Interim Results
11 Novembre 2003 - 8:00AM
UK Regulatory
RNS Number:9029R
Latchways PLC
11 November 2003
11 November 2003
LATCHWAYS PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2003
Latchways plc designs, manufactures and sells a complete range of fall arrest
safety systems offering continuous protection to individuals working at height.
The systems are sold worldwide through a network of trained installers and are
used to provide worker safety on applications as diverse as buildings, bridges,
telecommunications towers, manufacturing plants, entertainment arenas and
offshore platforms. Latchways' equipment may be fitted either to new structures
or retrofitted to existing ones.
Financial Highlights
* Group turnover increased by 11% to #9.39 million (2002: #8.45 million).
* Operating profit increased by 27% to #1.46 million (2002: #1.15 million).
* Profit before tax increased by 32% to #1.35 million (2002: #1.02 million).
* Earnings per share increased by 34% to 8.66 pence (2002: 6.44p).
* Interim dividend 3.18 pence (2002: 3.025 pence).
Commenting on the results, the Chairman, Paul Hearson said:
"Latchways has had a highly satisfactory first half and has continued to build
on last year's strong performance. Turnover improved in all our key geographical
markets and this is reflected in our profits which have reached record levels.
The growth demonstrated in this year's figures is derived from our core
distributor-based business. The strength of this business, and the relationships
that underlie it, give us confidence that we will maintain profitable growth for
the remainder of the year."
Enquiries: Latchways plc Tel: 01380 732700
David Hearson, Managing Director
Rex Orton, Financial Director
Hudson Sandler Tel: 020 7796 4133
Lesley Allan / Wendy Baker
High resolution images are available for the media to view and download free of
charge from www.vismedia.co.uk
Chairman's Statement
The Latchways group has had a highly satisfactory first half and has continued
to build on last year's strong performance. Turnover improved in all our key
geographical markets and this is reflected in our profits which have reached
record levels.
Our position within our industry has been further enhanced in the first six
months with contract wins in both the telecommunications and rail industries in
the UK, together with further electricity tower business gained in mainland
Europe. These contracts, whilst having only minor impacts on the current
results, further underpin our business going forward.
Results
Group turnover for the six months was #9.39 million, 11% ahead of last year
(2002: #8.45 million). Operating profit increased by 27% to #1.46 million (2002:
#1.15 million), reflecting both improved turnover and stronger margins.
Profit before tax increased by 32% to #1.35 million (2002: #1.02 million), while
earnings per share were 8.66 pence, 34% ahead of 2002 (2002: 6.44p).
Gross margins improved to 52.2% (2002: 50.0%), whilst operating margins also
increased to 15.5% (2002: 13.6%), reflecting the success of product cost
reduction efforts and also Euro exchange rate improvements.
The board has declared an interim dividend of 3.18 pence (2002: 3.025 pence).
The dividend will be payable on 5 March 2004 to shareholders on the register at
6 February 2004.
Review
Our traditional installers remain the cornerstone of our business, and it is
around them that our strategies and initiatives are based. We have worked hard
in both Europe and North America and I am encouraged by the fact that we have
seen improved business in both these key geographies. We have continued to
invest in supporting our installer base as well as developing relationships with
specifiers and manufacturers.
In the UK, our installer business reached record levels with excellent
performances from our major accounts. Although capital spending in the
telecommunications and utilities sectors remains tight, we have expanded our
customer base with new business for communications masts in the rail network. We
remain the supplier of choice to the telecommunications sector, whilst
continuing to progress potential business in the electricity transmission
industry.
In mainland Europe, sales have been strong with both installer business and
sales to the electricity industry ahead of last year. Significantly, this year's
figures show that some of the strongest growth has come from the new installers
we have been developing over the past two years. We continue to actively develop
further such relationships across Europe.
North America continued its recent improvement with strong sales across the
distribution base. Our new overhead system, launched in the fourth quarter of
last year, has proved very successful and has opened up new opportunities which
our customers are exploiting.
During the period we restructured HCL, closing part of the Contracts business to
enhance future profitability. Despite this, HCL increased its turnover slightly
during the first half of the year. Profits were lower due to restructuring costs
and increases in insurance costs. The streamlined Contracts business is now
performing satisfactorily. The Safety arm of HCL has grown its business over
last year and continues to provide support for Latchways' telecommunications
customers.
Investment
We have continued to invest in the business and further new products are on
course to be launched in the second half of the year. We remain focused on
developing our overseas markets.
Recent Projects
Latchways continues to be the system of choice for architects when designing
fall arrest solutions for high profile projects. Recent examples include The
Pentagon, Washington DC; The Eden Project, Cornwall; The Swiss Re building,
London; The Olympia, Earls Court and Telewest Arenas; and Schipol Airport,
Amsterdam. In addition, we are a preferred supplier for Private Finance
Initiative (PFI) projects.
Looking Forward
Whilst we continue to progress projects in the telecommunications and
electricity industries both here and overseas, the growth demonstrated in this
year's figures is derived from our core distributor-based business. The strength
of this business, and the relationships that underlie it, give us confidence
that we will maintain profitable growth for the remainder of the year. In
addition, many of the recent contracts we have won will last for several years,
and provide a firm foundation for future business.
Paul Hearson
Chairman
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE PERIOD ENDED 30 SEPTEMBER 2003
(Unaudited) (Unaudited) (Audited)
6 months to 6 months to Year to
30.09.03 30.09.02 31.03.03
#'000 #'000 #'000
Turnover 9,391 8,447 18,449
Cost of sales (4,487) (4,220) (8,924)
Gross profit 4,904 4,227 9,525
Net operating expenses (3,449) (3,079) (6,535)
Operating profit 1,455 1,148 2,990
Interest receivable - - 14
Interest payable (109) (130) (250)
Profit on ordinary activities before taxation 1,346 1,018 2,754
Tax on profit on ordinary activities (406) (320) (787)
Profit on ordinary activities after taxation 940 698 1,967
Dividends (346) (328) (1,008)
Retained profit for the period 594 370 959
Earnings per share 8.66p 6.44p 18.15p
8.66p 6.44p 18.13p
Diluted earnings per share
CONSOLIDATED BALANCE SHEET
AS AT 30 SEPTEMBER 2003
(Unaudited) (Unaudited) (Audited)
As at As at As at
30.09.03 30.09.02 31.03.03
#'000 #'000 #'000
Fixed assets
Intangible assets 2,218 2,415 2,291
Tangible assets 2,752 2,801 2,791
4,970 5,216 5,082
Current assets
Stocks 1,737 1,761 1,440
Debtors 5,836 5,380 6,277
Cash at bank and in hand 722 198 1,144
8,295 7,339 8,861
Creditors: amounts falling due within one year (4,338) (4,952) (5,368)
Net current assets 3,957 2,387 3,493
Total assets less current liabilities 8,927 7,603 8,575
Creditors: amounts falling due after more than (2,452) (2,361) (2,748)
one year
Provisions for liabilities and charges (97) (101) (97)
Net assets 6,378 5,141 5,730
Capital and reserves
Called up share capital 655 653 653
Share premium account 974 922 922
Profit and loss account 4,749 3,566 4,155
Equity shareholders' funds 6,378 5,141 5,730
CONSOLIDATED CASH FLOW STATEMENT
FOR THE PERIOD ENDED 30 SEPTEMBER 2003
(Unaudited) (Unaudited) (Audited)
6 months to 6 months to Year to
30.09.03 30.09.02 31.03.03
#'000 #'000 #'000
Net cash flow from operating activities 1,371 732 2,982
Returns on investment
and servicing of finance (109) (131) (236)
Corporation taxation paid (532) (50) (439)
Dividends paid (683) (656) (983)
Capital expenditure (181) (339) (582)
Net cash flow before financing (134) (444) 742
Financing (149) (89) (180)
Movement in cash in the period (283) (533) 562
NOTES TO THE ACCOUNTS
1 Financial information and presentation
The financial information included in the Interim Report comprises profit and loss account, balance sheet and cash
flow. This information has been neither audited nor reviewed by the Group's auditors.
The financial information for the year to 31 March 2003 does not constitute statutory accounts within the meaning
of Section 240 of the Companies Act 1985. It is extracted from the statutory accounts for that year, on which the
auditors PricewaterhouseCoopers LLP gave an unqualified audit report. Statutory accounts for the year ended 31 March
2003 have been delivered to The Registrar of Companies.
2 Accounting policies
The Interim Report has been prepared in accordance with the normal accounting policies of the Group and does not
constitute statutory accounts.
3 Taxation
The taxation charge is based on the estimated effective rate applicable to the full year and represents
corporation tax and deferred taxation.
4 Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the
weighted average number of ordinary shares in issue during the period.
For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume
exercise of all dilutive share options. The group has only one such category: those share options granted to employees
where the exercise price is less than the average market price of the Company's ordinary shares during the period. The
average market price for the period was #2.75 (2002: #2.43).
Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below:
6 months to 6 months to
30.9.03 30.9.02
Earnings Per share Earnings Per share
Weighted average Weighted average
amount amount
number of shares number of shares
#'000 Pence #'000 Pence
Thousand Thousand
Basic EPS
Earnings attributed to 940 10,852 8.66 698 10,837 6.44
ordinary shareholders
Effect of dilutive - - - - 12 -
share options
Diluted EPS 940 10,852 8.66 698 10,849 6.44
5 Copies of the Interim Report
Copies of the Interim Report are available from the Group's registered office at Hopton Park, Devizes, Wiltshire,
SN10 2JP.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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