NUT Neutrahealth

 

TIDMNUT 
 
RNS Number : 8138S 
NeutraHealth Plc 
16 September 2010 
 

16 September 2010 
                        NEUTRAHEALTH PLC ("the Company") 
                      ANNOUNCEMENT OF 2010 INTERIM RESULTS 
NeutraHealth plc today announces its interim results for the six months to 30th 
June 2010. 
The Company also announces today that the board has recommended a cash offer 
from Elder International for the entire issued share capital of NeutraHealth at 
a price of 6.5 pence per share. 
+----------------------+------+----------+-----+----------+---+----------+ 
| Financial Highlights |         H1 2010 |        H1 2009 |      FY 2009 | 
|                      |                 |                |              | 
+----------------------+-----------------+----------------+--------------+ 
| Revenue              |      | GBP16.8m |     | GBP16.6m |   | GBP34.6m | 
|                      |      |          |     |          |   |          | 
+----------------------+------+----------+-----+----------+---+----------+ 
| EBITDA               |      |  GBP0.6m |     |  GBP1.1m |   |  GBP2.3m | 
|                      |      |          |     |          |   |          | 
+----------------------+------+----------+-----+----------+---+----------+ 
| Adjusted* PBT        |      |  GBP0.2m |     |  GBP0.7m |   |  GBP1.0m | 
+----------------------+------+----------+-----+----------+---+----------+ 
| Adjusted* EPS        |      |     0.1p |     |     0.3p |   |    0.6p  | 
+----------------------+------+----------+-----+----------+---+----------+ 
| Net Debt             |      |  GBP5.5m |     |  GBP5.1m |   |  GBP5.0m | 
|                      |      |          |     |          |   |          | 
+----------------------+------+----------+-----+----------+---+----------+ 
| Cashflow from operations    |  GBP0.3m |     |  GBP0.7m |   |  GBP1.8m | 
| before working capital      |          |     |          |   |          | 
| changes                     |          |     |          |   |          | 
+----------------------+------+----------+-----+----------+---+----------+ 
 
Overview 
·      Revenue increased by 1.2% to GBP16.8m (H1 2009: GBP16.6m) 
·      Like for like revenue increased by 3.3% on H1 2009 
·      Like for like revenue decreased by 5.7% on H2 2009 
·      EBITDA decreased by 50% to GBP0.6m (H1 2009:GBP1.1m) 
·      Disposal of loss-making Nutrigold business 
·      Move to flexible invoice discounting to fund working capital requirements 
*Adjusted figure excludes the non-cash effect of acquired intangible asset 
amortisation, share option related charges, and one off items. 
 
Ray Myers, NeutraHealth Chief Executive, commented: 
"NeutraHealth has had a mixed start to the year. BioCare has performed well, led 
by strong export growth and successful new product development, delivering an 
increase in profitability. Brunel has experienced a difficult six months, with 
continued raw material price increases affecting margin. Additionally, sales 
have not been as strong as anticipated, especially in our contract manufacturing 
activity. 
Input price savings are being realised and are starting to improve our gross 
margin. However continued raw material price increases in the global market and 
the local competitive environment make operating conditions challenging. The 
Board anticipates that generating significant profit growth will take longer 
than previously expected." 
Further information for investors is available on the Company's website at 
www.neutrahealthplc.com/ 
+----------------------------------+-------------------------------+ 
| NeutraHealth plc                 |                               | 
+----------------------------------+-------------------------------+ 
| Ray Myers, Chief Executive       | 07768 940 630                 | 
+----------------------------------+-------------------------------+ 
| Robin Hilton, Finance Director   | 07738 018 411                 | 
|                                  |                               | 
+----------------------------------+-------------------------------+ 
| Cenkos (Nominated Adviser and Broker)                            | 
+------------------------------------------------------------------+ 
| Stephen Keys / Camilla Hume      | 020 7397 8900                 | 
+----------------------------------+-------------------------------+ 
| Pelham Bell Pottinger Public     |                               | 
| Relations                        |                               | 
+----------------------------------+-------------------------------+ 
| Dan de Belder / Lucy Frankland   | 020 7861 3232                 | 
+----------------------------------+-------------------------------+ 
 
                                BOARD STATEMENT 
Overview 
The Company announces today that the board has recommended a cash offer from 
Elder International for the entire issued share capital of NeutraHealth at a 
price of 6.5 pence per share.  These results should be read in conjunction with 
the 2.5 announcement. 
Our outlook in March in the Annual Report concluded that we had increased 
confidence in delivering significant growth in the coming years. However, the 
first half of 2010 has seen a mixed performance. Early good performance was 
reversed by continuing increases in raw material prices compounded by weaker 
than expected sales, leading to a decline in EBITDA. 
BioCare has performed well. It has returned to modest growth in the UK and is 
generating strong growth in export markets, which is being converted into 
increased profit. However, BioCare's good performance has been offset by 
weakness in Brunel in both sales and gross margin, leading to an EBITDA loss in 
Brunel for the first 6 months of the year. 
 
Results 
Group revenue grew 3.3% on a like for like basis versus H1 2009, excluding the 
loss-making Nutrigold business that was sold in January 2010. Compared with H2 
2009, like for like revenue declined by 5.7%. Increased material prices, 
deterioration in product mix and limited success in passing on cost increases to 
customers have contributed to a decline in gross margin, reducing from 33.4% in 
H2 2009 to 30.5% in H1 2010. 
Operating expenses in the period were reduced from GBP6.3m to GBP5.5m.  This was 
partly due to the sale of Nutrigold but is mainly attributable to tight control 
of expenditure and increased efficiency. 
The above factors combined to produce a fall in adjusted EBITDA from GBP1.1m in 
H1 2009 to GBP0.6m in H1 2010. 
Net debt increased to GBP5.5m at the end of June 2010 compared to GBP5.0m at the 
end of December 2009.  During the period we changed the structure of our bank 
financing from a term loan to an asset based facility utilising our strong 
debtor base in Brunel.  The Board believes this to be a more appropriate 
structure for the future needs of the business. 
 
Review of businesses 
The BioCare division has performed well during the period. Sales were up 6.5% in 
the first half of the year, helped by continuing strength in export and a return 
to growth for UK sales. Our web-based retailing business, Totally Nourish, also 
delivered strong sales growth albeit from a low base. This has generated good 
improvements in profit. Our customer service metrics are showing strong positive 
trends and the business has launched significant new products in recent months, 
particularly the BioMulsion range of liquids.  A new packaging livery has been 
launched and will roll out over the full range in the coming months. 
Brunel has experienced a difficult six months. The impressive sales growth in H2 
2009 has not been sustained. Demand for private label products has remained good 
due to continued new product development and we have further strengthened our 
position as market leader.  However, contract sales in Q2 suffered from a 
decline in demand for branded products in the mass market with ex-factory sales 
down by 17%.  As contract manufacturing is a higher value-adding activity this 
has had a knock-on effect in diluting margins. 
We are disappointed that despite our best efforts the prices of raw materials 
have continued to rise beyond our expectations. Significant limitations on the 
supply of some natural products due to harvest and yield issues are driving 
prices upwards (eg fish oils, certain vegetable oils and other marine-based 
products). Far East suppliers are now dominant in many of our product 
categories. 
We have passed on a proportion of price increases to our retail customers but in 
the main competitive pressures within our own market have prevented us from 
passing on most of the increases thus far. 
 
Outlook 
We expect modest improvement in our profitability in the medium term, helped by 
an expected return to profitability for Brunel by the end of the year. We 
anticipate our success in reducing input prices will offset the end of our 
lucrative licensing contract which expired in June 2010, having contributed 
GBP0.5m this year and GBP1.0m last year. 
The Board recently undertook a review of NeutraHealth's status in the light of 
concerns over performance and the risk of needing to downgrade market 
expectations. The review concluded that the likelihood of significant share 
price growth for the next few years was unlikely. We investigated a range of 
options for the future of the group, and concluded that a sale or break up would 
be in the best interests of shareholders, with the potential to realise up to 
6.5p per share. Shortly thereafter Elder International approached the Board with 
an intention to make an offer for the whole group. Todaythe board has 
recommended the offer from Elder for the entire issued share capital of the 
Company at a price of 6.5 pence per share. 
We recognise that shareholders may be disappointed that shareholder value has 
declined since joining AIM. However economic conditions have changed, and we 
believe that the 6.5p cash offer from Elder provides shareholders with a good 
premium to recent market value. 
Consolidated Statement of Comprehensive Income 
Six months ended 30 June 2010 

Neutrahealth (LSE:NUT)
Graphique Historique de l'Action
De Mai 2024 à Juin 2024

Neutrahealth (LSE:NUT)
Graphique Historique de l'Action
De Juin 2023 à Juin 2024