 2006. The Report and Accounts will be posted to shareholders shortly. Additionalcopies of the Annual Report and of this statement will be available at theCompany's registered office. Enquiries: Ensor Holdings PLCKen Harrison0161 945 5953 Westhouse Securities LLPTim Feather0161 838 9140 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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