Samuel Heath Regulatory News (HSM)

5 Jul 2007 07:00

Heath(Samuel) & Sons PLC05 July 2007 SAMUEL HEATH AND SONS PLC PRELIMINARY RESULTS FOR THE YEAR ENDED 31ST MARCH 2007 CHAIRMAN'S STATEMENT We have enjoyed our most profitable year ever and are obviously pleased with theperformance of the Company. Despite quite difficult conditions in some markets, we have managed to pushsales ahead in most areas with the resultant increase in profitability.However, it has to be said that this must be seen in the context of sharplyhigher metal prices. The price of brass rose by 43% in the period. We were concerned that the higher prices necessitated for our products wouldcause problems. This did not prove to be the case in the short term, but couldwell have longer term repercussions. During the year, we had the chance to purchase the freehold of the part of thefactory which we did not own outright, and this we duly did. As will be apparent from the accounts, the Group continues to have a strongbalance sheet, and your Directors believe that a purchase of the Company'sshares at the right price level could benefit the Company, and thereby itsshareholders. Accordingly, your Directors are seeking your approval for thepurchase of up to 15% of the issued share capital, 380,298 shares, betweenAnnual General Meetings. During the last year, the Company bought back 11,496 shares. For the year in progress, life is going to prove very different. Increases inthe cost of borrowing are meant to curb spending and this is exactly what theyare doing, with the resultant effect on the Company's order book. It is saidthat it is six months for an increase to have an effect. If this is the case,we have hardly started yet. We also have a special problem in that the Government, in their wisdom, havealtered a building regulation which used to make it compulsory to have doorclosers on some internal doors. In fairness, they did quite a lot of researchbefore doing so, but appear to have been prepared to trade some possibleincreases in death by fire, for expediency. This is bound to have aconsiderable effect on some of our door closer products, one of which wasinvented by us some forty-five odd years ago. We have of course budgeted for these two factors for the coming year and theoutturn is a considerably lower profit forecast. To partly offset this, we have an exciting new and extensive range of taps andaccessories on sale, marketed under the name Fairfield. The newer and moresophisticated door closer, the Perko Powermatic, is also gaining market shareall the time. It is clear however that new products, with their costs of launchand tooling, do not give the same return as the established ones. Our dividend policy has been made clear previously, and we continue to returncash to shareholders, recommending a same again final dividend of 12.5 pence pershare. Sam HeathChairman 5th July 2007 PROFIT AND LOSS ACCOUNT 2007 2006 £000 £000 Turnover 12,712 11,677Cost of sales 5,702 5,045 ---------- ----------Gross profit 7,010 6,632 Distribution costs 411 386Administrative expenses 5,130 4,906 ---------- ---------- 5,541 5,292 ---------- ----------Operating profitNet of contributions to pension deficit 964 873Contributions to pension fund deficit 505 467 ---------- ----------Operating profit 1,469 1,340 Net interest receivableBank interest 99 121Finance income/(expense) 165 (23) ---------- ---------- 264 98 ---------- ----------Profit before taxation 1,733 1,438Taxation 349 375 ---------- ----------Profit on ordinary activities after taxation 1,384 1,063Deduct : Dividends2007 Interim of 11.0 pence per share 279 280 (2006: 2006 interim of 11.0 pence)2006 Final of 12.5 pence per share 319 216 (2006: 2005 final of 8.5 pence) ---------- ---------- 598 496 ---------- ----------Profit for the year retained 786 567 ---------- ----------Earnings per share - Basic and Diluted 54.5p 41.7p BALANCE SHEETS Group Parent Company 2007 2006 2007 2006 £000 £000 £000 £000 Fixed assetsTangible assets 3,201 3,211 3,201 3,211Investments - - 399 399 ---------- ---------- ---------- ---------- 3,201 3,211 3,600 3,610 ---------- ---------- ---------- ----------Current assetsStocks 2,645 2,191 2,645 2,191Debtors 2,135 2,154 2,135 2,154Cash at bank 1,901 2,691 1,901 2,691 ---------- ---------- ---------- ---------- 6,681 7,036 6,681 7,036 ---------- ---------- ---------- ----------Creditors: amounts falling due within one yearCorporation tax 245 190 245 190Amounts owed to Group undertakings - - 1,052 1,052Other creditors 1,183 1,755 1,183 1,755 ---------- ---------- ---------- ---------- 1,428 1,945 2,480 2,997 ---------- ---------- ---------- ----------Net current assets 5,253 5,091 4,201 4,039 ---------- ---------- ---------- ----------Total assets less current liabilities 8,454 8,302 7,801 7,649 Provision for liabilitiesDeferred tax 292 400 292 400Pension scheme deficit 548 806 548 806 ---------- ---------- ---------- ---------- 840 1,206 840 1,206 ---------- ---------- ---------- ----------Net assets 7,614 7,096 6,961 6,443 ---------- ---------- ---------- ----------Financed byCapital and reservesCalled up share capital 254 255 254 255Capital redemption reserve 109 108 109 108Profit and loss account 7,251 6,733 6,598 6,080 ---------- ---------- ---------- ----------Equity shareholders' funds 7,614 7,096 6,961 6,443 ---------- ---------- ---------- ---------- GROUP CASH FLOW STATEMENT for the year ended 31st March 2007 2007 2006 £000 £000 £000 £000 Net cash inflow from operating activities 405 1,234Returns on investments and servicing of financeInterest received 99 121 ---------- ----------Net cash inflow from returns on investments and 99 121servicing of finance TaxationU.K. corporation tax paid (200) (157) Capital expenditurePurchase of fixed assets (490) (618)Sale of fixed assets 51 45 ---------- ----------Net cash outflow from capital expenditure (439) (573) Management of liquid resources(Increase)/decrease in short-term deposits 603 (21) FinancingPurchase of own shares (57) - ---------- ----------Net cash outflow from financing (57) - Equity dividends paid (598) (496) ---------- ----------Increase/(decrease) in cash (187) 108 ---------- ---------- The basic and diluted earnings per share are calculated by dividing the relevantprofit after taxation of £1,384,000 (2006: £1,063,000) by the average number ofordinary shares in issue during the year being 2,538,700 (2006: 2,546,818). Thenumber of shares used in the calculations is the same for both basic and dilutedearnings. The Annual General Meeting has been fixed for Friday 17th August 2007 at 12noon. The final Ordinary Share dividend of 12.5 pence will be declared payableon Friday 24th August 2007 to ordinary shareholders registered at close ofbusiness on Friday 27th July 2007. Section 240 Statement The financial information set out above does not constitute the company'sstatutory accounts for the year ended 31 March 2007 or 2006. Statutory accountsfor 2006, which were prepared under UK GAAP, have been delivered to theRegistrar of Companies, and those for 2007 prepared under UK GAAP, will bedelivered in due course. The auditors have reported on the 2005 accounts; theirreport was unqualified, did not include references to any matters by way ofemphasis without qualifying their report and did not contain statements underSection 237 (2) or (3) of the Companies Act 1985. 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