Ironveld Regulatory News (IRON)

9 May 2008 07:00

Mercury Recycling Group PLC09 May 2008 MERCURY RECYCLING GROUP PLC PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2007 Mercury Recycling Group PLC, the recycler of fluorescent light tubes and sodiumstreet lights, quoted on AIM, announces final results for the year ended 31December 2007. • Group sales up 10% to £2,657,000 (2006: £2,399,000) • Operating profit (before exceptional items) up 43% to £479,000 (2006: £336,000) • Profit before tax of £445,000 (2006: £84,000 profit) • Earnings per share (basic) up 319% to £1.09p (2006: £0.26p) • Growth achieved following implementation of WEEE Directive in July 2007 • Announcement of completion of acquisition of Envirolite Limited in May 2008 Enquiries: Simon Lebor, Group Chief ExecutiveMercury Recycling Group PLC Tel: 0161 877 0977 John Wakefield, Director, Corporate FinanceBlue Oar Securities Plc Tel: 0117 933 0020 CHAIRMAN'S STATEMENT I am pleased to report considerable progress for the year ended 31 December2007. Sales increased by just over 10% to £2,657,000 from £2,399,000 in 2006.Operating profits increased by over 40% to £479,000 from £336,000 demonstratingthe profit potential as sales continue to grow. As can be seen, the GroupBalance Sheet shows a strong liquid position, with current assets increasing to£1,052,000 from just £668,000 in 2006. In the light of the Group's strong financial position, the Directors had hopedto pay a dividend this year. However, because there is an historical adversebalance in our distributable reserves, this is not technically possible for thisyear. Subject of course to results being satisfactory, we would be proposing torecommend a dividend next year. Thereafter, it would be the intention that wepursue a progressive dividend policy in line with growth in earnings per share. The results are especially pleasing given, as stated previously, theconsiderable confusion following the late implementation of the WEEE Directivein July 2007. However the position is now much clearer, and has resulted in ourbeing allocated additional recycling areas across the country. I am confident of the Group's future prospects, since we estimate that stillonly some 30% of the approximately 130 million lamps a year are being recycled.As it is now illegal to landfill lamps and other WEEE products, we can expect alarger throughput for which we have the capacity. We are also seeing growth inour recycling of other products such as batteries and electrical items, althoughwe expect the main increase will still come from our growing share of the lamprecycling sector. I am therefore pleased to report that Management figures forthe first 3 months of 2008 are in line with expectations, although of coursethere will be competition and price pressures. We have been seeking further expansion by a suitable acquisition. I am pleasedthat following lengthy negotiations we completed the acquisition of EnviroliteLimited and its associated companies, a complementary grouping in the wasterecycling sector, on 7 May 2008. The consideration of £1.1 million was fundedentirely from our own resources. This will open up new geographic areas for ouroperation, and we expect the acquisition will be earnings enhancing from thecurrent financial year. Finally, I would again like to thank my colleagues and all our staff for theirhard work and dedication that has made our present position possible. Yours sincerely, The Rt Hon The Lord Barnett JP PCChairman CONSOLIDATED INCOME STATEMENT As restated 2007 2006 Note £'000 £000 Revenue 2 2,657 2,399 Cost of sales (173) (193) Gross profit 2,484 2,206 Administrative expenses (2,023) (2,096) Operating profit before share based paymentcosts and impairment 479 336Share based payment costs (18) (22)Goodwill impairment - (204) Group operating profit 3 461 110 Investment revenues 7 1Finance costs (23) (27) Profit on ordinary activities before taxation 445 84 Taxation (79) - Profit on ordinary activities after taxationretained for the year 366 84 Earnings per share - Basic 4 1.09p 0.25p - Diluted 4 1.07p 0.24p CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 2007 2006 £'000 £000 New share issued - 37Share based payment costs 18 22 Net income recognised directly in equity 18 59 Profit for the period 366 84 Total income and expense for the period 384 143 Opening balance 4,175 4,032 Closing balance 4,559 4,175 CONSOLIDATED BALANCE SHEET As restated 2007 2006 £'000 £'000 Non-current assetsGoodwill 3,021 3,021Other intangible assets 1 2Property, plant and equipment 1,158 1,140 4,180 4,163Current assetsTrade and other receivables 673 533Cash and cash equivalents 379 135 1,052 668 Total assets 5,232 4,831 Current liabilitiesTrade and other payables (265) (265) Obligations under finance leases (7) (21)Bank overdrafts and loans (28) (26) (300) (312)Non-current liabilitiesTrade and other payables (60) (73)Bank loans (233) (259)Deferred tax liabilities (79) -Obligations under finance leases (1) (12) (373) (344) Total liabilities (673) (656) Net assets 4,559 4,175 Capital and reserves Share capital 3,373 3,373Share premium 242 242Other reserve 365 365Retained earnings reserve 579 195 Equity shareholders' funds 4,559 4,175 CONSOLIDATED CASH FLOW STATEMENT As restated 2007 2006 £'000 £'000 Net cash from operating activities 471 377 Investing activities Interest received 7 1Purchases of property, plant and equipment (201) (96) Net cash used in investing activities (194) (95) Financing activitiesProceeds on issue of shares 17 20Repayment of loans (26) (15)Repayments of finance lease obligations (24) (24) Net cash used in financing activities (33) (19) Net increase in cash and cash equivalents 244 263 Cash and cash equivalents at the beginning of year 135 (128) Cash and cash equivalents at end of year 379 135 NOTES 1. Basis of preparation IFRS 1 'First Time Adoption of International Financial Reporting Standards'(IFRS 1) sets out the rules for an entity preparing its first IFRS financialstatements. The entity is required to determine the IFRS accounting policies inaccordance with the IFRS that are in place at the date of transition (1 January2006) and, in general, apply them retrospectively. There are a number ofpossible exemptions from the retrospective application to assist the entity inmaking the transition. The Group has taken the following exemptions: a) Business combinations: the Group has elected not to restate businesscombinations prior to the transition date (1 January 2006). b) Share-based payments: the Group has elected to exclude share-basedarrangements that were granted prior to 8 November 2002 or that have vestedprior to the transition date. The Financial Statements have been prepared in accordance with InternationalFinancial Reporting Standards (IFRSs). The Financial Statements have also beenprepared in accordance with IFRSs adopted by the European Union and thereforethe Group Financial Statements comply with Article 4 of the EU IAS Regulation. 2. Revenue The revenue and profit on ordinary activities before taxation arise from theGroup's principal activity. The Group's revenue has been analysed by geographic area as follows: 2007 2006 £'000 £'000 United Kingdom 2,641 2,373 Republic of Ireland 16 26 2,657 2,399 3. Profit for the year 2007 2006Profit for the year is shown after charging / (crediting): £'000 £'000 Depreciation on tangible assets 183 145 Amortisation 1 -Impairment of goodwill - 204 Government grants 9 9Profit on disposal of tangible assets - (1) Fees paid to the auditor analysed as follows:Audit fees (Group excluding holding company) 6 6 Audit fees (Holding company) 4 4 Tax consultancy 4 3 Other review reports 6 5 4. Earnings per share Basic - The calculation of basic earnings/(loss) per share is based on a profitof £366,000 (2006 - £84,000) and on 33,726,154 (2006 - 33,543,000) ordinaryshares, being the weighted average number of ordinary shares in issue during theyear. Diluted - The diluted earnings per share is based on the profit for the year of£366,000 and on 34,303,098 ordinary shares as adjusted for share options below: 2007 2006 £'000 £'000 Basic weighted average number of shares 33,726,154 33,543,000 Dilutive potential ordinary shares:Dilution caused by options 576,942 797,291 Diluted weighted average number 34,303,096 34,340,291 5. Post balance sheet events On 7 May 2008 the group acquired Envirolite Limited and its associated companiesa complementary grouping in the waste recycling sector. The consideration of£1.1 million was funded from own resources. 6. Annual General Meeting The Annual General Meeting of Mercury Recycling Group Plc will be held at SuiteOne, Courthill House, 66 Water Lane, Wilmslow, Cheshire SK9 5AS on Friday 13June 2008 at 10:00 am. This information is provided by RNS The company news service from the London Stock Exchange