Interim Results
25 September 2003 - 9:02AM
UK Regulatory
RNS Number:1556Q
UCM Group PLC
25 September 2003
Embargoed until 07.00 25 September 2003
UCM Group PLC
Interim Results for the Six Months Ended 30 June 2003
UCM, the leading provider of speciality fused minerals, today announces its
interim results for the six months ended 30 June 2003.
Financial Highlights
Six Months Six Months
Ended Ended
# Millions 30 June 2003 30 June 2002
Turnover 16.45 17.62
Profit before tax - before exceptional items 1.16 1.85
Profit before tax - after exceptional items 0.81 1.85
Interim dividend 2.0p 2.5p
Key Highlights
* A disappointing half year with markets remaining difficult
* Delay in completing reorganisation and investment programme with
benefits not being seen until second half of 2003
* Good grounds for believing that, by the end of the year, margins should
have recovered from levels of the first six months of 2003
John Gordon, Chairman, said: "Whilst a disappointing period both for sales and
profits there are good grounds for believing that by the end of the year margins
should have recovered from the levels of the first six months of 2003.
"We can look forward to improved management effectiveness and further cost
savings with the completion of the strategic rationalisation programme before
the year end."
- Ends -
Enquiries
UCM Group PLC (On the day) 020 7067 0700
John Gordon, Chairman (Thereafter) 01785 223122
Bob Hughes, Chief Executive
Melvyn Fookes, Group Finance Director
Weber Shandwick Square Mile 020 7067 0700
Terry Garrett or Alex White or Rachel Taylor
UCM Group PLC
Interim Results for the Year Ended 30 June 2003
UCM, the leading provider of speciality fused minerals, today announces its
preliminary results for the year ended 30 June 2003.
Chairman's Statement
This has been a disappointing half year both for sales, where markets remain
difficult, and for profits, where the cost savings anticipated from the
reorganisation and investment programme have not yet been realised. Profit
before taxation for the six months ended 30th June 2003 amounted to #806,000 and
before exceptional costs was #1,157,000 (2002: #1,852,000) on turnover of
#16,446,000 (2002: #17,624,000). Fully diluted earnings per share for the period
were 2.3p (2002: 5.4p) after exceptional costs.
Dividends
The Directors have decided to restrict the interim dividend to 2.0p per share
(2002: 2.5p), which is within distributable earnings for the period. The
Directors believe it is prudent to stay within this criterion at the interim
stage.
Trading
Sales of magnesia products, principally for the domestic and industrial
appliance sector, have declined in the period. While the European and North
American markets remain difficult, sales into the Asian market from our plant in
the United States have fallen significantly and have not yet been replaced by
sales from our venture in China.
Sales of standard zirconia products, mainly for the steel industry, have
recovered from the depressed levels of the same period last year although
margins are not as good, partly owing to the delay in transferring the zirconia
finishing operation from Unitec Ceramics Limited to the United States.
Exceptional costs of #351,000 have been provided in the period relating to this
transfer.
Sales of advanced ceramic materials were only slightly below those of the first
half of 2002, with continuing sales growth in micronised monoclinic zirconia for
use in brake pads being offset by a fall in sales to the oxygen sensor sector.
Strategic Expansion
The major disappointment in the half year has been the delay in completing the
Group's strategic rationalisation programme. The venture in China for the
production of magnesia for the Asian market was expected to be selling in
commercial quantities in the period, but, partly owing to the outbreak of SARS
in China which prevented the direct involvement of staff from the United States,
this is only now beginning. Production difficulties in the United States have
delayed the transfer of zirconia finishing operations from the United Kingdom to
Universal America Inc., Tennessee. Action has been taken to improve management
effectiveness in these areas, but the cost savings anticipated from the
reorganisation will not now be available until well into the second half of this
year.
Outlook
Although there continues to be no sign of a significant upturn in the major
markets served by the Group, the production problems and costs associated with
the reorganisation of the Group's facilities are nearly at an end. There are
therefore good grounds for believing that, by the end of the year, margins
should have recovered from the levels of the first six months of 2003.
John Gordon
Chairman
24th September 2003
- Ends -
UCM Group PLC
Consolidated Profit and Loss Account
for the six months ended 30th June 2003
Unaudited Unaudited Audited
Six Months Six Months Year
Ended Ended Ended
30th June 2003 30th June 2002 31st December 2002
#'000s #'000s #'000s
Turnover
Continuing operations 16446 17624 33713
_______ _______ _______
Operating profit
Continuing operations
(including exceptional costs of
#351,000 - year ended 31 December
2002 #199,000) 1036 2052 3053
Net interest payable (230) (200) (435)
_______ _______ _______
Profit on ordinary activities
before taxation 806 1852 2618
Taxation (260) (557) (817)
_______ _______ _______
Profit on ordinary
activities after taxation 546 1295 1801
Dividends (479) (598) (1795)
_______ _______ _______
Retained profit 67 697 6
_______ _______ _______
Earnings per ordinary share
Basic and fully diluted 2.3p 5.4p 7.5p
_______ _______ _______
Before exceptional items
Basic and fully diluted 3.3p 5.4p 8.1p
_______ _______ _______
Earnings per share for the period have been calculated on profits after taxation
divided by 23931628 being the weighted average number of ordinary shares of 5p
each in issue during the period - (2002 half year and full year weighted average
23929307).
UCM Group PLC
Consolidated Balance Sheet
for the six months ended 30th June 2003
Unaudited Unaudited Audited
30th June 2003 30th June 2002 31st December 2002
#'000s #'000s #'000s
Fixed assets
Intangible assets 362 117 404
Tangible assets 17056 15757 17244
_______ _______ _______
17418 15874 17648
_______ _______ _______
Current assets
Stock 8423 8242 7768
Debtors 6878 8158 6942
Cash 269 768 145
_______ _______ _______
15570 17168 14855
Creditors
Amounts falling due within one year (13853) (12224) (12882)
_______ _______ _______
Net current assets 1717 4944 1973
_______ _______ _______
Total assets less current liabilities 19135 20818 19621
Creditors
Amounts falling due after more
than one year (1011) (1054) (1172)
Provisions for liabilities and charges (1664) (1744) (1767)
_______ _______ _______
Net assets 16460 18020 16682
_______ _______ _______
Share capital and reserves
Share capital 1196 1196 1196
Share premium 8402 8399 8399
Capital redemption reserve 218 218 218
Revaluation reserve 1757 1864 1802
Profit and loss account 4887 6343 5067
_______ _______ _______
Shareholders' funds
Equity 16460 18020 16682
_______ _______ _______
UCM Group PLC
Consolidated Cash Flow Statement
for the six months ended 30th June 2003
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
30th June 2003 30th June 2002 31st December 2002
#'000s #'000s #'000s
Net cash inflow from
operating activities 1548 1795 4784
_______ _______ _______
Returns on investments
and servicing of finance (235) (191) (425)
_______ _______ _______
Taxation (323) (383) (800)
_______ _______ _______
Capital expenditure (938) (1529) (4621)
_______ _______ _______
Equity dividends paid (1197) (1197) (1795)
_______ _______ _______
Cash outflow before
financing (1145) (1505) (2857)
_______ _______ _______
Financing
Issue of ordinary shares 3 - -
Repayment of amounts borrowed (146) (107) (231)
Short term borrowings 1199 758 1477
New Loans - 224 532
_______ _______ _______
1056 875 1778
_______ _______ _______
(Decrease) in cash in the period (89) (630) (1079)
_______ _______ _______
Reconciliation of Net Cash Flow to Movement in Net Debt
#'000s #'000s #'000s
(Decrease) in cash in the period (89) (630) (1079)
Net cash flow from (increase) in
bank loans due within one year (1199) (758) (1477)
Net cash flow from decrease in
other debt due within one year 146 107 231
Net cash flow from (increase) in
net debt due in more than one year - (224) (532)
_______ _______ _______
Change in net debt resulting from
cash flows (1142) (1505) (2857)
Currency translation adjustments 52 (19) 44
_______ _______ _______
Movement in net debt (1090) (1524) (2813)
Net debt at beginning of period (9146) (6333) (6333)
_______ _______ _______
Net debt at end of period (10236) (7857) (9146)
_______ _______ _______
UCM Group PLC
NOTES:
1. Basis of Preparation
The foregoing do not constitute statutory accounts within the meaning of Section
240 of the Companies Act 1985. The comparative figures for the year ended 31
December 2002 are based upon the audited accounts of the Group which have been
delivered to the Registrar of Companies and on which the auditors gave an
unqualified audit opinion and did not contain a statement under Section 237 (2)
or (3) of the Companies Act 1985.
The half year accounts are prepared on the basis of the accounting policies set
out in the most recent set of financial statements.
2. Segmental Analysis
Unaudited Unaudited Audited
Six months ended Six Months ended Year ended
30th June 2003 30th June 2002 31st December 2002
#'000s #'000s #'000s
Turnover by Destination
United Kingdom 1425 1682 2877
North America 4689 4943 9852
Continental Europe 6872 7221 13237
Asia 2786 3034 6311
Central & South America 274 296 560
Rest of World 400 448 876
_______ _______ _______
16446 17624 33713
_______ _______ _______
Turnover by Market
Domestic & Industrial Appliances 9259 10567 19759
Steelmaking 3098 3117 5894
Automotive 2543 2986 5830
Investment Casting 24 31 (61)
Engineered Ceramics 632 388 957
Other Industrials 890 535 1334
_______ _______ _______
16446 17624 33713
_______ _______ _______
3. Movement in Shareholders' Funds
Capital Profit & loss
Share Share redemption Revaluation account
capital premium reserve reserve Total
#'000s #'000s #'000s #'000s #'000s #000s
At the beginning of
the period 1196 8399 218 1802 5067 16682
Profit for the period - - - - 546 546
Interim dividend - - - - (479) (479)
Currency translation
adjustment - - - (10) (282) (292)
Transfer from revaluation
reserve - - - (35) 35 -
Issue of shares - 3 - - - 3
_______ _______ _______ _______ _______ ______
At end of period 1196 8402 218 1757 4887 16460
_______ _______ _______ _______ _______ ______
4. Dividends
The dividend charge for the period represents an interim dividend of 2.0p per
ordinary 5p share and will be payable on 16th October 2003 to those shareholders
listed on the register as at 3rd October 2003.
5. Taxation
Taxation has been provided at the estimated effective rate for the full year.
6. Distribution of interim results
Copies of the interim report will be posted to shareholders on Friday 3 October
2003 and will be available from the company's registered office at Doxey Road,
Stafford ST16 1DZ during normal business hours.
Independent review report by KPMG Audit Plc to UCM Group PLC
Introduction
We have been engaged by the company to review the financial information set out
on pages 3 to 7 and we have read the other information contained in the interim
report and considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.
This report is made solely to the company in accordance with the terms of our
engagement to assist the company in meeting the requirements of the Listing
Rules of the Financial Services Authority. Our review has been undertaken so
that we might state to the company those matters we are required to state to it
in this report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the company for
our review work, for this report, or for the conclusions we have reached.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules which require that the accounting policies and presentation applied to the
interim figures should be consistent with those applied in preparing the
preceding annual accounts except where they are to be changed in the next annual
accounts in which case any changes, and the reasons for them, are to be
disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/
4: Review of interim financial information issued by the Auditing Practices
Board for use in the United Kingdom. A review consists principally of making
enquiries of group management and applying analytical procedures to the
financial information and underlying financial data and, based thereon,
assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review is substantially less
in scope than an audit performed in accordance with Auditing Standards and
therefore provides a lower level of assurance than an audit. Accordingly we do
not express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2003.
KPMG Audit Plc
Chartered Accountants
Manchester
24th September 2003
This information is provided by RNS
The company news service from the London Stock Exchange
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