RNS Number:0219M
Vista Group PLC
09 May 2005
FOR RELEASE 7.00AM 9 MAY 2005
VISTA GROUP PLC
("Vista" or the "Company")
(Leading manufacturer of PVC door panels and composite doors)
PRELIMINARY ANNOUNCEMENT OF AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2004
Main Points
Period ended Pro forma Change
31.12.04 02.01.04
Turnover #7.85m #7.48m 5%
Profit before tax, goodwill amortisation
and exceptional items #610,677 #1.07m -43%
Profit before tax #371,194 #1.07m -65%
Earnings per share 2.2p 4.8p -54%
* First full year since flotation on AIM
* Some of the most difficult trading conditions for several years
* Postponed orders from 2004 should boost sales in the current year
* UK Government's "Decent Homes Initiative" provides opportunities for
Vista
* 5 year contract with Connaught plc to supply Wirral Borough Council
* Confident of an improved performance
For further information:
Vista Group plc
Keith Sadler (Chief Executive) 07803 921 526
0151 608 1423
Keith Salisbury (Non Executive Director) 07810 418 669
Beattie Financial
Brian Coleman-Smith / Jo Clewlow / Tim Pilgrim 020 7053 6400
VISTA GROUP PLC
("Vista" or the "Company")
(Leading manufacturer of PVC door panels and composite doors)
PRELIMINARY ANNOUNCEMENT OF AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2004
Chairman's Statement
Introduction
These are the first full year set of results since the shares were admitted to
trading on the Alternative Investment Market on 19 December 2003 and have
coincided with some of the most difficult trading conditions for several years.
The Board is committed to maintaining a good relationship with investors and is
working hard to deliver the growth that investors expect from the company.
Results
Turnover in the period increased by just under 5% to #7.85m (2003 pro forma:
#7.48m). However, profit before tax, goodwill amortisation and exceptional items
fell by 43% to #610,677 (Year ended 31 December 2004: pro forma: #1.07m) and by
65% to #371,194 (Year ended 31 December 2004: pro forma: #1.07m) after goodwill
amortisation and the exceptional items relating to the BHD Group Limited ("BHD")
going into receivership. Earnings per share decreased by 54% to 2.2p (2003 pro
forma: 4.8p).
Gross margins have declined during the year due to a lower proportion of
composite doors and a higher volume of lower margin work for BHD during the
first half. Administrative expenses increased despite careful cost control,
partly as a result of becoming a listed company and partly following Vista's
independence from the BHD Group in November 2003.
The receivership of BHD, one of Vista's largest customers, resulted in an
exceptional write off of #128,987 but also contributed to the Company incurring
further additional staff costs over a number of months as semi skilled staff
were retained to cope with the potential demand from the new owners. These
orders never materialised as Laird Lifestyle Products purchased inter company
and produced the products in-house.
During the year under review we continued to invest in the business with capital
expenditure amounting to #206,000. Three compacting machines were acquired, to
enable the Company to reduce the cost of removing waste from the factory on
Merseyside by recycling all paper, plastic and polythene; whilst two diamond
bead glue machines and six pneumatic presses were also acquired to reduce the
glue waste and increase the overall quality of the door panels. A further
#150,000 is budgeted for the current financial year.
The results for the period from Year Ended 31 December 2004 are included on
pages 5 to 8 of this announcement.
Dividend
At this stage in the development of Vista and in light of the results for the
year, we feel that that we should focus our resources on continuing to invest in
the business and the Directors will not therefore be recommending a dividend. It
is however our intention to adopt a progressive dividend policy in due course.
The Market
General opinion in the marketplace indicated that 2003 was a profitable year
with sales of entrance doors, French doors and patio doors increasing. Demand
was boosted by high levels of consumer confidence, continuing low interest rates
and the availability of ready credit, encouraging home owners to increase their
mortgages to fund home improvements. House price increases also encouraged
re-mortgaging on the enhanced values.
However, this trend did not continue in 2004 as demand reduced due to falling
customer confidence and higher interest rates.
The number of housing starts continues to be robust. The DTI's latest report on
the housing market released on 10 March 2005 states that private housing orders
in the year to January 2005 rose by 16% compared to those in the previous year.
However, orders in the three months to January 2005 fell by 3% compared with the
previous three months, but rose 8% compared with the same three months a year
earlier.
The reduction in demand for Vista's products is attributable to a change in the
type of housing being built. Following planning guidelines developed in response
to changing demographics, a higher proportion of flats are being built, hence
the number of entrance doors installed in new housing fell to a new low in 2003,
though the value of those installed increased.
Demand in the social housing sector is being encouraged by the UK Government's
"Decent Homes Initiative", which is a commitment to bring all council housing up
to a decent standard by 2010. This is likely to present future opportunities to
Vista. Indeed, I am pleased to confirm we have secured a substantial five year
contract (with an extend option for a further two years) with Connaught plc to
supply composite doors for the refurbishment of a portfolio of houses owned by
Wirral Borough Council.
Operating Review
2004 proved to be a challenging year for the business given the trading
environment and adverse events, such as being forced to suspend supplies to BHD
Group Limited on several occasions, with that company ultimately going into
receivership owing us in the region of #330,000, and as such the Directors feel
the performance for the year was satisfactory. Throughout the period margins
were also under pressure, which was not helped by retaining a large number of
staff whilst Vista waited for BHD to recover under the new owners. As a
consequence of these factors, profit before tax and earnings per share fell by
65.2% and 54.2% respectively compared to the 2003 pro forma figures. During the
year, we produced approximately 83,000 door panels compared with 77,000 in 2003,
whilst gross margins decreased to 33.9% from 35.8%.
Two large contracts from major customers, which were postponed from 2004, should
replace the original forecasted sales to BHD in the current year. The ongoing
discussions to secure further contracts with local councils should also result
in additional volumes and an improvement in the gross margin.
With composite doors offering increased durability, a higher level of security,
and lower maintenance costs, we believe that our customers will be increasingly
looking to order such products and we have invested in our production facilities
with the manufacture of four new tools to ensure that we are able to meet the
expected increase in demand.
Staff
I would like to take this opportunity on behalf of the Directors and
shareholders in thanking all of our employees and advisers for their hard work,
support and commitment, as without their contribution the results for the year
could not have been achieved.
Current Trading and Outlook
With the high street, house builders and the shed market being in a downturn the
Company is preparing for a challenging twelve months and hence is reducing its
cost base for 2005. The Company has already reduced the head count by 20 people
as a result of the BHD receivership.
Composite door sales have grown as the Company has secured contracts and
continues to enhance its reputation with the larger organisations in the social
housing market. This is encouraging as historically Vista has been mainly a
trade/retail supplier of components having only recently moved into this market.
A number of small rolling contracts have recently been won with Cruden
Construction, Hankinsons and HT Forest who supply to Bolton council.
Having come through a very difficult year we have reshaped the business to cope
with the competitive conditions. At the same time we have continued to invest in
the business to improve efficiency. We have an excellent range of products and
the management team is focused on producing an improved result in the current
year.
Gavin Johnson
Chairman
6 May 2005
VISTA GROUP PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
YEAR ENDED 31 DECEMBER 2004
2004 2003
7 weeks
# #
Turnover 7,845,381 864,309
Cost of sales (5,186,528) (583,823)
-------------- -------------
Gross Profit 2,658,853 280,486
Distribution costs (351,020) (40,860)
Administrative expenses (1,650,169) (215,545)
-------------- --------------
Operating profit pre exceptional item 657,664 24,081
Bad debt and other losses re BHD
administration (128,987) -
-------------- ---------------
-
Operating Profit 528,677 24,081
Interest receivable and similar income 2,807 2,605
Interest payable and similar charges (160,290) (18,124)
--------------- ---------------
Profit on ordinary activities before
taxation 371,194 8,562
Taxation on Profit on ordinary activities (27,633) (7,109)
-------------- ---------------
Profit retained for the financial year 343,561 1,453
-------------- --------------
Earnings per share 2.2p 0.02p
-------------- --------------
The Group has no recognised gains or losses other than the profit for the
current financial period. Accordingly a separate Statement of Total Recognised
Gains and Losses has not been prepared.
All of the group's activities have arisen from continuing operations.
VISTA GROUP PLC
CONSOLIDATED BALANCE SHEET
AT 31 DECEMBER 2004
2004 2003
# #
Fixed Assets
Goodwill 2,084,308 2,194,804
Tangible assets 510,781 533,748
----------- ---------------
2,595,089 2,728,552
Current Assets
Stock 497,667 507,208
Debtors 1,266,963 1,398,419
Cash at bank and in hand 54,263 151,337
-------------- -------------
1,818,893 2,056,964
Creditors: Amounts Falling Due Within One
Year (1,730,388) (2,054,594)
--------------- ---------------
Net Current Assets 88,505 2,370
--------------- ---------------
Total Assets Less Current Liabilities 2,683,594 2,730,922
Creditors: Amounts Falling Due After More
Than One Year (1,366,082) (1,756,971)
--------------- ---------------
Net Assets 1,317,512 973,951
--------------- ---------------
Capital and Reserves
Called up share capital 76,911 76,911
Share premium 895,587 895,587
Profit and loss account 345,014 1,453
--------------- ---------------
Equity Shareholder's Funds 1,317,512 973,951
--------------- ---------------
VISTA GROUP PLC
CONSOLIDATED CASHFLOW STATEMENT
YEAR ENDED 31 DECEMBER 2004
2004 2003
# #
Net Cash Flow From Operating Activities 649,870 (48,910)
Returns on Investments and Servicing of
Finance (157,483) (10,079)
Taxation (29,727) -
Capital Expenditure and Financial
Investment (131,774) (24,501)
Acquisitions - (3,391,751)
-------------- --------------
Cash Outflow Before Use of Liquid Resources
and Financing 330,886 (3,475,241)
Financing (428,932) 3,626,578
-------------- --------------
(Decrease)/Increase in Cash in the Period (98,046) 151,337
-------------- ---------------
Reconciliation of Net Cash Flow to Movement in Net Debt
2004 2003
# #
Net Debt at 1 January 2004 (2,159,878) -
(Decrease)/Increase in cash in the period (98,046) 151,337
Cash inflow from the new bank loans - (2,300,000)
Cash outflow in respect of hire purchase 33,287 1,442
Repayment of term loans 395,645 27,478
--------------- ---------------
(1,828,992) (2,119,743)
Non cash movements (60,317) (40,135)
--------------- ---------------
Net Debt at 31 December 2004 (1,889,309) (2,159,878)
--------------- --------------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER
2004
1. The preliminary results do not constitute full statutory accounts within the
meaning of Section 240 of the Companies Act 1985.
2. The preliminary results have been prepared in accordance with applicable
Accounting Standards and on the basis of the accounting policies, which have
remained unchanged since the Admission Document dated 24 November 2003.
3. A copy of the Annual Report and Accounts for the period ended 31 December
2004 will be sent to shareholders and copies will be available from the
Company's Registered Office at Unit H1, Prenton Way, North Cheshire Trading
Estate, Wirral, Merseyside, CH43 3DU.
4. The Annual General Meeting of the above Company will be held at Vista Group
plc, Unit H1, Prenton Way, North Cheshire Trading Estate, Wirral, Merseyside
CH43 3DU on 6 June 2005 at 9.00 am.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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