Provend Group PLC - Interim Results
08 Mars 1999 - 8:57AM
UK Regulatory
RNS No 6865n
PROVEND GROUP PLC
8th March 1999
"PROVEND GROUP PLC
ANNOUNCEMENT OF INTERIM RESULTS
FOR THE SIX MONTHS ENDED 27 DECEMBER 1998
Provend Group PLC ("Provend"), one of the UK's largest independent vending
companies and also one of the largest suppliers of ingredients and catering
supplies to the vending market, announces its interims results for the six
months ended 27 December 1998.
- Turnover up 6 per cent. at #33.1m (1997: #31.2m)
- Operating profit up 21 per cent. at #1.7m (1997: #1.4m)
- New orders worth over #2.0m won from major retailer in August
- Interim dividend of 2.0p per share (1997: 1.25p)
Chairman, Michael Borlenghi commented:
"The strong machine sales order book together with out national operations in
both vending services and wholesale distribution provides a firm base for
continued development."
For further information contact:
Rufus Bond Gunning
Managing Director
Provend Group PLC
Tel: 0181 998 2828
Richard Williams
Finance Director
Provend Group PLC
Tel: 0181 998 2828
PROVEND GROUP PLC
INTERIM RESULTS
FOR THE SIX MONTHS ENDED 27 DECEMBER 1998
CHAIRMAN'S STATEMENT
Results and dividend
I am delighted to report that the Group improved results for the six months
ended 27 December 1998, compared to the same period last year. Turnover
increased 6 per cent. to #33.1 million (1997: #31.2 million), whilst operating
profits grew by 21 per cent. to #1.7 million (1997: #1.4 million). Interest
charges rose to #109,000 (1997: #98,000) reflecting, in part, payment of
deferred consideration related to prior year acquisitions.
Earnings per share of 6.1p (1997: 5.5p) is based on an effective tax rate of
33 per cent. (1997: 25 per cent.).
Net borrowings of #1.8 million (1997: #1.1 million) remain comfortably within
our overdraft facility, having paid a final dividend of #0.6 million, deferred
consideration of #0.7 million and #0.2 million initial consideration for the
acquisition of Catering and Vending Supplies Limited, a disposable supplies
company located in the North East.
The Board has pleasure in declaring an interim dividend of 2.0p per share
(1997: 1.25p) which will be paid on 15 April 1999 to shareholders on the
register as at the close of business on 19 March 1999. The Board reaffirms
its progressive dividend policy.
Operations
Both vending and wholesale distribution activities expanded sales and profits
in the first half of this financial year. This has been achieved through
organic growth, careful attention to costs and the strategic acquisition of an
in-fill business.
Additional cost savings have been achieved by transferring the trade of
Norvale Perry Limited into Malcolm Varle Limited and Thames Region/City
Vending into Provend Services Limited. The southern vending business of City
Vending has also been fully integrated into Provend Services Limited;
exceptional costs have been eliminated. Machine sales for the first half were
well over plan as were machine orders. The level of orders for new machines
underpins the sale of machines for the second half of the current year.
The vending market continues to be highly competitive. However, improvements
which we have implemented in our cost base have ensured that our net operating
margins have been improved.
Our wholesale distribution business, which accounts for some #12.0 million of
our #33.1 million turnover and is the fourth largest in the industry sector,
continues to perform well and has increased its sales by 8 per cent. in the
first half of the year by organic growth and a strategic acquisition.
Outlook
The strong machine sales book together with our national operations in both
vending services and wholesale distribution provides a firm base for continued
development.
M J C Borlenghi
8 March 1999
Consolidated profit and loss account for the six months ended 27 December 1998
Unaudited Unaudited
six months six months Audited
ended ended year ended
27 December 28 December 28 June
1998 1997 1998
#'000 #'000 #'000
Turnover
Continuing operations 32,766 31,169 62,462
Acquisitions 310 - -
------ ------ ------
Total Turnover 33,076 31,169 62,462
====== ====== ======
Operating profit before exceptional
items
Continuing operations 1,660 1,364 3,075
Acquisitions 28 - -
------ ------ ------
Total operating profit before
exceptional items 1,688 1,364 3,075
====== ====== ======
Operating profit
Continuing operations 1,660 1,364 2,807
Acquisitions 28 - -
------ ------ ------
Total operating profit 1,688 1,364 2,807
Interest payable and similar charges
Interest payable (109) (98) (196)
------- ------ ------
Profit on ordinary activities
before taxation 1,579 1,266 2,611
Taxation on profit on ordinary
activities (519) (321) (606)
------- ------ ------
Profit on ordinary activities
after taxation 1,060 945 2,005
Dividends (346) (216) (778)
------- ------ ------
Retained profit 714 729 1,227
======= ====== ======
Earnings per ordinary share 6.1p 5.5p 11.6p
------- ------ ------
The Group has no recognised gains and losses other than those included in the
profits above and therefore no separate statement of total recognised gains
and losses has been presented.
On 10 September 1998 the Group acquired the entire issued share capital of
Catering and Vending Supplies Limited.
Consolidated balance sheet
Unaudited Unaudited
six months six months Audited
as at as at year as at
27 December 28 December 28 June
1998 1997 1998
as restated as restated
#'000 #'000 #'000
Fixed Assets
Intangible assets 254 - -
Tangible assets 2,581 2,059 2,242
-------- -------- --------
2,835 2,059 2,242
-------- -------- --------
Current assets
Stock 4,192 4,528 4,296
Debtors 12,431 10,191 10,535
Cash at bank and in hand 705 765 1,506
-------- -------- --------
17,328 15,484 16,337
-------- -------- --------
Creditors: amounts falling due
within one year
Borrowings (2,467) (1,881) (1,122)
Other creditors (15,465) (14,952) (16,168)
-------- -------- --------
(17,932) (16,833) (17,290)
Net current liabilities (604) (1,349) (953)
-------- -------- --------
Total assets less current
liabilities 2,231 710 1,289
Creditors: amounts falling due
after more than one year (634) (213) (406)
-------- -------- --------
Net assets 1,597 497 883
======== ======== ========
Capital and reserves
Called up share capital 173 173 173
Share premium account 8,106 8,106 8,106
Profit and loss account (6,682) (7,782) (7,396)
-------- -------- --------
Total equity shareholders' funds 1,597 497 883
======== ======== ========
Consolidated cashflow statement
Unaudited Unaudited
six months six months Audited
ended ended year ended
27 December 28 December 28 June
1998 1997 1998
#'000 #'000 #'000
Net cash (outflow)/inflow from
operating activities (188) (77) 2,836
------- ------- -------
Returns on investments and servicing
of finance
Interest paid (80) (82) (160)
Interest element on finance lease
rentals (32) (18) (36)
Interest received 3 2 -
------- ------- -------
Net cash outflow from returns
on investment and servicing of
finance (109) (98) (196)
------- ------- -------
Taxation
Corporation tax paid (35) - (462)
------- ------- -------
Capital expenditure
Purchase of tangible fixed assets (446) (637) (991)
Sale of tangible fixed assets 119 97 90
------- ------- -------
Net cash outflow for capital
expenditure (327) (540) (901)
------- ------- -------
Acquisitions and disposals
Deferred consideration on prior
year acquisition (717) (1,016) (1,216)
Purchase of subsidiary undertakings (199) (13) (26)
Net cash acquired with subsidiary 138 - -
------- ------- -------
Net cash outflow for acquisition
and disposals (778) (1,029) (1,242)
Equity dividend paid to shareholders (562) (518) (734)
------- ------- -------
Management of liquid resources
Deferred consideration placed in
escrow accounts (50) - -
------- ------- -------
Financing
Finance lease repayments (97) (41) (104)
------- ------- -------
Increase in cash (2,146) (2,303) (803)
======= ======= =======
Notes to the Financial Statements
1. Status of Financial Information
The results for the six months ended 27 December 1998 and the comparative
figures for the six months ended 28 December 1997 are unaudited. The interim
report has been prepared on the basis of accounting policies set out in the
1998 Annual Report and Accounts except that FRS 10 "Goodwill and Intangible
Assets" and FRS 14 "Earnings per share" have now been adopted.
FRS 10 has been adopted for all acquisitions after 29 June 1998. Goodwill
written off to reserves prior to this adoption has not been restated.
In accordance with the requirements of FRS 10, the Goodwill reserve of
#9,547,000 as at 28 December 1997 and #9,477,000 at 28 June 1998 has been
eliminated against the Other reserve of #1,234,000, with the balance taken to
the Profit and Loss account.
The financial information contained in this interim statement does not
constitute statutory accounts as defined in section 240 of the Companies Act
1985. The comparative figures for the year ended 28 June 1998 are extracted
from the full published financial statements of Provend Group PLC. Those
financial statements have been reported on by the company's auditors and
delivered to the Registrar of Companies. The report of the auditors was
unqualified and did not contain a statement under section 237(2) or 237(3) of
the Companies Act 1985.
2. Dividends
The interim dividend of 2.0p (net) per ordinary share will be paid on 15 April
1999 to shareholders on the register at close of business on 19 March 1999.
3. Taxation
The taxation charge is based on the estimated effective tax rate for the full
year.
4. Reconciliation of movement in shareholders' funds
#'000
At 29 June 1998 883
Retained profit for the period 714
------
At 28 December 1998 1,597
======
5. Earnings per share
Earnings per share is based on profit on ordinary activities after taxation
divided by the average number of shares in issue during the period of
17,279,960 (1997: 17,279,960).
The adoption of FRS 14 has had no effect on the calculation of earnings per
share and there is no difference between the diluted earnings per share and
the basic earnings per share.
6. Reconciliation of operating profit to net cash inflow from operating
activities
Unaudited Unaudited
six months six months Audited
ended ended year ended
27 December 28 December 28 June
1998 1997 1998
#'000 #'000 #'000
Operating profit 1,688 1,364 2,807
Depreciation 402 326 674
(Profit)/loss on sale of tangible
fixed assets (8) (20) 122
Decrease/(increase) in stock 201 (281) (49)
Increase in debtors (1,660) (1,730) (1,880)
(Decrease)/increase in creditors (811) 264 1,162
-------- -------- --------
Net cash (outflow)/inflow from
operating activities (188) (77) 2,836
======== ======== ========
7. Copies of this announcement will be posted to shareholders and are
available to the public from the company's registered office at: 19 Aintree
Road, Perivale, Greenford, Middlesex UB6 7LG."
The Directors of Provend Group PLC accept responsibility for the information
contained in this announcement. To the best of the knowledge and belief of
the Directors (who have taken all reasonable care to ensure that such is the
case), the information contained in this announcement is in accordance with
the facts and does not omit anything likely to affect the import of such
information.
END
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