RNS Number:8874P
Huntleigh Technology PLC
17 September 2003
17 September 2003
Huntleigh Technology plc
Interim Results - Replacement
The following replaces the announcement released on 17 September 2003 at 07.11
under RNS number 8458P.
Please be advised that the dividend payment date will be 4 November 2003 and not
3 November 2003 as previously stated.
All other details remain unchanged and the full amended text appears below.
HUNTLEIGH TECHNOLOGY PLC
Interim Results for the six months ended 30 June 2003
Highlights of First Half Year 2003
* Turnover #90.9m (2002 = #91.9m)
* Rental income up 15% to #20.3m
* Gross margin up 1.5% to 54.8%
* Pre-tax profit #11.4m (2002 = #13.8m)
* EPS 9.16 pence per share (2002 = 11.31 pence)
* Gearing unchanged at 26%
* Interim Dividend up 3.8% to 2.7 pence per share
* Benefits of increased NHS spending yet to filter through
* Outlook more positive for Second Half Year 2003
Luton, United Kingdom, 17 September 2003: Huntleigh Technology, a world leader
in moving, handling and monitoring of patients, announced encouraging results
for the first six months of 2003, despite challenging market conditions.
Huntleigh Technology PLC
Interim Report 2003
CHAIRMAN'S STATEMENT 2003
The first half of 2003 has been overshadowed by the sad death of the co-founder
and former Chairman of Huntleigh Technology PLC, Rolf Schild, whose energy,
drive and wisdom contributed so much to the development of the Group. Trading
during the period has been subdued with reported turnover declining slightly by
1% to #90.9 million (2002: #91.9 million). On a more positive note, rental
income showed an increase of 15% to #20.3 million derived from products designed
and manufactured by the Group. This has the effect of increasing both gross
margins and operating expenses. Outright sales of Group product were #3.7
million lower than during the corresponding period in 2002 as a consequence of
weaker export markets and a shift towards rentals in the United Kingdom.
Pre tax profit for the six months was #11.4 million (2002: #13.8 million), a
decrease of 18%. Earnings per share fell by 19% to 9.16 pence per share (2002:
11.31 pence per share). Gross margin improved by 1.5% to 54.8% reflecting the
increasing proportion of rental turnover. However, this benefit was eroded by an
increase of 9% in distribution and administrative overheads as additional
expenditure was applied to supporting the expanding rental business. We
continue to review opportunities for improving efficiencies within the rental
operation and reducing overheads as a percentage of turnover.
Total Group borrowings at 30 June 2003 stood at #19.1 million (2002: #17.1
million). Net gearing was in line with June 2002 at 26%. During the second half
of 2003 the Group expects to dispose of two surplus freehold properties thereby
lowering debt by approximately #1.2 million. In addition a stock reduction
exercise has commenced with a view to reducing working capital used within the
business. Interest cover for the period was a healthy 19 times (2002: 26
times).
The directors are declaring a 3.8% increase in the interim dividend to 2.7 pence
per share (2002: 2.6 pence) payable on 4 November 2003 to shareholders listed on
the register on 3 October 2003.
The Board has appointed two new Directors since the half year. Dominic
Hollamby, Global Head of N M Rothschild's healthcare activities, joined as a
non-executive director on 1 July. Craig Smith replaced me as Group Finance
Director on 25 August. I am confident that these new appointments will prove
invaluable to the future development and growth of the company.
In April 2003 Huntleigh Diagnostics was granted the Queen's Award for Innovation
for the development of the Assist range of hand-held monitors. This is the
second such award received by the company.
Review of operations
United Kingdom
Turnover #41.0 million (2002: #40.3 million), a 2% increase.
Whilst the backdrop in the United Kingdom has been challenging, rental turnover
increased by 12% reflecting the increasing move to long-term bed and specialised
mattress replacement projects. During the first half Huntleigh was awarded
tenders to the total value of #12 million spread over a period of 5 to 15 years.
We expect to announce further project wins during the second half of the year.
So much has recently been written concerning the NHS that the current market
dynamics are well understood. The majority of the additional funds made
available by central government have been absorbed by wage increases and
additional staff. Equipment budgets have, in general, remained tight. A recent
Audit Commission report commented that more than half of the Trusts in England
had been diverting money away from future projects - such as buying new medical
equipment - in favour of short term measures to keep services going and waiting
lists down. Consequently, the use of Private Finance Initiative funding and
rental is expected to increase. The lack of traditional March spend this year,
at the end of the public sector financial year, is likely to result in a more
even distribution of sales in 2003.
The autumn will see the launch of a complete new range of pressure relieving
mattresses. With patented features, these models will maintain and enhance
Huntleigh's position as the leading developer and manufacturer of portable
systems for the prevention and treatment of pressure ulcers. Whilst Huntleigh is
well known for its hospital products, increasing attention is being paid to the
growing community sector. The NAIDEX exhibition, held at Birmingham in May,
which focuses on aids for daily living saw the launch of several new products
including the unique Highlite (R) portable gantry hoist which will give greater
independence to disabled people.
Europe
Turnover #20.1 million (2002: #18.2 million), a 10% increase.
At constant exchange rates turnover grew by 2%. The Group's European
subsidiaries generally performed well with rentals being particularly strong
contributing to an increase in Euro turnover of 7%. However export sales to
countries where the Group does not have subsidiary undertakings were below last
year.
As in other markets, hospital bed tenders are taking longer to come to fruition.
This phasing issue makes it increasingly difficult to predict exactly when
orders will actually be delivered. However, current expectations are that the
second half should see an increase in European sales.
United States
Turnover #20.2 million (2002: #22.3 million), a 9% decrease.
At constant exchange rates turnover grew by 2%. The first half of 2002 included
a large single order from the nursing home sector. Eliminating this distortion
to comparative figures, sales were 7% above 2002 in Dollar terms.
Progress continues to be made in the DVT and pressure area care arenas with
additional contract wins promising growth during the remainder of the year.
Rest of the World
Turnover # 9.5 million (2002: #11.1 million), a 14% decrease.
The outbreak of war, as anticipated, led to a considerable reduction in orders
from our traditional Middle Eastern markets. The SARS virus affected demand in
the Far East. These two effects in particular depressed business in this
geographical area.
The exception was Australia which proved to be a strong market for the Group
during the first half and appears likely to sustain this performance during the
remainder of the year.
Outlook
The first two months of the second half have seen an improvement in performance
over the corresponding period in 2002. Activity levels, particularly in the
export markets, have improved. It is likely that sales and profitability for
the year as a whole will be more evenly spread than last year, with less of a
bias towards the first half. Accordingly, I anticipate a satisfactory outcome
for 2003.
Julian Schild MA ACA
Chairman
17 September 2003
(Unaudited) (Unaudited) (Audited)
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2003 2002 2002
#000 #000 #000
Turnover (note 2) 90,901 91,910 176,416
Cost of sales 41,061 42,902 82,959
Gross profit 49,840 49,008 93,457
Net operating expenses 37,725 34,677 70,677
Operating profit 12,115 14,331 22,780
Share of operating loss of joint venture (117) - -
Profit on ordinary activities before 11,998 14,331 22,780
interest
Net interest payable 638 550 1,110
Profit on ordinary activities before taxation 11,360 13,781 21,670
Taxation 3,578 4,169
6,823
Profit on ordinary activities after 7,782 9,612 14,847
taxation
Dividends paid and proposed 2,294 2,208 4,841
Amount transferred to reserves 5,488 7,404 10,006
Basic earnings per share
On profit for the financial period 9.16p 11.31p 17.47p
On profit for the financial period 9.31p 11.54p 18.16p
excluding goodwill amortisation
Diluted earnings per share
On profit for the financial period 9.15p 11.30p 17.46p
9.30p 11.53p 18.14p
On profit for the financial period
excluding goodwill amortisation
Dividend per share 2.70p 2.60p 5.70p
(Unaudited) (Unaudited) (Audited)
30 June 30 June 31 December
2003 2002 2002
#000 #000 #000
Fixed assets
Intangible assets 4,557 4,598 4,685
Tangible assets 47,318 42,879 43,634
Investments
- joint venture 133 - 250
- other investments 1,168 1,028 1,166
53,176 48,505 49,735
Current assets
Stocks 24,754 21,164 22,389
Debtors 50,812 49,693 49,480
Cash at bank and in hand 27,265 15,036 20,553
102,831 85,893 92,422
Creditors: amounts falling due within one year 58,424 51,265 52,012
Net current assets 44,407 34,628 40,410
Total assets less current liabilities 97,583 83,133 90,145
Creditors: amounts falling due after 22,923 16,678 21,568
more than one year
Net assets employed 74,660 66,455 68,577
Capital and reserves
Called up share capital 4,265 4,265 4,265
Share premium account 7,184 7,184 7,184
Other reserves 227 227 227
Profit and loss account 62,984 54,779 56,901
Equity shareholders' funds 74,660 66,455 68,577
(Unaudited) (Unaudited) (Audited)
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2003 2002 2002
#000 #000 #000
Operating profit 12,115 14,331 22,780
Depreciation and amortisation 6,567 6,261 12,348
Working capital (3,638) (8,756) (7,374)
Net cash inflow from operating activities 15,044 11,836 27,754
Net capital expenditure and financial investment (9,722) (10,015) (17,216)
Operating cash flow 5,322 1,821 10,538
Interest (638) (550) (1,110)
Tax paid (4,833) (3,633) (8,161)
Acquisitions and disposals - (1,534) (2,218)
Dividends paid - - (4,582)
Net cash flow before financing (149) (3,896) (5,533)
Net cash flow from financing 947 (663) 4,612
Increase/(Decrease) in cash 798 (4,559) (921)
1. Financial statements
The financial statements set out above do not comprise statutory accounts for
the purpose of Section 240 of the Companies Act 1985. Statutory accounts for the
year ended 31 December 2002 on which the auditors of the Group made an
unqualified report, have been delivered to the Registrar of Companies.
2. Turnover
Six months Six months
ended ended
30 June 30 June
2003 2002
#000 #000
Turnover: Group and joint ventures 91,102 91,910
Less: share of joint venture turnover (201) -
Group turnover 90,901 91,910
Turnover by product source:
Six months Six months
ended ended
30 June 30 June
2003 2002
#000 #000
Own design/manufacture 84,584 83,708
Third party factored goods 6,317 8,202
Group turnover 90,901 91,910
Geographic analysis of turnover:
2003 2002 %
#000 #000 change
United Kingdom 41,044 40,307 2%
Europe 20,129 18,230 10%
United States of America 20,204 22,254 (9%)
Rest of the World 9,524 11,119 (14%)
Group turnover 90,901 91,910 (1%)
3. Earnings per share
Earnings per share are calculated on the profit on ordinary activities after
taxation of #7,782,000 (2002 six months: #9,612,000; 2002 twelve months:
#14,847,000) attributable to shareholders and on 84,978,648 ordinary shares
being the weighted average number in issue during the period.
The 2002 calculations are based on 84,957,130 shares (interim) and 84,967,601
shares (final) being the weighted average number in issue during these periods.
4. Analysis of net debt
Audited Foreign Unaudited
31 December Arising on exchange 30 June
2002 Cash flow effect 2003
#000 #000 #000 #000
Cash 20,553 6,624 88 27,265
Overdrafts (17,564) (5,826) - (23,390)
Net cash 2,989 798 88 3,875
Loans due after one year (21,567) (964) (391) (22,922)
Loans due within one year (31) 17 - (14)
Total loans (21,598) (947) (391) (22,936)
Total net debt (18,609) (149) (303) (19,061)
This information is provided by RNS
The company news service from the London Stock Exchange
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