RNS Number:8442P
PM Group PLC
17 September 2003
For Release 17 September 2003
PM GROUP PLC:
Preliminary Results - Year ended 30 June 2003
Strong growth and good prospects; Pre-tax profit up 15%; Maiden Dividend
PM Group Plc ('the Group'), a leader in the design, manufacture and service of
on board vehicle weighing systems for the bulk haulage and waste management
industries, announces its Preliminary Results for the year ended 30 June 2003.
The Group comprises five subsidiaries operating in the UK, France, Holland and
Belgium. The Group's shares were admitted to trading on AIM in May 2002.
Financial highlights
* Group turnover up 74% to #10.0m (2002: #5.8m)
* Excluding acquisitions, organic turnover growth was 47%
* Operating profit up 14% to #1.191m (2002: #1.049m)
* Profit before tax up 15% to #1.178m (2002: #1.025m)
* Basic earnings per share up 12% to 5.99p (2002: 5.34p)
* Maiden final dividend of 1.6p per share
* Dividends thereafter envisaged on an interim and final results basis.
Corporate highlights
* Acquisitions of 75% of Waste Collection Systems businesses in Belgium and
Holland
* Euro5m order from IVVO to supply bins, identification tags, weighing systems
* IVVO contract provides a further reference point for future tenders and
contracts
* Environmental legislation continues to drive UK and European sales
* Stated strategy to increase penetration into mainland Europe waste
management sector continues
* New larger premises in Bradford.
Commenting on Prospects, Chairman, Ken Jackson, said:
"The initial stage of the potential growth highlighted in my last statement has
been achieved. We have a clear strategy that is simple and sound, a strong value
proposition in our product range, facilities with room to expand and increased
geographic sales coverage. Based on the orders and enquiries we are currently
receiving, your Board views the future prospects of the Group with optimism."
Regarding the future, Chief Executive, Geoff Mountain, said:
"I am extremely positive about the future, the waste management sector,
particularly in Ireland and continental Europe, has developed quicker than we
expected, with significant growth still to come. The UK market is emerging and
when the identification and weighing projects currently being trialled by local
authorities are concluded, I am confident that PM Group will be well placed to
take advantage of the opportunities presented to us. I expect growth in all
sectors of our business."
For further information:
PM Group Plc Binns & Co PR
Geoff Mountain, Chief Executive Sam Allen/Paul McManus/Peter Binns
David Hartley, Finance Director Tel: 020 7786 9600 / 07748 651 727
Today: 020 7786 9600
Thereafter: 01274 771177
Web: www.pmgroup.plc.uk
Chairman's Statement
Introduction
In the first full year since joining the Alternative Investment Market (AIM), I
am pleased to report substantial progress in meeting our strategic objectives,
increasing and improving our product range and manufacturing facilities and
continued overall growth.
Results and Earnings
The Group's turnover for the financial year ended 30th June 2003 increased by
74% to #10 million from #5.8 million in the previous year. Excluding
acquisitions, the organic growth was 47%. Despite this organic growth and the
increasing volume of bin sales at lower margin, the level of overall gross
margin was maintained at 48%.
Operating profit for the financial year was #1.191 million (2002: #1.049
million), representing a growth of 14% and an operating margin of 12% (2002:
18%) which reflects our investment in product development and protection,
manufacturing and sales infrastructure and people, as a basis for the future
growth.
Profit on ordinary activities after interest and before taxation was #1.178
million (2002: #1.025 million). The tax charge for the year was #398,000 at
33.8% (2002: #357,000 at 34.8%) which is more than the 30% standard rate of
corporation tax, due to higher overseas tax rates and certain expenditure that
does not qualify for a tax deduction.
The cash raised on flotation last year has been spent on acquisitions,
infrastructure and property, with bank overdraft facilities used to fund the
increased working capital required by the growth in trading activities.
Basic earnings per share grew by 12% to 5.99p (2002: 5.34p).
Dividend
In May 2002, at the time of the AIM flotation, your Board stated that subject to
the absence of unforeseen circumstances, the first dividend was expected to be
declared in respect of the year ending 30th June 2003. Accordingly, your Board
is recommending a final dividend of 1.6p per ordinary share making a total
dividend for the year of 1.6p per share.
The Group
PM Group is a leader in the design, manufacture and service of onboard vehicle
weighing systems and associated software for the bulk haulage industry
("BulkWeigh") and in the growing waste collection/management markets
("BinWeigh"). Loadcells positioned on the chassis of the vehicle sense the
weight differential and record this on a computer display in the vehicle's cab.
In the waste collection industry, a data chip on the bin is read and processed,
via the on board computer, so that both the weight and the bin number are
recorded. The software in the computer can be extended to provide overall route
management data using the vehicle's own management systems together with
satellite navigation information via GPS technology. This data can then be
transmitted, using mobile telephone GPRS networks, back to a central computer
location to enable invoicing based on the weight of waste collected. BulkWeigh
continues to provide a growing foundation for the Group but the larger orders in
BinWeigh, particularly in mainland Europe, are escalating growth in the waste
management sector.
Geographic Coverage
PM Onboard, PM Electronics, Fleet Weighing Services, PME France and PM Benelux
are all wholly owned subsidiaries of the Group and operate under a common
management and product base.
In February and March this year, the Group acquired 75% of Waste Collection
Systems Belgium NV ("WCS Belgium") and Waste Collection Systems BV ("WCS
Holland") for #272,000 and #218,000 respectively. These companies provide waste
management services, including the supply of refuse bins, identification tags
and weighing systems to communities and local authorities. WCS Belgium had been
awarded a Euro5 million contract to supply a west Belgium Intercommunale (known as
the IVVO contract), with bins, identification tags and weighing systems. These
acquisitions will strengthen the Group's position in these markets and the IVVO
contract will provide a reference site for future tenders and contracts. This is
in line with the Group's stated strategy to increase penetration into the
mainland European waste management sector.
Manufacturing Facilities
Early in the second half we completed the move from Cutler House, Bradford,
where manufacturing growth was very constrained, to larger premises at Airedale
House, Bradford. The move was achieved smoothly with minimal disruption. Three
of the floors at our new premises are now occupied and the top two floors are
currently being marketed for short term letting. At the current growth rate it
is difficult to forecast when the building will be fully utilised by PM Group,
but it is expected to be within a few years. To achieve current and potential
growth it has been necessary to invest in the future development of the Group,
particularly in product design and production, infrastructure and people, and
this has been done during the year.
Personnel
This year has been hectic. We have achieved 47% organic growth, acquired two
subsidiaries, relocated and reorganised all our manufacturing facilities,
launched a new sophisticated onboard computer and to do this, taken on a large
number of new employees. None of the changes made to our business could have
been achieved without the hard work and support of all our employees. I thank
all our employees for the part they have played during the year in the
development of the Group.
Prospects
The initial stage of the potential growth highlighted in my last statement has
been achieved. The board believes that if the level of demand and legislative
pressures continue in the waste management sector, both in mainland Europe and
eventually in the UK, the Group will be well positioned to take advantage of the
future opportunities. BulkWeigh is expected to continue to provide steady growth
and a solid base to support the much larger BinWeigh contracts.
We have a clear strategy that is simple and sound, a strong value proposition in
our product range, facilities with room to expand and increased geographic sales
coverage. Based on the orders and enquiries we are currently receiving, your
Board views the future prospects for the Group with optimism.
Ken Jackson
Chairman
Chief Executive's Review
Strategic review
Our business started as one of providing on vehicle weighing indicators. These
products were primarily designed to inform the driver of the vehicle that it was
not overloaded, and hence illegal, but also not under-loaded compared to the
vehicle's carrying capacity, and hence inefficient. These systems have been
developed in terms of accuracy, such that our top of the range products are now
capable of weighing to an accuracy of one part in three thousand, or within
0.033%. As these systems have type approvals that enable them to be accepted as
legal for trade throughout Europe, new markets have emerged for their
application. In addition, developments in dynamic weighing enable us to weigh
bins and skips as they are being loaded into the vehicle, providing valuable
information to the operator, whilst not interfering with the driver's
efficiency.
Whilst our products have developed in terms of accuracy, they have also
developed in terms of the sophistication in the information they can provide.
Our latest products incorporate an on board computer, mounted in the driver's
cab, with a display that can monitor vehicle weight, route plan and loading
profile. This draws upon a wealth of new technology, including GPS satellite
navigation and RFID identification systems, which when incorporated with GSM
voice and GPRS data communication, can provide the operator with real time fleet
management information back at base. The data collected can be further
processed, to enable the invoicing of customers on the same day.
Operational review
The year has been one of significant development and investment. All the funds
raised on flotation last year have now been invested in the business. The most
significant investment has been the move to new premises. We spent #1.8 million
converting the building into a manufacturing, administration and product support
facility which is large enough to accommodate the growth we envisage in the
forthcoming years. A further #0.5 million was invested in WCS Belgium and WCS
Holland, businesses which provide services to the waste management industries in
continental Europe. They play an important role in winning contracts that not
only supply refuse containers, but also the weighing equipment that our business
supplies. The last category of investment is in product development, which is
reflected in the increased administrative costs, as this expenditure has all
been written off rather than capitalised on the balance sheet. The benefits of
this investment are now being seen as our customers recognise the clear
commercial advantages that these new products will bring to their businesses.
Waste management market
The waste management market is becoming increasingly important to the Group.
Environmental pressures are forcing communities to recognise that the dumping of
waste is no longer sustainable, and the only way to reduce the amount of waste
generated is to increase the recycled element of that waste. This has been
recognised by governments, resulting in European Legislation setting targets for
the amount of waste recycled. Our systems play an important role in this process
by enabling operators to identify the weight of waste generated by each
household, together with the weight of recyclable material collected. In this
way schemes can be developed to provide the incentive required to change
consumer attitudes to the recycling of waste. In Belgium, where recycling is
well developed, one community has outsourced the processing of their waste
collection data to ourselves, whereby we prepare invoices based on the weight of
waste collected for the authority to send to householders. This is regarded by
many as the emergence of the fifth utility, after water, electricity, gas and
telecoms.
Our acquisition of the WCS businesses has strengthened our position in this
sector. They are strategically important to us by enabling us to tender directly
on council contracts for the integrated supply of bins, data tags and weighing
and identification equipment.
The major waste operators have seen the benefits that our systems can provide
and we have received significant orders for the fitting of our equipment, not
only to new vehicles but also to retro-fit entire existing fleets. The
anticipated growth is dependant upon our ability to match the development of our
infrastructure to the increase in business that our customers require.
Bulk market
The bulk market, representing more traditional business, continues to grow, and
whilst this growth is steadier than the waste market, it provides a good
platform from which to develop other markets. The increased accuracy we have
developed continues to open up other opportunities, and these are being
progressed alongside the rapid developments in the waste sector.
People
As mentioned above, significant investment has been made in product and software
development, which is primarily in people. UK staff costs have risen by #0.5
million, representing an increase of 59% and we now have the resourses
substantially in place to meet the current and unforeseen demand for the
development of further enhancements in our product offering. I would like to
thank all our staff for their important contribution throughout this year.
The future
I am extremely positive about the future, the waste management sector,
particularly in Ireland and continental Europe, has developed quicker than we
expected, with significant growth still to come. The UK market is emerging and
when the identification and weighing projects currently being trialled by local
authorities are concluded, I am confident that PM Group will be well placed to
take advantage of the opportunities presented to us.
In conclusion, I expect growth in all sectors of our business and I am
optimistic about the prospects of PM Group as a whole.
Geoff Mountain
Chief Executive
Consolidated Profit and Loss Account
for the financial year ended 30 June 2003
Year ended Year ended
30 June 2003 30 June 2002
#000 #000
Group turnover
Continuing operations 8,470 5,445
Acquisitions 1,580 334
______ ______
10,050 5,779
Cost of sales (5,217) (3,003)
______ ______
Gross profit 4,833 2,776
Distribution costs (627) (290)
Administration costs (3,015) (1,437)
Group operating profit
Continuing operations 1,081 1,014
Acquisitions 110 35
______ ______
1,191 1,049
Net interest (13) (24)
______ ______
Profit on ordinary activities before taxation 1,178 1,025
Tax on profit on ordinary activities (398) (357)
______ ______
Profit on ordinary activities after taxation 780 668
Minority interests - equity (26) -
______ ______
Profit for the financial year 754 668
Dividends on equity shares (204) (401)
______ ______
Retained profit for the year 550 267
===== =====
Basic earnings per share 5.99p 5.34p
Diluted earnings per share 5.61p 5.10p
Consolidated Statement of Total Recognised Gains and Losses
Year ended Year ended
30 June 2003 30 June 2002
#000 #000
Profit for the financial year 754 668
Exchange differences (5) (2)
______ ______
Total recognised gains and losses relating to
the financial year 749 666
===== =====
Consolidated Balance Sheet
as at 30 June 2003
30 June 2003 30 June 2002
#000 #000
Fixed assets
Intangible assets 1,329 764
Tangible assets 4,141 2,012
______ ______
5,470 2,776
Current assets
Stocks 912 550
Debtors 3,656 2,044
Cash at bank and in hand 398 1,631
______ ______
4,966 4,225
Creditors: amounts falling due within one year (4,377) (1,939)
______ ______
Net current assets 589 2,286
______ ______
Total assets less current liabilities 6,059 5,062
Creditors: amounts falling due after more than
one year (91) (73)
Provisions for liabilities and charges (61) -
______ ______
Net assets 5,907 4,989
===== =====
Capital and reserves
Called up share capital 1,250 1,250
Share premium account 3,269 3,269
Shares to be issued (including premium) 394 -
Other reserves (82) (82)
Profit and loss account 1,097 552
Shareholders' funds - equity 5,928 4,989
Minority interests - equity (21) -
______ ______
5,907 4,989
===== =====
Consolidated Cash Flow Statement
for the financial year ended 30 June 2003
Year ended Year ended
30 June 2003 30 June 2002
#000 #000
Net cash flow from operating activities 414 529
Returns on investments and servicing of finance (13) (24)
Taxation (399) (165)
Capital expenditure and financial investment (2,290) (1,884)
Acquisitions (96) (70)
Equity dividends paid - (401)
Financing - 3,902
______ ______
Movement in cash in the year (2,384) 1,887
===== =====
Reconciliation of net cash flow to movement in
net debt
(Decrease) / increase in cash in the year (2,384) 1,887
Net cash acquired with subsidiaries 28 170
Translation differences 2 7
______ ______
Movement in the year (2,354) 2,064
Net funds / (debt) at the start of the year 1,501 (563)
______ ______
Net (debt) / funds at the end of the year (853) 1,501
===== =====
Notes
1 Basis of preparation and consolidation
The financial statements have been prepared under the historical cost basis of
accounting and in accordance with applicable Accounting Standards in the United
Kingdom.
Under section 230(4) of the Companies Act 1985, the Company is exempt from the
requirement to present its own profit and loss account.
2 Dividends
Year ended Year ended
30 June 2003 30 June 2002
#000 #000
Equity shares
dividends paid - 401
dividends proposed 204 -
______ ______
204 401
===== =====
The final dividend will be proposed to the shareholders at the forthcoming
Annual General Meeting. If approved, it will be paid on 7 November 2003 to
shareholders on the register on 17 October 2003.
3 Profit attributable to PM Group Plc
The profit for the year dealt with in the accounts of the parent company was
#500,000 (2002: #601,000). As permitted by section 230(4) of the Companies Act
1985, no separate profit and loss account is presented in respect of the parent
company.
4 Earnings per share
The calculation of basic earnings per ordinary share is based on the profit for
the financial year of #754,000 (2002: #668,000) and the weighted average number
of equity voting shares in issue of 12,597,544 (2002: 12,500,000).
The diluted earnings per ordinary share is based on the profit for the year of
#754,000 (2002: #668,000) and the weighted average number of equity voting
shares in issue and outstanding share options of 13,431,044 (2002: 13,097,000).
5 Reconciliation of movements in shareholders' funds
Year ended Year ended
Group 30 June 2003 30 June 2002
#000 #000
At 1 July 2002 4,989 285
Profit for the year 754 668
New share capital subscribed (net of issue costs) - 4,439
Shares to be issued 394 -
Exchange differences (5) (2)
Dividend payable (204) (401)
Minority interest (21) -
______ ______
At 30 June 2003 5,907 4,989
===== =====
6 Reconciliation of operating profit to net cash flow from
operating activities
Group Year ended Year ended
30 June 2003 30 June 2002
#000 #000
Operating profit 1,191 1,049
Depreciation charges 259 115
Amortisation charges 60 44
Loss on sale of fixed assets 4 1
(Increase) / decrease in stocks (106) 16
(Increase) in debtors (1,141) (237)
Increase / (decrease) in creditors 136 (459)
Increase in provisions 11 -
______ ______
Net cash inflow from operating activities 414 529
===== =====
7 Financial information
The financial information set out above does not constitute the Company's
statutory accounts for the year ended 30 June 2003 or 2002 (but is derived from
those accounts). Statutory accounts for 2002 have been delivered to the
Registrar of Companies and those for 2003 will be delivered following the
Company's Annual General Meeting. The auditors have reported on those accounts;
their reports were unqualified and did not contain statements under section 237
(2) or (3) of the Companies Act 1985.
8 Annual General Meeting
The Annual General Meeting will be held at 12 noon on 16 October 2003 at
Airedale House, Canal Road, Bradford BD2 1AG.
9 Report and Accounts
Copies of the Report and Accounts for the year ended 30 June 2003 are being sent
to shareholders in due course. Further copies will be available from the
Company's registered office at Airedale House, Canal Road, Bradford BD2 1AG.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR DQLFFXKBEBBB