RNS Number:8637M
Waterline Group plc
29 November 2006
29 NOVEMBER 2006
WATERLINE GROUP PLC
(AIM: WTL)
INTERIM RESULTS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2006
The Board of Waterline Group PLC ('Waterline' or the 'Group'), one of the larger
suppliers to the fitted kitchen industry in the UK, is pleased to announce
interims results for the six months to 30 September 2006 - a period which saw
PBT increase by 44.8% and overall turnover by 15.6%.
FINANCIAL HIGHLIGHTS
* Overall Group turnover up 15.6% to #41.4m;
* Gross margin of 24.4% compared with 23.9% (like for like);
* Profit before tax up by 44.8% to #0.9m;
* EPS up to 3.80p from 2.22p;
* Net assets per share up by 10.7p to 59.7p per share;
* Board's continued intention to pursue a progressive dividend policy in
line with annual profit growth; and
* Current trading remains inline with expectations.
CORPORATE HIGHLIGHTS
* Acquisition of BDD Limited, the oldest distributor of Franke sinks and
taps in Scotland;
* Board anticipates broadening the Group's portfolio into the bathroom
sector in 2007;
* Coolectric and its "Liebherr" brand fully imbedded; and
* "Bluebook" 13, the industry reference book, launched in July 2006.
Waterline provides a one-stop shop for top high street kitchen brands, supplying
retailers and builders merchants. Additional services that Waterline provides to
its customers - such as training, product advice, stock management and logistics
- sets the Group apart from the more conventional distributors in the market.
Peter Dicks, Chairman of Waterline, commented today: "We anticipate broadening
our portfolio into the bathroom sector in 2007. At this stage of the year we are
confident of delivering full term results in line with market expectations."
Enquiries:
Waterline Group plc 0190 821 9759
Michael Lawrence, Chief Executive
Daniel Stewart & Co 020 7776 6550
Ruari McGirr
Bishopsgate Communications Ltd 020 7562 3350
Dominic Barretto
Nick Rome
www.bishopsgatecommunications.com
For more information: www.waterline.co.uk
CHIEF EXECUTIVE'S STATEMENT
The Board is delighted to deliver Waterline's interim results for the period to
30 September 2006, which are in line with expectations, and demonstrate
significant growth during the first half of the year.
The overall turnover of the Group in the period has increased by 15.6% to
#41.4m. The underlying turnover for the existing Group on flotation has grown to
#36.6m (2005: #35.0m) - representing an increase in the core business of 4.6%.
The turnover for Coolectric Limited for the six month period amounted to #4.7m.
The gross margin achieved during the six month period is 24.4% compared with
23.9% for the six month period ending 30 September 2005. Profit before tax has
increased by 44.8% to #0.9m, compared to #0.6m for the same period last year.
The basic earnings per share increased to 3.80p from 2.22p. The final dividend
of 2.75 pence per share for the year ending 31 March 2006 was announced on 29
September 2006 and will be paid on 5 December 2006. It is the Board of
Director's intention to pursue a progressive dividend policy in line with annual
profit growth.
The net assets per share increased by 10.7p to 59.7p per share (2005: 49p). Cash
flow generated #1.6m from operations. The key movements from the same period
last year are an increase in the operating profits of the Group by #0.3m offset
by currency translation differences of #0.13m and an increase in working capital
requirements for the Group of #1.3m. Overall the Group has achieved a net
increase of cash of #14,000. Net debt for the Group has marginally decreased to
#4.0m (2005: #4.2m).
The Board believes that the second half of the Group's financial year will
remain challenging in light of the recent interest rate increase. Moreover, our
business whilst not dependent on new-build does rely on a reasonably buoyant
property market. Our solid growth continues to come from products with higher
price points. The low-end and middle market products continue to be under price
and margin pressure.
In 2007, Waterline will once again be exhibiting throughout the country with our
Showcase Programme. The team's strategy is to meet as many trade customers as
possible over six weeks, in six venues through April and May. The Board would
welcome any shareholders wishing to visit us at our road show venues.
Furthermore our 2007 Customer Holiday Promotion period will now run from 1
September 2006 to 30 June 2007. Initial signs are that it has begun very
positively.
The Board would like to report that on 1 October 2006 we acquired the entire
share capital of Brian Donaldson Distribution Limited ("BDD Limited"). BDD
Limited is the oldest distributor of Franke sinks and taps in Scotland and this
acquisition adds bulk to the Group's operations in Scotland while providing a
solid barrier to entry by others. Plans for the integration of BDD Ltd. will be
realised in early 2007 and the Board looks forward to strengthening Waterline's
overall business in Scotland.
The Board anticipates broadening the Group's portfolio into the bathroom sector
in 2007. At this stage of the year the Board is confident of delivering full
year results in line with market expectations.
MICHAEL LAWRENCE
November 2006
WATERLINE GROUP PLC
Consolidated profit and loss account for the six months ended 30 September 2006
Six months Six months Year ended 31
ended 30 ended 30 March 2006
September 2006 September 2005
Notes Unaudited Unaudited Audited
# # #
Turnover 2 41,338,811 35,750,714 74,805,533
Cost of sales 31,244,599 27,188,015 57,221,026
----------- ----------- ----------
Gross profit 10,094,212 8,562,699 17,584,507
Distribution costs 3,261,907 2,426,027 4,881,113
Administrative expenses 5,598,064 5,188,335 10,716,013
----------- ----------- ----------
Operating profit 1,234,241 948,337 1,987,381
Other income 6,167 19,481 32,048
Interest payable and
similar charges (349,916) (352,631) (673,168)
----------- ----------- ----------
Profit on ordinary
activities before
taxation 2 890,492 615,187 1,346,261
Taxation on profit
from ordinary activities 392,522 350,357 714,663
----------- ----------- ----------
Retained profit for the
period 497,970 264,830 631,598
----------- ----------- ----------
Earnings per share
Basic (pence
per share) 3 3.80 2.22 2 5.05
Diluted (pence
per share) 3 3.74 2.18 4.99
WATERLINE GROUP PLC
Consolidated statement of total recognised gains and losses and reconciliation
of movements in shareholders' funds for the six months ended 30 September 2006
Statement Of Total Recognised Six months Six months Year ended 31
Gains and Losses ended 30 ended 30 March 2006
September 2006 September 2005
Unaudited Unaudited Audited
# # #
Profit for the period 497,970 264,830 631,598
Unrealised surplus on
revaluation of properties and
investments - - 405,670
Currency translation differences
on foreign currency net investments (84,014) 69,049 92,519
----------- ----------- -----------
Total recognised gains and
losses for the period 413,956 333,879 1,129,787
----------- ----------- -----------
Reconciliation of movements in Six months Six months Year ended 31
shareholders' funds ended 30 ended 30 March 2006
September 2006 September 2005
Unaudited Unaudited Audited
# # #
Profit for the period 497,970 264,830 631,598
Issue of shares - 2,000,000 2,000,000
Cost of share issue - (192,044) (192,044)
Share based payment - - 183,774
Other recognised
gains and losses (84,014) 69,049 498,189
----------- ----------- -----------
413,956 2,141,835 3,121,517
Opening shareholders' funds 7,413,217 4,291,700 4,291,700
----------- ----------- -----------
Closing shareholders' funds 7,827,173 6,433,535 7,413,217
----------- ----------- -----------
WATERLINE GROUP PLC
Consolidated balance sheet at 30 September 2006
Six months Six months Year ended 31
ended 30 ended 30 March 2006
September 2006 September 2005
Notes Unaudited Unaudited Audited
# # #
Fixed assets
Intangible assets 1,124,205 1,113,582 1,157,519
Tangible assets 6,982,744 6,384,679 6,955,359
Investments 25,519 21,980 18,707
----------- ----------- -----------
8,132,468 7,520,241 8,131,585
Current assets
Stocks 11,425,281 9,863,281 9,541,907
Debtors 13,109,020 11,897,583 13,246,264
Cash at bank
and in hand 155,649 1,566,389 405,637
----------- ----------- -----------
24,689,950 23,327,253 23,193,808
Creditors: amounts
falling due
within one year 22,001,214 21,420,730 21,249,959
----------- ----------- -----------
Net current assets 2,688,736 1,906,523 1,943,849
----------- ----------- -----------
Total assets less
current liabilities 10,821,204 9,426,764 10,075,434
Creditors: amounts
falling due
after one year (2,747,837) (2,924,229) (2,413,706)
Provision for
liabilities
and charges (246,194) (69,000) (248,511)
----------- ----------- -----------
7,827,173 6,433,535 7,413,217
----------- ----------- -----------
Capital and reserves
Called up
share capital 65,568 65,568 65,568
Share premium account 1,796,052 1,796,052 1,796,052
Revaluation reserve 495,926 90,256 495,926
Share option
reserve 183,774 - 183,774
Merger reserve 55,926 55,926 55,926
Profit and
loss account 5,229,927 4,425,733 4,815,971
----------- ----------- -----------
Shareholders' funds 7,827,173 6,433,535 7,413,217
----------- ----------- -----------
WATERLINE GROUP PLC
Consolidated cash flow statement for the six months ended 30 September 2006
Six months Six months Year ended 31
ended 30 ended 30 March 2006
September 2006 September 2005
Notes Unaudited Unaudited Audited
# # #
Net cash inflow from
operating activities 4 1,564,381 2,688,068 3,023,878
Returns on investments and
servicing of finance
Interest received 6,167 19,481 32,048
Interest paid (325,583) (334,820) (626,681)
Interest element of
finance lease
rental payments (24,333) (17,811) (46,487)
----------- ----------- -----------
Net cash outflow from
returns on investments
and servicing
of financing (343,749) (333,150) (641,120)
Taxation
UK corporation
tax paid (540,680) (91,481) (512,677)
Overseas tax
repaid/(paid) (63,696) 45,764 18,378
----------- ----------- -----------
(604,376) (45,717) (494,299)
Capital expenditure and
financial investment
Purchase of
tangible fixed
assets (319,373) (265,041) (540,478)
Sale of
tangible fixed
assets 125,882 85,869 146,601
----------- ----------- -----------
(193,491) (179,172) (393,877)
Acquisitions and disposals
Acquisition of
subsidiary - (880,000) (1,185,412)
Cash acquired
with
subsidiary - 443,737 443,737
----------- ----------- -----------
- (436,263) (741,675)
Cash inflow
before use of
liquid
resources and
financing 422,765 1,693,766 752,907
Financing
Issue of
ordinary
shares (net of
issue costs) - - 1,807,956 1,807,902
Bank loan
repayments (119,628) (157,950) (758,022)
Capital
element of
finance lease
rental
payments (289,026) (238,867) (510,203)
----------- ----------- -----------
(408,654) 1,411,139 539,677
----------- ----------- -----------
Increase in cash 5 14,111 3,104,905 1,292,584
----------- ----------- -----------
WATERLINE GROUP PLC
Notes forming part of the interim report for the six months ended 30 September
2006
1 Basis and preparation
The accounts for the group for the six months ended 30 September 2006, which are
unaudited, were approved by the board on 22 November 2006. The accounts have
been prepared in accordance with the accounting policies set out in the annual
financial statements for the year ended 31 March 2006.
The results contained in this report do not constitute statutory accounts as
defined in Section 240 of the Companies Act 1985. The financial information for
the full preceding year is based on the statutory accounts for the year ended 31
March 2006. Those accounts on which the auditors, BDO Stoy Hayward LLP, issued
an unqualified opinion have been delivered to the Registrar of Companies.
2 Segmental analysis
Analysis of Group's principal Six months Six months Year ended 31
activity by geographical market ended 30 ended 30 March 2006
September 2006 September 2005
Unaudited Unaudited Audited
# # #
Turnover
United Kingdom 38,580,258 32,921,002 69,010,726
United States
of America 2,758,553 2,829,712 5,794,807
----------- ----------- -----------
41,338,811 35,750,714 74,805,533
----------- ----------- -----------
Profit before tax
United Kingdom 727,290 415,376 1,030,834
United States of America 163,202 199,811 315,427
----------- ----------- -----------
890,492 615,187 1,346,261
----------- ----------- -----------
Net assets
United Kingdom 6,077,525 4,796,101 5,671,537
United States of America 1,749,648 1,637,434 1,741,680
----------- ----------- -----------
7,827,173 6,433,535 7,413,217
----------- ----------- -----------
3 Earnings per share
Six months Six months Year ended 31
ended 30 ended 30 March 2006
September 2006 September 2005
Unaudited Unaudited Audited
# # #
Numerator
Earnings used for
calculation of
basic and
diluted EPS 497,970 264,830 631,598
----------- ----------- -----------
Denominator
Weighted
average number
of shares used
in basic EPS 13,113,752 11,923,276 12,518,514
Weighted
average number
of share
options 185,792 230,456 145,131
----------- ----------- -----------
Weighted
average number
of shares used
in diluted EPS 13,299,544 12,153,732 12,663,645
----------- ----------- -----------
The weighted average number of shares used in the diluted earnings per share
calculation assumes the conversion of all dilutive potential ordinary shares,
being certain outstanding share options.
4 Reconciliation of operating profit to net cash inflow from operating
activities
Reconciliation of operating profit Six months Six months Year ended 31
to net cash inflow from operating ended 30 ended 30 March 2006
activities September 2006 September 2005
Unaudited Unaudited Audited
# # #
Operating profit 1,234,241 948,337 1,987,381
Depreciation 434,055 361,032 765,243
Amortisation 33,049 29,046 61,520
(Profit)/loss on sale of
fixed assets (29,154) 29,235 92,438
Currency translation differences (79,855) 47,104 77,525
Increase in stocks (1,883,374) (619,987) (298,613)
Decrease/(increase) in debtors 136,106 1,273,523 (39,284)
Increase in creditors 1,719,313 619,778 193,894
----------- ----------- -----------
1,564,381 2,688,068 2,840,104
Share-based payment charges - - 183,774
----------- ----------- -----------
Net cash inflow from
operating activities 1,564,381 2,688,068 3,023,878
----------- ----------- -----------
5 Reconciliation of net cash inflow to movement in net debt
Reconciliation of net cash inflow Six months Six months Year ended 31
to movement in net debt ended 30 ended 30 March 2006
September 2006 September 2005
Unaudited Unaudited Audited
# # #
Increase in cash in the period 14,111 3,104,905 1,292,584
Cash movements relating to debt 119,628 157,951 758,022
Capital element of finance lease
rentals 289,026 238,867 510,203
----------- ----------- -----------
Change in net debt resulting
from cash flows 422,765 3,501,722 2,560,809
New finance leases (250,678) (312,539) (732,423)
----------- ----------- -----------
Movement in net debt in the period 172,087 3,189,184 1,828,386
Opening net debt (4,174,041) (6,002,427) (6,002,427)
----------- ----------- -----------
Closing net debt (4,001,954) (2,813,243) (4,174,041)
----------- ----------- -----------
This information is provided by RNS
The company news service from the London Stock Exchange
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