Final Results
30 April 2001 - 7:41PM
UK Regulatory
RNS Number:8854C
Reece PLC
30 April 2001
REECE PLC
30 APRIL 2001
Reece plc
Preliminary Statement for the year ended 31 December 2000
CHAIRMAN'S STATEMENT
Results
During the year ended 31 December 2000, the loss on ordinary activities before
taxation, discontinued operations, exceptional items and the loss arising on
the sale of discontinued operations was #585,000, compared with a loss of #
857,000 in 1999.
The total loss for the year is #2,031,000 (1999: #1,701,000) and this
incorporates operating exceptional costs of #193,000 (1999: #504,000) and the
losses arising on the disposal of the Cycles business and APP business of #
540,000 and #362,000 respectively.
Disposal
On 30 January 2001, Service (Engineers) plc, our trading subsidiary completed
the sale of the business and principal assets of the APP Division to Cavalier
Technical Services Limited. Subject to minor adjustments, the sale price was
#230,000 which was some #210,000 below the value of the net assets.
APP's French agent resigned in August 2000 with subsequent monthly turnover
being considerably reduced from the first half of the year and compared to the
comparative period last year to the extent that APP was making ongoing losses
which the Group could not sustain. The trading losses of APP during the
second half of the year amounted to #189,000.
The net sale proceeds were applied in reducing the Group's short term bank
indebtedness. This disposal has achieved the objective of eliminating the
requirement for the Group to finance ongoing trading losses within the APP
Division.
Dividend
The directors do not recommend the payment of a dividend.
Change of directors
Steve Smith resigned from the Board on 23 June 2000 and on the same date Peter
Gyllenhammar, deputy Chairman of Montpellier Group plc (formerly YJL plc), was
appointed a non executive director. Mike Norris resigned on 5 May 2000. Peter
Knapton resigned on 20 October 2000 and on the same date Alexander McArthur,
who also is employed by Montpellier Group plc, was appointed executive
director of the Group.
Exceptional items
Further costs have been borne during the year with respect to the sale of the
Cycles business reported in the last years annual statement. The purchaser
of the Cycles division (a company owned by your former managing director, Mike
Norris, and his wife) has defaulted on the #100,000 instalment due on 5
November 2000 forming part of the total deferred consideration of #350,000.
Your company remains in talks with Mr Norris and others, but included in these
reported figures is a provision of #237,500 against the total deferred
consideration receivable.
As reported in the half year statement, HM Customs and Excise was successful
in its appeal in respect of its claim for duty underpaid on the importation of
bicycles which, with associated professional costs, totals #172,000.
Operating losses of #276,000 were generated by the Cycles business up to the
date of sale on 5 May 2000.
The exceptional items for the year also include a #362,000 provision relating
to the expected loss on the disposal of the APP division.
Current trading and prospects
The Group's remaining business is Service (Engineers) plc which manufactures
ceramic equipment. As previously reported, the problems in the Far East
economies and the strength of the pound have contributed to difficult trading
conditions over the last two years or so. However, the company is now
enjoying a higher level of enquiries for major projects than for some years.
Service (Engineers) has made a profitable start to its trading in the year to
date.
The Group has had a torrid time over the last three years and with the support
of its bank and certain of its major creditors has now stabilised its
position. Your Board is confident of its future trading position and is
considering a number of options available to it.
ALEXANDER McARTHUR
Chairman and Chief Executive
30 April 2001
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended 31 December 2000
2000 1999
Notes #'000 #'000
Turnover
- continuing operations 2,273 1,881
- discontinued operations 3,579 8,062
---------- ----------
5,852 9,943
---------- ----------
Non exceptional cost of sales (4,591) (7,802)
Exceptional cost of sales - (230)
---------- ----------
Cost of sales (4,591) (8,032)
---------- ----------
Gross profit 1,261 1,911
Selling and distribution expenses (718) (1,389)
Non exceptional administrative expenses (1,441) (1,884)
Exceptional administrative expenses (193) (274)
Administrative expenses (1,634) (2,158)
---------- ----------
Total expenses (2,352) (3,547)
---------- ----------
Operating loss
- continuing operations (740) (1,012)
- discontinued operations (351) (624)
---------- ----------
Total operating loss (1,091) (1,636)
Loss on sale of discontinued operations 1 (902) -
---------- ----------
Loss on ordinary activities before interest and (1,993) (1,636)
tax
Net interest payable (38) (65)
---------- ----------
Loss on ordinary activities before taxation (2,031) (1,701)
Taxation 2 - -
---------- ----------
Deficit for the financial year (2,031) (1,701)
========== ==========
Basic and diluted loss per ordinary 1p share 3 (1.15p) (0.96p)
Adjusted loss per ordinary 1p share 3 (0.33p) (0.49p)
========== ==========
The group has no recognised gains and losses other than the losses above and
therefore no separate statement of total recognised gains and losses has been
presented.
CONSOLIDATED BALANCE SHEET
as at 31 December 2000
2000 1999
#'000 #'000
Fixed Assets
Tangible assets 701 996
---------- ----------
Current Assets
Stocks 1,187 2,494
Debtors 563 1,910
Cash at bank and in hand 147 101
---------- ----------
1,897 4,505
Creditors: Amounts falling due within one year (2,085) (2,844)
---------- ----------
Net current (liabilities)/assets (188) 1,661
---------- ----------
Total assets less current liabilities 513 2,657
Creditors: Amounts falling due after more than one year (6) (119)
---------- ----------
Net assets 507 2,538
========== ==========
Capital and reserves
- Called up share capital 6,921 6,921
- Share premium account 2,547 2,547
- Profit and loss account (8,961) (6,930)
Equity shareholders' funds (4,644) (2,613)
Non-equity shareholders' funds 5,151 5,151
---------- ----------
Total shareholders' funds 507 2,538
========== ==========
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December 2000
2000 1999
#'000 #'000
Net cash (outflow)/inflow from operating activities (150) 101
Returns on investments and servicing of finance
Interest paid on bank loan and overdraft (23) (34)
Interest element of hire purchase and finance lease (15) (31)
payments
---------- ----------
(38) (65)
Taxation
UK Corporation tax paid - -
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (77) (82)
Proceeds from sales of tangible fixed assets 10 14
---------- ----------
(67) (68)
Acquisitions and disposals
Proceeds from disposal of the Cycles division 377 -
---------- ----------
Cash inflow/(outflow) before financing 122 (32)
Financing
Capital element of hire purchase and finance lease rental
payments (86) (152)
Bank loan repayments (333) (167)
---------- ----------
(419) (319)
---------- ----------
Decrease in cash (297) (351)
========= =========
1. LOSS ON SALE OF DISCONTINUED OPERATIONS
The loss on the sale of discontinued operations relates to:
2000 1999
#'000 #'000
Loss on disposal of the Cycles division 540 -
Provision for the loss on the disposal of the APP
division 362 -
--------- ---------
902 -
--------- ---------
The loss arising on the disposal of the Cycles division includes a
provision of #237,500 against the deferred consideration receivable and a
provision of #172,000 in relation to duty payable on the importation of
bicycles.
The provision for the loss on the disposal of the APP division mainly
reflects the impairment of certain assets disposed post year end.
2. TAXATION
No tax charge arises in the year due to trading losses (1999: #nil).
There are tax losses amounting to approximately #1.9 million (1999: #0.8
million) which are available for offset against future taxable profits arising
in certain businesses.
3. LOSS PER ORDINARY SHARE
(a) The basic loss per Ordinary 1p share is calculated on the deficit for
the year of #2,031,000 (1999: #1,701,000) and on 177,054,416 (1999 :
177,054,416) ordinary 1p shares being the weighted average number of ordinary
shares in issue during the year.
(b) The diluted loss per share is the same as the basic loss per share for
both years as the share options outstanding at the end of both years are not
dilutive.
(c) The adjusted loss per ordinary 1p share figure has also been presented
to eliminate the effects of the exceptional items and the loss arising on the
disposal of discontinued operations. The presentation, calculated on the
basis of the weighted average number of ordinary 1p shares in issue, shows the
loss per ordinary 1p share that is attributable to the normal trading
activities of the Group. The reconciliation between the two figures is as
follows:
2000 1999 2000 1999
#'000 #'000 (p) (p)
Deficit for the basic loss per ordinary 1p
share calculation (2,031) (1,701) (1.15) (0.96)
Operating loss from discontinued operations 351 624 0.20 0.35
Exceptional costs - continuing operations 193 220 0.11 0.12
Loss on disposal of discontinued operations
902 - 0.51 -
------- ------- ------- -------
Adjusted loss per ordinary 1p share (585) (857) (0.33) (0.49)
======= ======= ======= =======
4. PRELIMINARY STATEMENT
This preliminary statement, which has been agreed with the auditors, was
approved by the Board on 30 April 2001. It is not the company's statutory
accounts. The statutory accounts for the year ended 31 December 1999 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. The statutory accounts for the year ended 31 December
2000 have not yet been approved, audited or filed.
END
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