Interim Results
28 September 2000 - 7:10PM
UK Regulatory
RNS Number:7286R
Reece PLC
28 September 2000
INTERIM STATEMENT OF THE UNAUDITED CONSOLIDATED RESULTS
FOR THE SIX MONTHS ENDED 30 JUNE 2000
CHAIRMAN'S STATEMENT
During the first half of 2000 Reece PLC generated operating losses
from continuing businesses of #96,000 compared to operating losses
of #306,000 for the same period last year. In add ition, the Cycles
business made operating losses of #347,000 prior to disposal on 5
May 2000. Sales from the continuing operations increased by over
13 per cent. in the first half despite the dominance of exports
which were held back by the weakness of the Euro.
SALE OF CYCLES BUSINESS AND ASSETS
The proceeds arising from the sale of the Cycles business and
assets were lower than anticipated. The completion accounts showed
that Reece was entitled to receive initial consideration of
#338,116 together with deferred consideration of #350,000 and
other small payments including those arising from the collection
of long-standing debtors and the sale of discontinued stock.
EXCEPTIONAL ITEMS
Exceptional costs include the loss on disposal of the Cycles
business and assets amounting to #136,000.
HM CUSTOMS & EXCISE DUTY CLAIM
HM Customs and Excise was successful in its appeal against the VAT
and Duties Tribunal decision in favour of E Reece in respect of
its claim for duty underpaid on the importation of bicycles.
APP
#'000 6 months 6 months
to to
30 June 30 June
2000 1999
Sales 1,517 1,504
Operating 64 59
profit
APP's sales and operating profits remained static during the first
half of 2000 when compared to the same period last year. Growth
was more difficult to achieve because more than half of APP's
sales go to Europe so that turnover has suffered from the weakness
of the Euro. This was offset by the strong underlying growth of
the market and of our customers. In the UK the competitive
pressure remains intense.
SERVICE (ENGINEERS)
#'000 6 months 6 months
to to
30 June 30 June
2000 1999
Sales 1,171 859
Operating 20 (275)
profit/(loss)
The order book of Service (Engineers) has continued to improve in
the first half during which a small operating profit was achieved.
This represents a significant improvement over the large losses
experienced in the first half of 1999. Considerable interest has
been generated by the new range of servo-driven computer
controlled decorating machines and the first orders for the direct
printing and the decal application machines have already been
achieved.
OUTLOOK
The European markets that APP serves are growing rapidly. However,
APP's second half results are unlikely to match those seen in the
first half. Recently, we have recruited a French speaking sales
and marketing executive to develop our respected brand in an
increasingly competitive European market.
Both the new servo-driven computer controlled decorating machines
and the new developments in clay forming and processing equipment
are expected to contribute to Service (Engineers) sales in 2001.
In addition, within the next few months we shall begin to build
the machines that comprise one of the major projects which are
expected to make a significant contribution next year. Indeed, the
level of enquiries for major projects is at a level not seen for
some years.
However, the lower initial consideration arising from the sale of
the Cycles business assets, the HM Customs and Excise claim and
the additional working capital requirements from the growth in
Service (Engineers) order book have put an unexpected strain on
the balance sheet of Reece PLC. We are working with our bankers to
ensure that we have the required short term funds at our disposal
to enable us to take full advantage of the overseas business
opportunities. It remains our intention to provide the longer term
working capital requirements by means of the sale of business
assets which will bring us closer to our objective of becoming a
more focussed business.
PETER KNAPTON
NON-EXECUTIVE CHAIRMAN
SUMMARISED PROFIT AND LOSS ACCOUNT
6 MONTHS 6 MONTHS
TO 30 TO 30
Not JUNE 2000 JUNE 1999
e
UNAUDITED UNAUDITED
#'000 #'000
TURNOVER
- continuing operations 2,688 2,363
- discontinued operations 1,178 2,354
--------- ---------
3,866 4,717
========= =========
TOTAL OPERATING (LOSS)
- continuing operations (96) (306)
- discontinued operations (347) (145)
--------- ---------
(443) (451)
Non-operating exceptional items (136) -
Interest payable less interest (25) (23)
receivable
--------- ---------
(LOSS) ON ORDINARY ACTIVITIES BEFORE (604) (474)
TAXATION
Tax on (loss) on ordinary activities 2 - -
--------- ---------
(LOSS) ON ORDINARY ACTIVITIES AFTER (604) (474)
TAXATION
Dividends 3 - -
--------- ---------
RETAINED (LOSS) FOR THE PERIOD (604) (474)
========= =========
Earnings per share 4 (0.34)p (0.27)p
Basic ========= =========
Diluted (0.34)p (0.27)p
========= =========
DIVIDENDS PER SHARE - -
========= =========
SUMMARISED CONSOLIDATED CASH FLOW STATEMENT
6 MONTHS TO 6 MONTHS
30 JUNE TO
2000 30 JUNE
UNAUDITED 1999
UNAUDITED
#'000 #'000
Net cash (outflow) from operating (289) (246)
activities
Returns on investment and servicing of (25) (23)
finance
Taxation paid - -
Capital expenditure and financial 88 -
investment
Acquisitions and disposals 610 -
Financing (392) (62)
----------- ----------
- --
DECREASE IN CASH (8) (331)
=========== ==========
SUMMARISED CONSOLIDATED BALANCE SHEET
AT 30 JUNE AT 30 JUNE
2000 1999
UNAUDITED UNAUDITED
#'000 #'000
FIXED ASSETS
Tangible assets 786 1,270
------------- -------------
CURRENT ASSETS
Stocks 1,537 2,854
Debtors due after one year 125 -
Debtors due within one year 1,416 2,784
------------- -------------
3,078 5,638
CREDITORS: Amounts falling due (1,910) (2,942)
within one year
------------- -------------
NET CURRENT ASSETS 1,168 2,696
------------- -------------
TOTAL ASSETS LESS CURRENT 1,954 3,966
LIABILITIES
CREDITORS: Amounts falling due after
more than one year (20) (147)
------------- -------------
NET ASSETS 1,934 3,819
============= =============
CAPITAL AND RESERVES
- called up share capital 6,921 6,921
- share premium account 2,547 2,547
- profit and loss account (7,534) (5,649)
------------- -------------
Equity shareholders' funds (3,217) (1,332)
Non-equity shareholders' funds 5,151 5,151
------------- -------------
TOTAL SHAREHOLDERS' FUNDS 1,934 3,819
============= =============
NOTES
1. NON-OPERATING EXCEPTIONAL ITEMS
6 MONTHS TO 6 MONTHS TO
30 JUNE 30 JUNE
2000 1999
UNAUDITED UNAUDITED
#'000 #'000
The (loss) on ordinary activities before
taxation is after charging the following
exceptional items;
Loss on disposal of discontinued 136 -
operations
----------- -----------
- -
2. TAXATION
No tax charge arises in the period due to trading losses (1999 -
#nil)
3. DIVIDENDS
The directors do not recommend the payment of a dividend (1999 -
#nil)
4. LOSS PER SHARE
6 MONTHS TO 6 MONTHS
30 JUNE TO
2000 30 JUNE
UNAUDITED 1999
UNAUDITED
#'000 #'000
These have been calculated on losses of: (604) (474)
=========== ==========
000's 000's
The weighted average number of shares was:
Basic 1777,054 1777,054
Adjustments - -
----------- ----------
Diluted 177,054 177,054
=========== ==========
5. CONTINGENT LIABILITY
As stated in previous financial statements the group has been
notified by H M Customs & Excise of a potential liability in
respect of duty underpaid on the importation of cyles.
Although judgement was given in favour of Reece PLC a subsequent
appeal by H M Customs was decided in their favour. The amount of
the potential liability is #152,000 plus costs.
No specific provision has been made for the liability.
5. INTERIM REPORT
This interim report was neither audited nor reviewed by the
auditors. It was approved by the Board on 28 September 2000. It
has been prepared using accounting policies that are consistent
with those adopted in the statutory accounts for the year ended 31
December 1999.
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