Jourdan PLC - Interim Results
RNS Number:4446S
Jourdan PLC
06 March 2007
Jourdan plc
('Jourdan' or the 'Company')
Interim Results for the 6 months ended 31 December 2006
CHAIRMAN'S STATEMENT
Results for the period under review are highly satisfactory. Turnover in the
six months to 31 December 2006 increased by 20% to £14.0m compared to the same
period last year. Profit before tax, amortisation of goodwill and profit/
provisions against investments increased by 76% to £859,000 (2005: £489,000).
Profit before tax rose by 161% to £883,000 (2005: £338,000) resulting in
earnings per share of 17.7p compared with 5.4p per share reported for the six
months to 31 December 2005.
The most important event that we announced on 11 September was the acquisition
by Westfield Medical Limited of Clinipak Limited, a medical packaging business
whose product range ideally complements that of Westfield. The interim results
to 31 December 2006 include the contribution from Clinipak since its acquisition
in September 2006. Westfield is now the largest and fastest growing business in
the Group in terms of both sales and profit.
During the period the Company shareholding in Howle Holdings plc was divested as
a result of the takeover of Howle Holdings by Elektron plc. This allowed a
release of the provision against the investment of £190,000 (2005: £240,000)
and released £300,000 in cash. Consequently, despite the acquisition of
Clinipak, net debt rose by only £1,190,000. Subsequent to the half year our
shareholding in Elektron plc has been sold for a small profit, realising a
further £313,000 of cash.
As last year, your Board has decided not to declare an interim dividend (2005:
nil) but will consider the declaration of a final dividend at the time of the
full year results to 30 June 2007.
Operating Companies
Westfield Medical, a leading manufacturer and supplier of single-use
sterilisation packaging materials to the medical and healthcare sector, achieved
significantly higher profits on much higher sales. In addition, Clinipak
achieved sales and profits substantially in excess of expectations at the time
of acquisition. Limited integration, particularly in the area of sales, is
being implemented but the increased product range of the two companies should
substantially strengthen the business.
Suncrest Surrounds, the fireplace, suites, mantels and electric fires business,
made a small profit on marginally increased sales, as our major High Street
customers are taking an increasing percentage of sales but at much lower margins
than those they are replacing. Experience since December suggests that most of
our High Street customers ended the year over-stocked, which has resulted in
significantly reduced sales in the first two months of the year. Regrettably,
although the worst of the percentage sales reduction is probably over, the
impact on current and future profitability remains severe.
John Corby, the internationally renowned trouser press manufacturer, achieved
marginally increased profits on significantly increased sales. Once again, the
pressure on margins both from High Street customers and increasingly from
international customers invoiced in local currencies is having a major impact.
Export sales accounted for 51% in the period and the biggest of these is our
distributor in Japan, where sterling has appreciated against the yen 10% in the
period, leading to extremely slim margins on this business.
Nelsons Labels, a leading supplier of fabric-based labels for the bedding,
carpet and upholstery industries, has once again been affected by the reduction
in activity on the UK High Street. Sales reduced but profitability improved as
a result of the cost reduction measures taken last year. The major market for
our products are the bed manufacturers, all of whom seem to be finding sales
currently challenging. There are no signs of any upturn in the near future and
further action may be necessary to bring costs more into line with projected
reduced sales levels.
Group Pensions
Like many final salary pension schemes, our Fund's investments diminished in
value over the two years ended April 2004, the date of the last actuarial
valuation. However, I am pleased to say that the subsequent rise in world stock
markets is increasing the value of the investments and reducing the deficit.
Outlook
While trading conditions were benign in the first six months, those businesses
directly dependent on the High Street, in particular Suncrest, have suffered a
substantial deterioration in sales and margins in the first two months of the
year. Corby and Nelsons have suffered to a lesser extent, but there appears to
be no sign of any upturn. The performance of the medical packaging business
continues to be highly satisfactory and a record year is anticipated.
The future is more difficult than usual to predict but unless there is a major
change in trading conditions, profits for the second half are unlikely to
achieve the same level as last year.
J David Abell
6 March 2007
Group Profit Statement
Unaudited Audited
Notes 6 months to 6 months to Year ended
31 December 31 December 30 June
2006 2005 2006
£000s £000s £000s
Turnover
Continuing operation 12,691 11,689 23,187
Acquisition 1,331 - -
14,022 11,689 23,187
Cost of sales (9,423) (7,821) (15,493)
Gross profit 4,599 3,868 7,694
Net operating expenses (3,611) (3,223) (6,461)
Amortisation of goodwill (166) (151) (301)
(3,777) (3,374) (6,762)
Operating profit
Continuing operation 689 494 932
Acquisition 133 - -
822 494 932
Profit on sale of investment 190 - -
Release of provisions against
investments - - 240
Profit on ordinary activities
before interest 1,012 494 1,172
Net interest (129) (156) (300)
Profit on ordinary activities
before tax 883 338 872
Tax on profit on ordinary
activities 3 (309) (163) (286)
Profit on ordinary activities
after tax retained 574 175 586
Earnings per share 5
- Basic 17.7p 5.4p 18.1p
- Diluted 17.7p 5.4p 18.1p
Group Balance Sheet
Unaudited Audited
At At At
Notes 31 December 31 December 30 June
2006 2005 2006
(restated)
£000s £000s £000s
Fixed assets
Intangible assets 2 4,935 4,340 4,190
Tangible assets 3,615 3,950 3,767
Investments - 176 416
8,550 8,466 8,373
Current assets
Property held for resale 279 279 279
Stock 3,257 2,531 2,920
Debtors 5,274 4,244 4,080
Investments 306 - -
9,116 7,054 7,279
Creditors : amounts falling due
within one year (9,114) (7,799) (7,532)
Net current liabilities 2 (745) (253)
Total assets less current
liabilities 8,552 7,721 8,120
Provisions for liabilities and
charges (206) (220) (206)
Net assets excluding pension
liability 8,346 7,501 7,914
Pension liability (2,236) (3,286) (2,236)
Net assets including pension
liability 6,110 4,215 5,678
Capital and reserves
Called up share capital 3,240 3,240 3,240
Other reserves 3,145 3,145 3,145
Profit and loss account (275) (2,170) (707)
Equity shareholders' funds 6,110 4,215 5,678
Group Cash Flow Statement
Unaudited Audited
6 months to 6 months to Year ended
31 December 31 December 30 June
2006 2005 2006
£000s £000s £000s
Net cash inflow from operating activities 623 397 1,455
Return on investments and servicing of
finance
Net interest paid (129) (120) (229)
Taxation (paid)/received (124) 14 (157)
Capital expenditure and financial investment
Purchase of tangible assets (51) (20) (97)
Sale of tangible assets - - 16
319 271 988
Acquisitions and disposals
Acquisition of subsidiary undertaking
(excluding cash acquired of £779,000) (1,647) - -
Sale of Investments 300 - -
Equity dividends paid (162) - -
Net cash (outflow)/inflow before financing (1,190) 271 988
Financing
Repayment of Bank Loan - - (367)
Net cash outlow from financing - - (367)
(Increase)/reduction in net overdraft (1,190) 271 621
(Decrease)/increase in net cash in the
period (1,190) 271 621
Repayment of Bank Loan - - 367
Movement in net debt in the period (1,190) 271 988
Opening net debt (2,852) (3,840) (3,840)
Closing net debt (4,042) (3,569) (2,852)
Statement of Total Recognised Gains and Losses
Unaudited Audited
6 months to 6 months to Year ended
31 December 31 December 30 June
2006 2005 2006
(restated)
£000s £000s £000s
Profit for the period 574 175 586
Actuarial gain in respect of the defined
benefit scheme - - 1,052
Total recognised gains relating to the
period 574 175 1,638
Prior year adjustment (FRS17) - - (2,579)
Total gains and losses recognised since
the last financial statements 574 175 (941)
Reconciliation of Movement in Shareholders' Funds
Unaudited Audited
6 months to 6 months to Year ended
31 December 31 December 30 June
2006 2005 2006
(restated)
£000s £000s £000s
Profit for the period 574 175 586
Dividend (162) - -
Actuarial gain in respect of the defined
benefit scheme - - 1,052
Credit relating to issue of share options 20 - -
Increase in shareholders' funds 432 175 1,638
Opening shareholders' funds 5,678 4,040 4,040
Closing shareholders' funds 6,110 4,215 5,678
Opening shareholders funds for the six months to 31 December 2005 has been
restated by a reduction of £63,000 in respect of deferred tax adjustments on
adoption of FRS17.
Note to Warrantholders
All outstanding warrants to subscribe for ordinary shares which had not been
exercised prior to 26 October 2006 have now expired.
Notes
1. The interim financial statements were approved by a
Committee of the Board of Directors on 21 February 2007. The statements, which
are unaudited, have been prepared on the basis of the accounting policies
published in the statutory accounts for the year ended 30 June 2006 except for
the application of FRS20, relating to share based payments. This accounting
standard is effective from 1 July 2006 and has no material financial impact on
the interim financial statements. The financial information set out in this
interim report does not constitute statutory accounts as defined in Section 240
of the Companies Act 1985. The figures for the year ended 30 June 2006 have been
extracted from the statutory financial statements which have been filed with the
Registrar of Companies. The Auditors' Report on those financial statements was
unqualified and did not contain a statement under Section 237(2) of the
Companies Act 1985.
2. During the period the Group acquired 100% of the issued
share capital of Clinipak Limited. Goodwill arising of £911,000 was calculated
as follows:
£000's
Provisional fair value of assets acquired 1,515
Consideration 2,426
Goodwill 911
The results of Clinipak Limited from the date of acquisition have been shown
separately on the face of the profit and loss account.
3. The estimated tax charge is based on a corporation tax rate
of 30.0% except in respect of tax on investment disposal proceeds, where no tax
is expected to be payable.
4. The Directors do not recommend the payment of an interim
dividend.
5. Basic earnings per share has been calculated on the
weighted average number of shares in issue during the period of 3,240,002 shares
of £1 (six months to December 2005: 3,240,000 shares of £1) and diluted earnings
per share using 3,249,140 shares of £1 (six months to 31 December 2005:
3,240,000 shares of £1).
6. Copies of this report have been sent to shareholders.
Copies are also available to members of the public from the Company's registered
office: Elm House, Elmer Street North, Grantham, Lincolnshire NG31 6RE.
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