Last checked at 24 Sep 2010 07:00
MERCURY RECYCLING GROUP PLC
Interim Report for the period ending 30 June 2010
CHAIRMAN'S STATEMENT
The Group's un-audited results for the six months ended 30th June 2010, show sales of £1,330,000 with operating profits of £154,000 before tax. These figures compare to £1,465,000 and £229,000 respectively for the same period in 2009. However, our current results show an improvement in profit compared to the last six months of 2009 (£104,000).
I am pleased to report a healthy cash position. There was an overdraft of £71,000 at the year end for 2009. At the end of June there was a positive bank balance of £38,000.
The figures however, are somewhat overshadowed, by the statement I have made in the circular being posted to shareholders convening a General Meeting on 22nd October 2010, details of which have been announced separately today.
Westleigh Investments Holdings Limited will in due course, subject to shareholder approval and exercise of their warrants, control 29.9% of the issued shares in the company. More importantly, their two representatives on the Board, Giles Clarke and Nick Harrison, will, I am confident, help to transform the future of the Group. They have a successful track record, and are very well respected in the City. This, together with the strategy broadly spelt-out in today's statement, can only help to move the Group forward even faster than envisaged by the Recycling Industry.
Reverting to the six months figures themselves, I believe they are very good, considering we were still affected by the recession, but also the month of January lost many days trading because of the serious national freeze. All industry was of course affected, but we were hit particularly hard, as our vehicles were simply unable to collect lamps for recycling, and our business virtually stopped.
More generally, the new Recast WEEE and Battery Directive should make sure that the Recycling Industry's future is very promising. The proposed Recast WEEE Directive currently dictates that 85% of lamps sold must be recycled by 2016. Once ratified, this will mean that Lamp Manufacturers will need to dramatically improve their lamp recovery rates, year on year, in order to be compliant. New battery recycling targets set under the 2010 Battery Directive also offer further opportunities for us. We hope to report on developments in this area over the coming months. In addition, the new Board and strategy, announced today, stands ready to take advantage of other wider opportunities that will be coming available.
The current position indicates that the improvement referred to above, is being maintained. The cash balance is also improving every month, as no new major capital expenditure is currently required.
I would like to assure shareholders that the proposed major changes have not happened overnight, I have had a number of meetings with the new proposed Directors. I have always expressed confidence in the Group's prospects, and the future of the Recycling Industry, this confidence has been substantially boosted by the proposed changes.
Finally, I should emphasise that, with the approval of shareholders, I will be staying as Chairman of the Group. However, the two existing non-executive Directors, Joe Dwek and Anthony Leon, propose to retire at the time of the AGM. I would like to take this early opportunity of thanking both of them for their tremendous work for the Group. Their work, over many years, has made sure that we are in the current strong and stable position, that will enable us to take full advantage of the exciting new prospects that lie ahead.
Once again I would like to thank all our staff for their commitment and diligence during the last year.
The Rt Hon The Lord Barnett JP PC
Chairman
24 September 2010
| Enquiries: |
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| Mercury Recycling Group Plc |
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| Bryan Neill, Managing Director | 0161 877 0977 |
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| Smith & Williamson Corporate Finance Limited |
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| Barrie Newton | 0117 376 2213 |
| Nick Reeve | 0117 376 2213 |
CONSOLIDATED INCOME STATEMENT
FOR THE PERIOD ENDED 30 JUNE 2010
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| 6 Months | 6 Months | Year | |
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| ended | ended | ended | |
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| 30.6.10 | 30.6.09 | 31.12.09 | |
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| £'000 | £'000 | £'000 | |
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| Revenue | 1,330 | 1,465 | 2,789 | |
| Cost of sales | (109) | (96) | (163) | |
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| Gross profit | 1,221 | 1,369 | 2,626 | |
| Administrative expenses | (1,063) | (1,134) | (2,283) | |
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| Operating profit | 158 | 235 | 343 | |
| Finance costs | (4) | (6) | (10) | |
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| Profit before taxation | 154 | 229 | 333 | |
| Tax | (40) | (48) | (53) | |
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| Profit for the period | 114 | 181 | 280 | |
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| Earnings per share : | Basic (pence) | 0.34p | 0.54p | 0.83p |
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| Diluted (pence) | 0.33p | 0.53p | 0.82p |
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CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2010
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| As at | As at | As at |
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| 30.6.10 | 30.6.09 | 31.12.09 |
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| £'000 | £'000 | £'000 |
| Non-current assets |
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| Goodwill | 4,122 | 4,122 | 4,122 |
| Property, plant and equipment | 1,513 | 1,563 | 1,509 |
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| 5,635 | 5,685 | 5,631 |
| Current assets |
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| Trade and other receivables | 511 | 480 | 471 |
| Cash and cash equivalents | 82 | 34 | 1 |
| Current tax assets | - | - | 10 |
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| 593 | 514 | 482 |
| Total assets | 6,228 | 6,199 | 6,113 |
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| Current liabilities |
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| Trade and other payables | (281) | (329) | (249) |
| Bank overdrafts and loans | (103) | (153) | (139) |
| Current tax liabilities | (58) | (130) | (39) |
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| (442) | (612) | (427) |
| Non-current liabilities |
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| Trade and other payables | (39) | (57) | (42) |
| Bank loans | (192) | (231) | (225) |
| Deferred tax liabilities | (168) | (126) | (146) |
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| (399) | (414) | (413) |
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| Total liabilities | (841) | (1,026) | (840) |
| Net assets | 5,387 | 5,173 | 5,273 |
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| Equity |
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| Share capital | 3,403 | 3,402 | 3,403 |
| Share premium | 242 | 242 | 242 |
| Other reserves | 365 | 365 | 365 |
| Retained earnings reserve | 1,377 | 1,164 | 1,263 |
| Total equity | 5,387 | 5,173 | 5,273 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2010
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| Share | Share | Other | Retained | Total |
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| Capital | Premium | Reserves | Earnings | Equity |
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| £000 | £000 | £000 | £000 | £000 |
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| Balance at 1 January 2009 | 3,375 | 242 | 365 | 983 | 4,965 |
| Profit for the period | - | - | - | 181 | 181 |
| Issue of share capital | 27 | - | - | - | 27 |
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| Balance at 30 June 2009 | 3,402 | 242 | 365 | 1,164 | 5,173 |
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| Balance at 1 January 2009 | 3,375 | 242 | 365 | 983 | 4,965 |
| Profit for the period | - | - | - | 280 | 280 |
| Issue of share capital | 28 | - | - | - | 28 |
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| Balance at 31 December 2009 | 3,403 | 242 | 365 | 1,263 | 5,273 |
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| Balance at 1 January 2010 | 3,403 | 242 | 365 | 1,263 | 5,273 |
| Profit for the period | - | - | - | 114 | 114 |
| Issue of share capital | - | - | - | - | - |
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| Balance at 30 June 2010 | 3,403 | 242 | 365 | 1,377 | 5,387 |
CONSOLIDATED CASH FLOW STATEMENT
FOR THE PERIOD ENDED 30 JUNE 2010
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| 6 Months | 6 Months | Year | |
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| ended | ended | ended | |
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| 30.6.10 | 30.6.09 | 31.12.09 | |
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| £'000 | £'000 | £'000 | |
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| Net cash from operating activities | 271 | 344 | 395 | |
| Investing activities |
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| Proceeds on disposal of plant and equipment | - | 5 | 14 | |
| Purchases of plant and equipment | (121) | (320) | (393) | |
| Net cash used in investing activities | (121) | (315) | (379) | |
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| Financing activities |
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| Proceeds on issue of shares | - | 27 | 28 | |
| New bank loans raised | - | - | 100 | |
| Repayment of loans | (34) | (57) | (145) | |
| Repayments of finance lease obligations | - | (17) | (17) | |
| Net cash used in financing activities | (34) | (47) | (34) | |
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| Net increase (decrease) in cash and cash equivalents | 116 | (18) | (19) | |
| Cash and cash equivalents at the beginning of period | (70) | (51) | (51) | |
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| Cash and cash equivalents at end of period | 46 | (69) | (70) | |
| Note to the cash flow statement |
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| Operating profit | 158 | 235 | 343 | |
| Depreciation on plant and equipment | 117 | 102 | 229 | |
| Decrease in deferred income | (5) | (5) | (9) | |
| Loss on disposal of plant and equipment | - | 3 | 4 | |
| Operating cash flows before movements in working capital | 270 | 335 | 567 | |
| Movement in receivables | (30) | 66 | 64 | |
| Movement in payables | 35 | 1 | (89) | |
| Cash generated by operations | 275 | 402 | 542 | |
| Interest paid | (4) | (6) | (10) | |
| Tax paid | - | (52) | (137) | |
| Net cash from operating activities | 271 | 344 | 395 |
NOTES TO THE CONSOLIDATED ACCOUNTS FOR THE PERIOD ENDED 30 JUNE 2010
1. Basis of preparation and accounting policies
Basis of preparation
The results for the six months to 30 June 2010 have been prepared under International Financial Reporting Standards (IFRS) as adopted by the EU and International Accounting Standards Board.
The financial information does not constitute statutory accounts as defined by section 435 of the Companies Act 2006. Full accounts of the company for the year ended 31 December 2009 on which the Auditors gave an unqualified report, have been delivered to the Registrar of Companies.
2. Earnings per share
The calculation of basic and diluted earnings per share is based upon the profit for the period and the weighted average number of shares in issue during the period.
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| 6 months | 6 months | Year to |
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| to 30.6.10 | to 30.6.09 | 31.12.09 |
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| '000 | '000 | '000 |
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| Weighted average number of shares | 34,026 | 33,760 | 33,891 |
| Options - dilution | 55 | 133 | 207 |
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| 34,081 | 33,893 | 34,098 |
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| 6 months | 6 months | Year to |
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| to 30.6.10 | to 30.6.09 | 31.12.09 |
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| pence | pence | pence |
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| Basic earnings per share | 0.34 | 0.54 | 0.83 |
| Diluted earnings per share | 0.33 | 0.53 | 0.82 |
3. Copies of report
Copies of this interim statement will be despatched to shareholders and will be available to the public at the Registered Office, Mercury House, 17 Commerce Way, Trafford Park, Manchester, M17 1HW.