24th Feb 2006 07:01
Blueheath Holdings PLC24 February 2006 For immediate release 24 February 2006 BLUEHEATH HOLDINGS PLC (the "Company") Year End Trading Statement Blueheath is a national delivered wholesaler which uses sophisticated,proprietary technology to offer a substantial cost advantage over establishedplayers in the £16.4bn grocery wholesale sector. The Company today provides anupdate on trading for the year ending 4 March 2006. Preliminary results will beannounced on 8 May. Integration Update The Company acquired A C Ward & Son Limited ("ACW") in November 2005 followingthe acquisition of CTM Wholesale earlier in the year. At the time, the Directorsanticipated that the enlarged group would be able to achieve improved operatingmargins through combining buying volumes, the application of Blueheath'stechnology and business processes to the ACW operation, and the integration ofcentral overheads. We are pleased to report that the integration is progressing well. Over the pastthree months, the Company had harmonised the product range and secured improvedbuying terms with the move on 1 February 2006 to a single buying group (NISA),implemented the Blueheath technology at the ACW operation, combined the southerntransport operations thereby yielding substantial cost benefits, and eliminateda significant quantity of overhead costs. The Company is now finalising theconfiguration of the stock picking operations. At the same time, we are pleasedto report that there have been no material customer losses at either of theacquired businesses. The Company expects to complete the final stages of the integration work in thefirst quarter of the new financial year. Indications are that the synergybenefits, once these final stages are completed, will take the Company throughbreakeven. Trading Update With the successful intergration of the acquired businesses and the addition ofthe revenue from recent account wins, the current run rate represents anincrease in the scale of the business of more than two and a half times over thepast 12 months. Recent market conditions have however been extremely challenging with manycustomers trading at levels substantially below comparable performance in theprevious year. As a consequence of this and some delays in the timing of thedelivery of merger benefits until the buying group switch could be completed,the Directors anticipate that both revenues and profits in the current financialyear will be below current market expectations. Nevertheless, the Directorsexpect revenue for the year ended 4 March 2006 to be approximately £133m, a 90%increase on the previous year of £70m. Trading Prospects The Company has now reached a platform of scale from which the Directors expectthe business to be profitable when the final stages of the integration have beencompleted. With a strong pipeline of new business and a number of potentialfurther acquisition targets, the Directors expect the Company to continue togrow its market share and believe that the business is well positioned to buildon this platform in the year ahead. Blueheath Holdings plc Douglas Gurr, Chief Executive Tel: 020 7689 2455 Simon Mindham, Finance Director Tel: 020 7689 2464 Buchanan Communications Tel: 020 7466 5000Mark Edwards / Nicola Cronk / James Strong This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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