REC Record Plc

RNS No 1575x 
REECE PLC
31 July 1997 
 

Interim Statement of the Unaudited Consolidated Results
for the six months ended 30 June 1997
 
 
                             Unaudited   Unaudited  Audited
                                                     Year
                                     6          6    ended
                                months     months  31.12.96
                                 ended      ended        
                               30.6.97    30.6.96
                                                  
                              #'000     #'000     #'000
                                                  
Turnover                      9,011     8,822     18,880
Cost of sales                 (6,237)   (6,296)   (13,617)
                              ______    ______    ______
Gross profit                  2,774     2,526     5,263
Overheads                     (2,691)   (2,366)   (4,817)
Exceptional items             (44)      (25)      (167)
                              ______    ______    ______
Operating profit              39        135       279
Interest                      (59)      (56)      (113)
                              ______    ______    ______
Profit (loss) on ordinary     (20)      79        166
activities before taxation
Taxation                      -         -         -
                              ______    ______    ______
Profit (loss) on ordinary     (20)      79        166
activities after taxation
Dividend                      -         -         -
                              ______    ______    ______
                                                  
Retained profit (loss) for    (20)      79        166
the period
                              ______    ______    ______
                                                  
Earnings (loss) per ordinary  (0.01)p    0.05p      0.09p
share
                              ______    ______    ______
                                                  
 
 
Notes :
 
i.    The  turnover, gross profit and operating profit are  all
 derived from the continuing operations.
 
ii.   The  calculation of the earnings per  ordinary  share  is
 based  on  the loss on ordinary activities after  taxation  of
 #20,000  (1996: profit - #79,000) and on 177,054,416  ordinary
 shares  (1996: 177,054,416), being the weighted average number
 of  ordinary shares in issue during the period and during  the
 year ended 31 December 1996.
 
iii.  The  above financial information does not amount to  full
 accounts within the meaning of section 255 of the Companies Act
 1985.    Full  accounts for the year ended 31  December  1996,
 which include an unqualified audit report, have been delivered
 to the Registrar of Companies.

 
Chairman's Statement
 
APP
#'000          6 months ended    6 months ended
                   30/6/97          30/6/96
Sales         1,711             1,477
Operating     112               49
profit
 
The  Door  Panel  business  produced a  significantly  improved
profit  on  the  back of higher volumes in both  the  home  and
export  markets  despite  an exchange  loss  of  #44,000  (1996
exchange profit of #13,000) caused by the strength of sterling.
 
Cycles
#'000          6 months ended    6 months ended
                   30/6/97          30/6/96
Sales         3,382             3,520
Operating     75                140
profit
 
The  result  was  adversely affected by the  trading-out  of  a
budget priced range of cycles at an extremely low margin in the
early part of the year.  This problem has now been solved.   As
usual several new models were launched including a new range of
"Reece" bikes.
 
Fasteners
#'000          6 months ended    6 months ended
                   30/6/97          30/6/96
Sales         2,186             1,797
Operating     (56)              (101)
profit (loss)
 
The  effect  of  the  strategy of increasing  sales  volume  is
apparent.   This  has  been supported by an  increase  in  both
working  capital and employees which has enabled a much  higher
service level to be achieved.
 
Service Engineers
#'000          6 months ended    6 months ended
                   30/6/97          30/6/96
Sales         1,732             2,028
Operating     172               275
profit
 
The Service Engineers' business has had a difficult time due to
its  heavy  dependence on export markets.  The appreciation  of
sterling  against  the European currencies  in  particular  has
caused  customers to defer placing orders.   To cope  with  the
lower business levels the work force has been reduced.
 
Dividend
 
Once  the  deficit on the Company's distributable reserves  has
been eliminated the payment of a dividend will be considered.
 
Future
 
In  the  annual  report I identified that the Group  needed  to
resolve  two  key problems namely the Fastener losses  and  the
level  of central overheads.   Clear progress has been made  in
both of these areas.  I am hopeful that Fasteners will continue
to  show an improvement in the second half.  The Cycle division
has its overstocking problems behind it and has traded well  in
the  last  two  months.   In the Door Panel business  the  home
market  is  expected to remain buoyant but the  impact  of  the
continued strength of sterling on export profitability  remains
a  concern.   At Service Engineers the order book remains below
expectations.   Overall the strength of sterling is critical to
the performance of the business in the second half of the year.
 
Peter Knapton
Chairman
 
Enquiries  : Mike Norris - Tel. 01634 373551

 
END

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