Jourdan PLC - Final Results
RNS Number:8841I
Jourdan PLC
13 September 2006
Jourdan PLC
('Jourdan' or the 'Company')
Preliminary Announcement of results for the 12 months to 30 June 2006
Chairman's Statement
Financial Results
The year under review was encouraging. Whilst the difficult market conditions
reported in the first half continued to year end, the second half saw strong
growth in sales at Corby and Westfield which resulted in Group sales for the
second half increasing by 5% over the comparable period last year. With the
lower sales experienced during the first half (5% down on prior comparable
period), full year sales fell by only 1% to £23.2 million (2005: £23.3 million).
Operating profit before exceptional items and amortisation of goodwill was
£1,233,000 (2005: £804,000) while profit before tax, exceptional items,
amortisation of goodwill, movement in investment provisions and FRS 17 was
£957,000 (2005: £440,000).
Profit before tax was £872,000 (2005: loss of £341,000). Earnings per share for
the year was 18.1p (2005: loss per share of 10.9p).
The comparative figures for the year ended 30 June 2005 have been restated to
reflect the adoption of FRS 17.
I am pleased to announce that your Directors recommend a dividend of 5p per
share (2005: Nil) which it is proposed to pay on 10 November 2006 to members on
the register on 13 October 2006.
Operating Companies
Suncrest, the manufacturer of fireplace suites, mantelpieces and electric fires,
continued to suffer from weakness in all markets but took the opportunity to
improve manufacturing efficiencies during this period of reduced demand. The
absorption of the Corby trouser press manufacturing facility into the Suncrest
production facility at Peterlee proved highly successful and resulted in much
improved profitability for the combined Suncrest/Corby grouping despite lower
sales.
Corby, the internationally renowned manufacturer of trouser presses, enjoyed a
very substantial increase in sales and profits in the second half, enabling it
to report better sales and appreciably better profits than the prior year.
Corby's vacated long leasehold factory at Andover is being used by the sales,
marketing and administration departments prior to its disposal and their move to
smaller premises.
Westfield Medical, a leading manufacturer and supplier of single-use
sterilisation packaging material to the medical and healthcare industry,
achieved much better sales and profits in the second half of the year, resulting
in significantly improved sales and profits for the full year. Currently,
manufacture of Westfield products is running at all time record levels.
The Company announced on 11 September that Westfield Medical has acquired
Clinipak Limited for a total maximum consideration of £2.2m. Clinipak
specialises in the manufacture and distribution of products into the clinical
and medical markets and the Company believes that the acquisition will
complement the Westfield Medical business and will make a positive contribution
to group profitability in the current year.
Nelsons Labels, which manufactures and sells a variety of fabric-based labels
for mattresses, carpets and upholstery, had a disappointing year which was only
partly mitigated by the purchase of the assets of Chaplins, a small local
business. Sales and, to a much greater degree, profits fell. Although there
has been no improvement so far this financial year, the cost base has been
reduced to a more appropriate level for current sales volumes.
Principal risks and uncertainties
The Group faces a range of risks and uncertainties across the different
operating businesses, as well as at a Group level.
Suncrest and Corby share a number of common features and face similar
challenges. Production is now concentrated in Peterlee, and the challenge of
maintaining and improving production efficiencies continues. In common with the
majority of UK manufacturing businesses, we are now dealing with managing longer
and more complex supply chains as we seek to source greater proportions of our
raw material requirements from lower cost economies. Both Suncrest and Corby
are also in an environment where continued investment in product development is
essential if these businesses are to prosper, and operate with the risks and
benefits of a small number of large customers.
Nelsons is a niche producer in its chosen markets. The principal risks and
uncertainties relating to this business relate to the ongoing realignment of
production facilities amongst the major manufacturing groups (with consequent
changes in demand levels), together with varying levels of retail demand for the
end products of which Nelsons labels form a part.
Westfield currently faces different issues - after a difficult first half,
manufacturing is now running at record levels. Continuing to meet customer
expectations whilst maintaining margins and production efficiencies presents a
number of challenges, albeit ones that we are meeting. In the medium-term, the
funding allocated by Government to the various NHS Trusts, who form a key
element of Westfield's customer base, is integral to continued success.
At Group level, the principal uncertainty relates to the Group's defined benefit
pension fund, and in particular to the impact of future changes in actuarial
assumptions. As noted elsewhere in this statement, the Board is continuing to
review the Fund and developments in the pension area.
Key performance indicators
In managing the various operating companies, Group management regard turnover
(both order intake and goods despatched), gross margin and cash collected as the
key benchmarks of performance.
International Financial Reporting Standards
The Board is continuing to assess the likely impact of IFRS on its reported
results, and will report more fully on this matter in next year's financial
statements.
Group Pensions
The Fund currently has 25 active members whose contributions were increased to
9% from April 2006. Your Board will continue to review the Fund in the light of
current legislation under the Pensions Act 2004.
People
Our 286 employees have worked exceptionally hard to achieve these results in
difficult market conditions. Their skill and motivation is essential to
Jourdan's success, and we thank them all.
Capital restructuring
At an extraordinary general meeting held on 19 December 2005, a capital
reorganisation was implemented which resulted in a 1 for 10 share consolidation.
Where appropriate, comparative figures have been restated to reflect this.
Outlook
The financial position of the Group has improved markedly in the period under
review. Year end debt has reduced by £988,000 (26%) over the year to
£2,852,000, bringing about a considerable saving in interest. The Company's
ability to generate cash is enabling us to continue to repay debt, although
total indebtedness has increased since the year end as a result of the Clinipak
acquisition. In the current year, Westfield and Corby have continued to show
substantial growth in sales and profits, Nelsons is looking forward to a more
profitable year and Suncrest has an improving order trend, though this business
is dependent on a small number of very large customers. Jourdan's results for
the first two months of the current year give credibility to the Directors'
expectation of improved results for the full year.
J D Abell
13 September 2006
Group Profit Statement
Year ended 30 Year ended 30
June 2006 June 2005
Total
(restated)
£000s £000s
Turnover 23,187 23,321
Cost of sales (15,493) (16,029)
Gross profit 7,694 7,292
Net operating expenses (6,461) (6,764)
Amortisation of goodwill (301) (301)
(6,762) (7,065)
Operating profit 932 227
Provisions against investments 240 (160)
Profit on ordinary activities before interest 1,172 67
Net interest (300) (408)
Profit/(loss) on ordinary activities before 872 (341)
tax
Tax on profit/(loss) on ordinary activities (286) (15)
Profit/(loss) on ordinary activities after tax 586 (356)
Earnings/(loss) per share - basic 18.1p (10.9)p
- diluted 18.1p (10.8)p
Balance Sheet
30 June 30 June
2006 2005
(restated)
£000s £000s
Fixed assets
Intangible assets 4,190 4,491
Tangible assets 3,767 4,193
Investments 416 176
8,373 8,860
Current assets
Property held for resale 279 279
Stocks 2,920 2,763
Debtors 4,080 4,071
7,279 7,113
Creditors: amounts falling due
within one year (7,532) (8,430)
Net current liabilities (253) (1,317)
Total assets less current liabilities 8,120 7,543
Provisions for liabilities (206) (232)
Net assets excluding pension liability 7,914 7,311
Pension liability (2,236) (3,271)
Net assets including pension liability 5,678 4,040
Capital and reserves
Called up share capital 3,240 3,240
Other reserves 3,145 3,145
Profit and loss account (707) (2,345)
Equity shareholders' funds 5,678 4,040
Group Cash Flow Statement
Year ended 30 June 2006 Year ended 30 June 2005
£000s £000s £000s £000s
(restated)
Net cash inflow from operating activities 1,455 986
Returns on investment and servicing of
finance
Interest paid (229) (294)
Taxation paid (157) (209)
Capital expenditure and financial
investment
Purchase of tangible assets (97) (362)
Sale of tangible assets 16 4
(81) (358)
Acquisitions and disposals
Closure costs on termination of - (35)
discontinued operations
Equity dividends paid - -
Net cash inflow before financing 988 90
Financing
Purchase of own shares - (123)
Bank Loan (367) (366)
(367) (489)
Reduction/(increase) in net overdraft 621 (399)
Reconciliation of operating profit to net cash inflow from operating activities
Operating profit 932 227
Depreciation on tangible fixed assets 523 569
Other non cash movements (including 226 (200)
goodwill amortisation)
(Increase)/decrease in stocks (157) 72
(Increase)/decrease in debtors (70) 253
Increase in creditors 1 65
Net cash inflow from operating activities 1,455 986
Statement of Total Recognised Gains and Losses
Year ended Year ended
30 June 2006 30 June 2005
(restated)
£000s £000s
Profit/(loss) for the year 586 (356)
Actuarial gain/(loss) in respect of the defined benefit 1,052 (665)
scheme
Total recognised gains/(losses) relating to the year 1,638 (1,021)
Prior year adjustment (2,579)
Total gains and losses recognised since the last (941)
financial statements
Reconciliation of Movements in Shareholders' Funds
Profit/(loss) for the year 586 (356)
Purchase of own shares - (123)
Actuarial gain/(loss) in respect of the defined benefit 1,052 (665)
scheme
Dividends - -
Increase/(decrease) in shareholders' funds 1,638 (1,144)
Opening shareholders' funds (as restated) 4,040 5,184
Closing shareholders' funds 5,678 4,040
The opening shareholders funds at 1 July 2004 were previously reported as
£7,763,000 and have been adjusted to reflect FRS17 as a prior year adjustment.
Notes:
1 This statement has been prepared using accounting policies and
presentation consistent with those applied in the preparation of the statutory
accounts of the Group. These figures have been prepared in accordance with
applicable United Kingdom Accounting Standards, up to and including FRS 28, and
under the historical cost convention. The principal accounting policies remain
unchanged from the previous period, except for the adoption of FRS 17. The prior
year figures have been restated to reflect the adoption of this standard. The
adoption of the full recognition requirements of FRS 17 has resulted in a prior
year adjustment for the Group. Shareholders' funds have decreased by £2,575,000
at 1 July 2004 and by £3,127,000 at 30 June 2005 as a result. As at 30 June
2006, a net pension liability of £2,236,000 has been recognised. The impact on
the 2006 profit and loss account was a £24,000 reduction in profit before tax
(2005: £44,000 increase in loss before tax).
2 At an extraordinary general meeting held on 19 December 2005, an ordinary
resolution was passed whereby every 1,000 shares of 10 pence would be
consolidated into 1 new share of £100 each. Each consolidated share was then
subdivided into 100 new ordinary shares of 100 pence each. Basic earnings per
share has been calculated on the weighted average number of shares in issue
during the year of 3,240,000 and diluted earnings per share using 3,240,000. The
calculations in respect of 2005 have been restated to take account of the share
consolidation exercise undertaken in 2005 as if it had been undertaken as at 1
July 2004.
3 For the purpose of Section 240 of the Companies Act 1985 this announcement
constitutes non-statutory accounts. No statutory accounts dealing with the year
ended 30 June 2006 have been delivered to the Registrar of Companies nor been
reported on by the auditors. Statutory accounts for the year ended 30 June 2005
have been delivered to the Registrar of Companies and reported on by the
auditors, receiving an unqualified opinion.
4 Copies of the Annual Report will be sent to shareholders shortly and
copies will also be available from the registered office, Elm House, Elmer
Street North, Grantham, Lincolnshire NG31 6RE.
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