ESR.L Regulatory News (ESR)

12 Dec 2008 07:00

Ensor Holdings PLC ("Ensor" or "the Group") Interim Results for the Period ended 30 September 2008

Chairman's Statement

During the period all of our companies were profitable, with one exception. This was our timber and fencing company, Hawkins-Salmon, which partly relocated from Northamptonshire to Cheshire.

This move, combined with management difficulties and the current economic climate, led to a significant loss for the period at this company which impacted on Group profits as a whole.

The problems at Hawkins-Salmon have been identified and addressed.

I am optimistic that the Group has suffered a temporary setback and that we will continue to manage the difficult economic conditions and that Ensor remains a strong business with excellent assets and opportunities.

Financial Review

Sales for the six months to 30 September 2008 reduced by 10% to ‚£14.1m (2007: ‚£ 15.7m). Our operating loss of ‚£198,000 compares with a profit of ‚£1,148,000 for the same period last year. Financial expenses were contained at ‚£62,000 (2007: ‚£90,000) and tax provisions for the period of ‚£82,000 credit (2007: ‚£280,000 charge) have been made. Earnings per share fell to 0.6p loss (2007: 2.3p profit).

Cash absorbed by operations was ‚£513,000 (2007: ‚£1,139,000 generated) as a result of losses incurred and trade and other payables reduced from the higher activity levels of last year end. Having made net capital expenditure payments of ‚£241,000 during the current half year, including ‚£100,000 deferred consideration, and dividend and pension fund payments of ‚£358,000, borrowings have increased by ‚£1,112,000 since the year end, leaving our gearing at a manageable level of 20% (2007: 16%). This gives a net asset value of 40p per share.

Trading

We believe that the markets in which we operate are generally down by as much as 30% compared with last year. In this climate it is pleasing to report that the majority of our businesses performed well and maintained or grew their market share.

As a result, the reduction in year on year sales, excluding Hawkins-Salmon, was limited to 1% in the first quarter and 5% in the second, which saw a marked slow-down as indicated in our trading update of 30 July 2008.

The reduction in profitability is principally due to three factors:-

* Poor performance at Hawkins-Salmon following relocation.

This has been addressed by the appointment of an experienced management team with a proven timber industry background and the restructuring of the business to realise substantial cost savings and productivity improvements. Current indications are that this business is operating much more efficiently and is recovering its customers and market position.

* The general economic recession.

* The weakness of sterling affecting our purchasing operations.

Excluding Hawkins-Salmon, Group sales were down by 3%, gross profit by 3.2% and pre-tax profit by ‚£267,000. The problems described at Hawkins-Salmon turned the Group result from a respectable profit into a small loss.

Our companies have remained competitive in these tight market conditions despite increasing costs including world commodity prices and the general weakness of sterling.

Overhead costs have been reduced against prior year levels.

Prospects

Market conditions remain very difficult and are not expected to improve during the course of this financial year. Seasonal factors traditionally lessen sales in the second half of our financial year but we expect this to be mitigated by a recovery at Hawkins-Salmon in particular.

Our pricing strategies recognise that cost increases driven by sterling weakness are expected to be more marked in the second half year.

As trading continues to be affected by global market conditions, our focus remains on strong marketing, internal cost controls, alternative cost-effective sourcing of raw materials and disciplined working capital management.

Dividend

After careful consideration of our results for the period and against a background of continuing global economic uncertainty, the Board feels it would be unwise to pay an interim dividend. The aim is, however, to resume dividend payments as soon as circumstances will allow.

Employees

On behalf of the Board, I thank all the staff at the Ensor companies for their sterling efforts in this present difficult business climate.

K A Harrison TDChairman12 December 2008Enquiries:Ensor Holdings PLCKen Harrison / Paul Parnham0161 945 5953Hanson Westhouse LimitedTim Feather / Matthew Johnson0113 246 2610Group Income Statement

for the six months ended 30 September 2008

Note Unaudited Unaudited Audited 6 months 6 months 12 months 30/9/08 30/9/07 31/3/08 ‚£'000 ‚£'000 ‚£'000 Revenue 14,117 15,683 29,437 Cost of sales (10,652) (10,712) (20,049) ----------- ----------- ----------- Gross profit 3,465 4,971 9,388 Distribution costs (748) (769) (1,584) Administrative expenses (2,915) (3,054) (5,838) ----------- ----------- ----------- Operating (loss)/profit (198) 1,148 1,966 Reorganisation costs 2 - (115) (150) Financial expenses (62) (90) (148) ----------- ----------- ----------- (Loss)/profit before tax (260) 943 1,668 Income tax credit /(expense) 3 82 (280) (474) ----------- ----------- ----------- (Loss)/profit for the period (178) 663 1,194attributable to equity shareholders ====== ====== ====== (Loss)/earnings per share 4 Basic (0.6p) 2.3p 4.1p Fully diluted (0.6p) 2.2p 3.9p ====== ====== ====== Dividends per share Dividends paid per share 0.78p 0.70p Dividends proposed per share 0.00p 0.42p ====== ====== Group Balance Sheetat 30 September 2008 Unaudited Unaudited Audited 30/9/08 30/9/07 31/3/08 ‚£'000 ‚£'000 ‚£'000 ASSETS Non-current assets Property, plant & equipment 5,919 6,207 5,969 Intangible assets 3,147 2,971 3,147 ----------- ----------- ----------- Total non-current assets 9,066 9,178 9,116 ----------- ----------- ----------- Current assets Inventories 4,523 4,238 4,415 Trade and other receivables 5,628 6,819 5,641 ----------- ----------- ----------- Total current assets 10,151 11,057 10,056 ----------- ----------- ----------- Total assets 19,217 20,235 19,172 ====== ====== ====== LIABILITIES Non-current liabilities Retirement benefit obligations 402 920 572 Deferred tax 159 61 117 ----------- ----------- ----------- Total non-current liabilities 561 981 689 ----------- ----------- ----------- Current liabilities Cash and cash equivalents 2,318 1,801 1,206 Trade and other payables 4,694 6,171 5,225 ----------- ----------- ----------- Total current liabilities 7,012 7,972 6,431 ----------- ----------- ----------- Total liabilities 7,573 8,953 7,120 ====== ====== ====== NET ASSETS 11,644 11,282 12,052 ====== ====== ====== Equity Share capital 2,945 2,945 2,945 Share premium 470 470 470 Revaluation reserve 871 868 871 Retained earnings 7,358 6,999 7,766 ----------- ----------- ----------- Total equity attributable to equity 11,644 11,282 12,052shareholders ====== ====== ====== Group Cash Flow Statement

for the six months ended 30 September 2008

Unaudited Unaudited Audited 6 months 6 months 12 months 30/9/08 30/9/07 31/3/08 ‚£'000 ‚£'000 ‚£'000 Cash flows from operating activities (Loss)/profit for the period (178) 663 1,194 attributable to equity shareholders Depreciation charge 207 246 499 Financial expenses 62 90 148 Income tax expense (82) 280 474 (Profit)/loss on disposal of (16) 55 (35) property, plant & equipment ----------- ----------- ----------- Operating cash flow before changes (7) 1,334 2,280 in working capital (Increase)/decrease in inventories (108) 154 24 Decrease/(increase) in trade and 13 (772) 406 other receivables (Decrease)/increase in trade and (361) 513 (90) other payables ----------- ----------- ----------- (463) 1,229 2,620 Interest paid (50) (90) (156) Income taxes paid - - (368) ----------- ----------- ----------- Net cash (absorbed by)/generated (513) 1,139 2,096 from operating activities ----------- ----------- ----------- Cash flows from investing activities Proceeds from sale of property, 53 117 146 plant & equipment Acquisition of property, plant & (194) (942) (501) equipment Acquisition of going concern (100) (138) (818) ----------- ----------- ----------- Net cash absorbed by investing (241) (963) (1,173) activities ----------- ----------- ----------- Cash flows from financing activities Repayment of loans - (50) (50) Capital element of finance lease - (4) (4) payments Equity dividends paid (230) (206) (330) Contribution to pension scheme in (128) (113) (141) excess of charge to income ----------- ----------- ----------- Net cash absorbed by financing (358) (373) (525) activities ----------- ----------- ----------- Net (decrease)/increase in cash and (1,112) (197) 398 equivalents ====== ====== ====== Analysis of net debt Bank overdraft 2,318 1,801 1,206 ====== ====== ====== Other Statements

for the six months ended 30 September 2008

Unaudited Unaudited Audited 6 months 6 months 12 months 30/9/08 30/9/07 31/3/08 ‚£'000 ‚£'000 ‚£'000 CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES (Loss)/profit for the period (178) 663 1,194 Actuarial gain and related deferred tax - - 363 ----------- ----------- ----------- (178) 663 1,557 ====== ====== ======CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Opening equity 12,052 10,825 10,825

Recognised (losses)/gains for the period (178) 663 1,557

Dividends paid (230) (206) (330) ----------- ----------- ----------- 11,644 11,282 12,052 ====== ====== ======

Notes to the Interim Financial Statements

1. Basis of preparation

The unaudited results for the six months have been prepared in accordance with International Financial Reporting Standards ("IFRS") and do not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. The statutory accounts for the year ended 31 March 2008, prepared under IFRS, have been delivered to the Registrar of Companies and received an unqualified audit report.

The formats of the Group Balance Sheet and Group Cash Flow Statement have been modified from last year to be consistent with the 2008 Report and Accounts.

2. Reorganisation costs

The reorganisation costs were provisions for redundancy payments and losses on sale of plant and equipment arising from the closure and relocation of a timber treatment plant operated by a subsidiary company.

3 Income tax credit/(expense)

The income tax credit/(expense) is calculated using the estimated tax rate for the year ended 31 March 2009.

4 Loss per share

The calculation of loss per share for the period is based on the loss after taxation divided by the weighted average number of ordinary shares in issue, being 29,445,659 (6 months to 30 September 2007 - 29,445,659 and year ended 31 March 2008 - 29,445,659). The fully diluted loss per share is based upon the weighted average of 29,955,405 shares (6 months to 30 September 2007 - 30,226,689 and year ended 31 March 2008 - 30,305,708). The dilution is due to subsisting share options.

5 Segmental analysis

The Group is organised into two primary reportable segments within the definitions of IAS 14 "Segment Reporting", as follows:

* Building Products - manufacture, marketing and distribution of materials, tools, components and access automation equipment to the construction industry. * Packaging - marketing and distribution of packaging materials. * Other - non-reportable segments as defined by IAS 14 which include rubber crumb manufacture, distribution of electric motors and waste recycling.

Head office costs are apportioned to the segments on the basis of earnings.

Segmental Analysis of Income Statement

Building Packaging Other Total Products ‚£'000 ‚£'000 ‚£'000 ‚£'000 Six months ended 30 September 2008 Revenue 12,230 860 1,027 14,117 Operating (loss)/profit (312) 110 4 (198) ====== ====== ====== ====== Six months ended 30 September 2007 Revenue 13,530 943 1,210 15,683 Operating profit 869 152 127 1,148 Reorganisation costs 115 - - 115 ====== ====== ====== ======

The Group operates from one geographical segment, being the United Kingdom. Turnover to customers located outside the United Kingdom accounted for less than 10% of total Group turnover and so has not been separately disclosed.