Nwf Regulatory News (NWF)

8 Aug 2005 07:00

NWF Group PLC08 August 2005 Embargoed until 07.00, 8 August 2005 NWF GROUP PLC PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MAY 2005 NWF Group plc ("NWF"), the diversified sales and distribution business, todayannounces its preliminary results for the year ended 31 May 2005. Commenting on the results, Roy Willis, Chairman said: "This has been animportant year in the development of NWF. We have made significant acquisitionsin Feeds and Garden Centres, in Distribution we have leased a major warehouseand obtained planning permission for expansion at our Wardle site and we haveexited from our rural Country Stores activity. "We had until last year experienced seven years of average compound double-digitgrowth and I feel confident that this year's investments have paved the way forthe resumption of further profitable growth within the Group." Financial highlights (comparative figures for year to 31 May 2004): • Turnover increased by 19% to £236m (2004: £199m) • Profit before taxation and loss on disposal of business of £4.2m (2004: £5.2m) • Basic earnings per share 34.5p (2004: 43.1p) • Dividend per share for the year increased by 2.5% to 16.7p (2004: 16.3p) Divisional highlights: • Distribution - 32% increase in turnover reflecting the full use of capacity at Wardle and Winsford and the introduction of Deeside, which was full from February onwards; planning permission granted for 50% expansion of Wardle site • Feeds - Operating profit increased to £1.72m due to raw material and operational efficiencies; acquired Devon based feed milling company JGW Thomas & Son Ltd • Fuels - 24% increase in operating profit to £2.56m through organic growth • Garden Centres - exited Country Stores and acquired Victoria garden centre in Yorkshire On the outlook for the current year, Graham Scott, Chief Executive, commented: "We are confident about returning to our growth path in 2005/06. The last year has set the scene for increasingly full utilisation of both old and new assets." For further information please visit www.nwf.co.uk or contact: Graham Scott, Chief Executive John WestPaul Grundy, Finance Director Claire MellyNWF Group plc Tavistock CommunicationsTel: 01829 260 260 Tel: 020 7920 3150 NWF Group plc Preliminary results for the year ended 31 May 2005 Chairman's Statement Key points for 2004/05: • turnover up 19% to £236m (2004: £199m)• profit before taxation and loss on disposal of business of £4.2m (2004: £5.2m)• strong years for the Feeds and Fuels businesses• significant investments in Distribution, Feeds and Garden Centres• disposal of Country Stores• full year dividend per share increased by 2.5% to 16.7p (2004: 16.3p) This has been an important year in the development of NWF. We have madesignificant acquisitions in Feeds and Garden Centres, in Distribution we haveleased a major warehouse and obtained planning permission for expansion at ourWardle site and we have exited from our rural Country Stores activity. Tradingwas affected in Distribution by the start-up costs of the new Deeside warehouseand we experienced a poor year in garden retail combined with a number ofnon-recurring costs associated with the restructuring of this division. We haduntil last year experienced seven years of average compound double-digit growthand I feel confident that this year's investments have paved the way for theresumption of further profitable growth within the Group. Cash flows and funding The Group generated £2.7m cash (2004: £8.1m) from operating activities and therewas a net cash outflow after financing of £1.1m (2004: £0.3m inflow). The usesof funds included £2.7m of net capital expenditure (2004: £3.0m) and £5.7m innet acquisition payments (2004: £1.4m) including deferred payments of £0.4m(2004: £0.5m) relating to previous transactions. Despite significant investment,interest cover for the year was 5.9 times (2004: 10.5 times) and year-endgearing was 73% (2004: 42%). Dividend We propose a final dividend per share of 12.4 pence (2004: 12.1 pence), bringingthe total for the year to 16.7 pence. This represents an increase of 2.5% onlast year's total of 16.3 pence and this is covered 2.1 times (2004: 2.6 times).Subject to shareholder approval, the final dividend will be paid on 1 November2005 to shareholders on the register at the close of business on 19 August 2005.The shares will trade ex-dividend on 17 August 2005. Trading results Group turnover increased by 19% to £236m (2004: £199m). Including the £1.1mbenefit of releasing certain historic provisions no longer required, operatingprofit was £5.1m (2004: £5.7m) and profit before taxation and loss on disposalof business was £4.2m (2004: £5.2m). The loss on disposal of business of £0.2mrelated to the sale of all five UK Country Stores and the closure of the Isle ofMan Country Store. Two of our four businesses, Feeds and Fuels, moved ahead of last year despitedifficult market conditions in both cases. In Distribution and Garden Centres,as mentioned above, non-recurring items associated with restructuringcontributed almost entirely in the first case and partially in the second caseto dips in divisional operating profit. It is a tribute to the underlyingstrength of the Group that we can normally weather one or two businessesexperiencing a downturn although this time the combined adverse variancesoutweighed the favourable ones. Acquisitions, divestments and investments A 19,500 pallet warehouse at Deeside, Chester, was leased in July 2004. InSeptember, our Country Store on the Isle of Man was closed and in November theremaining five Country Stores were sold. At the same time, Victoria GardenCentre in Yorkshire was acquired. In December, JGW Thomas & Son Ltd, a feedmilling company in Devon, was acquired. Finally, new finished product outloadingbins at the Wardle feed mill added some 150% to storage capacity. Customers, colleagues and shareholders My thanks go as always to all of our business partners and customers and also toour entire management team and staff for continuing to build a very successfulGroup. Outlook for the current year Our settled strategy is to continue with the profitable growth of all fourbusinesses and the investments made in 2004/05 will stand us in good stead. Inthe current financial year we expect to see full year benefits from each of theexpansions described above and we are confident that the particular events whichled to some diseconomies last year are now behind us. I will comment on first quarter trading at the Annual General Meeting on 30September but the indications from the early weeks of the new financial year arein line with our expectations. Roy WillisChairman8 August 2005 NWF Group Preliminary results for the year ended 31 May 2005 Chief Executive's Review Group We have seen an unprecedented level of development in the Group this year.Significant foundations for further growth have been put in place in three ofthe businesses and our former Retail business has been streamlined into GardenCentres alone. Operating profits did not reach last year's levels in two of thedivisions but our expectations are that both will recover in the currentfinancial year. Distribution This has been a busy year with turnover rising by 32% to £22.0m reflecting thefull use of capacity at Wardle and Winsford and the introduction of Deesidewhich was full from February onwards. Operating profit was £1.05m, including a£0.14m provision release, (2004: £1.59m), the reduction being due almostentirely to start-up costs at Deeside and associated knock-on effects at Wardlewhere double handling of Deeside products took place. Winsford performed verywell through the year. Planning permission was granted for the building of three12,500 pallet warehouses at Wardle, an expansion of nearly 50% on the currentcapacity of some 76,500 pallets across three sites. Our intention is to progressthis project further in the coming months. Feeds The Feeds division improved its operating result to £1.72m, including a £0.36mprovision release, from £1.28m last year on like for like similar volumes ofaround 300,000 tonnes but once again with increased market share. Turnover,excluding the acquisition of JGW Thomas & Son, was £48.1m (2004: £49.8m)indicating a slight drop in world commodity prices year on year. The Wardle feedmill had its best-ever year with a recovery from the previous year's poor rawmaterial position combined with efficiencies within the mill arising from therecent raw material and finished product bin investments. JGW Thomas isperforming to expectation, contributing £5.0m from 35,000 tonnes to sales inaddition to the above figures, and should contribute well to next year'sresults. A small facility for trans-shipping products has been established nearAyr. Fuels NWF Fuels had another remarkable year, turning in a 24% increase in operatingprofit of £2.56m, including a £0.56m provision release, (2004: £2.07m). Turnoverrose by 27% to £145.5m on a volume increase of 6%, a reflection of the sustainedhigh price levels of oil products during the year. This performance isparticularly noteworthy in that it is truly organic from existing depots with,unusually, no acquisitions being made during the year. Diesel road fuel was themain product to see growth, partly as a result of the number of service stationsunder contract rising to 90 and increasing emphasis on fuel card marketing. Garden Centres This division has been renamed to reflect the focus of the business followingthe exit from the Country Stores activity in the year. With four large gardencentres operating in the new financial year, we are looking for improvedperformance from this division as gardening and leisure are still growth marketsin spite of a general retail downturn at present. Divisional turnover for theyear was £15.1m (2004: £17.3m) including the Country Stores and Victoria GardenCentre for parts of the year. The three existing garden centres saw a turnoverdecline of 2.6% with thinner margins particularly resulting from Spring weatherconditions. The divisional operating loss was £287,000 (2004: £785,000 profit)which includes a reversal in year-on-year contribution from the Country Storesof £394,000 and is after charging £224,000 costs of closing the Isle of ManCountry Store. Outlook for 2005/06 We are confident about returning to our growth path in 2005/06. The last yearhas set the scene for increasingly full utilisation of both old and new assets:Distribution expects a full year of all three warehouse locations operating atcapacity and we will also give consideration to the building programme atWardle, Feeds will continue to improve efficiency in the North West whiledeveloping its recently acquired mill in the South West, Fuels aims to extendits sequence of very good performances from its current depots while continuingto appraise opportunities for further geographical expansion, and Garden Centreswill concentrate on its four large sites to ensure that they maximise theirprofit potential and we will also bring forward proposals for adding to thisbusiness. Graham ScottChief Executive8 August 2005 NWF GROUP PLC PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MAY 2005 CONSOLIDATED PROFIT AND LOSS ACCOUNT Note 2005 2004 ------------------ £'000 £'000TURNOVER 1 235,648 198,770 ----------------------Cost of sales before provisions release (219,298) (181,111)Release of provisions no longer required 1 349 - ---------------------- COST OF SALES (218,949) (181,111) ---------------------- GROSS PROFIT 16,699 17,659 ----------------------Administrative expenses before provisions release (12,364) (11,944)Release of provisions no longer required 1 717 - ---------------------- ADMINISTRATIVE EXPENSES (11,647) (11,944) ---------------------- OPERATING PROFIT 1 5,052 5,715 LOSS ON DISPOSAL OF BUSINESS: 2 ----------------------Surplus over net tangible assets 595 -Less: goodwill resurrected on disposal (780) - ---------------------- (185) -Bank interest payable (850) (546) ---------------------- PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 4,017 5,169 Taxation on ordinary activities 3 (1,268) (1,740) ---------------------- PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 2,749 3,429 Equity dividends (1,330) (1,298) ----------------------RETAINED PROFIT FOR THE YEAR 1,419 2,131 ====================== Earnings per shareBasic 4 34.5p 43.1p Diluted 4 33.5p 42.0p All of the Group's turnover is derived from continuing operations. NWF GROUP PLC PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MAY 2005 CONSOLIDATED BALANCE SHEET 2005 2004 --------- --------- £'000 £'000 £'000 £'000FIXED ASSETSIntangible assets 7,300 3,348Tangible assets 23,591 18,610 -------- -------- 30,891 21,958 CURRENT ASSETSStocks 5,372 5,899Debtors: Due within one year 29,251 22,516 Due after more than one year 592 -Cash and bank balances 36 25 -------- -------- 35,251 28,440 CREDITORS - Amounts falling due within one year (28,525) (25,696) -------- -------- NET CURRENT ASSETS 6,726 2,744 -------- --------TOTAL ASSETS LESS CURRENT LIABILITIES 37,617 24,702 CREDITORS - Amounts falling due after more than one year (15,012) (4,353) PROVISIONS FOR LIABILITIES AND CHARGESPension provision (120) (97)Deferred taxation (837) (809) -------- --------NET ASSETS 21,648 19,443 ======== ======== CAPITAL AND RESERVESShare capital 1,991 1,990Share premium 541 536Revaluation reserve 1,446 1,572Other reserves 302 302Profit and loss account 17,368 15,043 -------- --------TOTAL EQUITY SHAREHOLDERS' FUNDS 21,648 19,443 ======== ======== NWF GROUP PLC PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MAY 2005 CONSOLIDATED CASH FLOW STATEMENT Note 2005 2004 --------- --------- £'000 £'000 £'000 £'000 NET CASH INFLOW FROM OPERATING ACTIVITIES 5 2,706 8,096 RETURNS ON INVESTMENTS AND SERVICING OF FINANCE Interest paid (863) (520) TAXATIONCorporation tax paid (1,519) (1,949) CAPITAL EXPENDITURE AND FINANCIAL INVESTMENTPurchase of tangible fixed assets (2,790) (3,183)Sale of tangible fixed assets 98 139 -------- -------- NET CASH OUTFLOW FROM CAPITAL EXPENDITURE (2,692) (3,044) ACQUISITIONS AND DISPOSALS Acquisition of businesses (5,330) (765) Cash / (bank overdraft) acquired with business 58 (160) Deferred payment for businesses acquired in prior years (400) (509) Disposal of business 1,561 - -------- -------- NET CASH OUTFLOW FROM ACQUISITIONS AND DISPOSALS (4,111) (1,434) EQUITY DIVIDENDS PAID (1,305) (1,195) -------- -------- NET CASH OUTFLOW BEFORE FINANCING (7,784) (46) FINANCINGMedium term loan received 9,000 1,400Medium term loan repayments (2,315) (1,026)Hire purchase finance repayments (46) (26)Shares issued for cash considerationincluding premium 6 1 -------- --------(DECREASE) / INCREASE IN CASH IN THE YEAR (1,139) 303 ======== ======== NWF GROUP PLC PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MAY 2005 NOTES 1. SEGMENTAL INFORMATION Business Turnover Turnover Operating Operating Net Net profit profit operating operating assets assets --------------------------------------------------------------- 2005 2004 2005 2004 2005 2004 --------------------------------------------------------------- £'000 £'000 £'000 £'000 £'000 £'000 Distribution 22,000 16,683 1,054 1,586 12,092 9,803 Feeds 53,090 49,837 1,722 1,278 10,469 8,690 Fuels 145,486 114,969 2,563 2,066 7,850 5,466 Garden Centres 15,072 17,281 (287) 785 9,752 6,604 --------------------------------------------------------------- 235,648 198,770 5,052 5,715 40,163 30,563 =============================================================== The following provisions which are no longer needed have been released and areincluded within the 2005 operating profit figures disclosed above: Distribution£85,000 (cost of sales) and £55,000 (administrative expenses); Feeds £362,000(administrative expenses); Fuels £264,000 (cost of sales) and £300,000(administrative expenses). Net operating assets exclude corporation tax, deferred taxation, dividends,deferred acquisition debtors and creditors, cash, borrowings and intergroupbalances. 2. LOSS ON DISPOSAL OF BUSINESS Following a strategic decision to exit the Country Store sector of the Retailmarket, the Group closed its store in the Isle of Man during September 2004.This resulted in £224,000 operating costs being incurred during the year, and anexceptional provision of £11,000 exists at year end for costs still to beincurred. In November 2004 the Group disposed of its UK Country Stores businessto Countrywide Farmers plc for a consideration of £2,153,000 (of which £592,000is deferred until November 2006), which resulted in a surplus over net tangibleassets sold of £606,000. As a result of the above, goodwill amounting to £780,000, which had beentransferred directly to reserves in previous years on the acquisition of certainCountry Stores, has been resurrected through this year's profit and lossaccount. 3. TAXATION 2005 2004 ----------------- £'000 £'000 UK Corporation tax at 30% (2004 - 30%) 1,273 1,673Deferred tax (credit)/charge (8) 107 ----------------- 1,265 1,780Prior year - current tax charge / (credit) 97 (18)- deferred tax credit (94) (22) ----------------- 1,268 1,740 ================= 4. EARNINGS PER SHARE The calculation of basic earnings per share is based on profit after tax for thefinancial year £2,749,000 (2004: £3,429,000), divided by 7,961,890 ordinaryshares being the weighted average number of ordinary shares in issue (2004 -7,960,633). Earnings per ordinary share is adjusted to a fully diluted basis by adding tothe weighted number of shares in issue in the calculation, the weighted averagenumber of 238,000 (2004 - 204,000) dilutive ordinary shares in respect ofoutstanding share options. 5. RECONCILIATION OF OPERATING PROFIT TO NETCASH INFLOW FROM OPERATING ACTIVITIES 2005 2004 --------- --------- £'000 £'000 £'000 £'000 Operating profit before provision releases 3,986 5,715Provision releases (note 1) 1,066 - --------- --------- 5,052 5,715Goodwill amortisation 300 175Depreciation charge 2,515 2,260Profit on sale of tangible assets (24) (95)Decrease / (increase) in stocks 287 (581)Increase in debtors (5,907) (1,329)Increase in creditors 460 1,959Increase / (decrease) in pension provision 23 (8) --------- --------- (5,137) 41 --------- ---------Net cash inflow from operating activities 2,706 8,096 ========= ========= 6. ANALYSIS OF NET DEBT Other At 31 May non-cash At 31 May 2004 Cash flow changes 2005 ---------------------------------------------- £'000 £'000 £'000 £'000 Cash and bank balances 25 11 - 36Bank overdraft (2,681) (1,150) - (3,831) ---------------------------------------------- (2,656) (1,139) - (3,795)Debt due within one year (1,065) 1,065 (600) (600)HP liabilities due within one year (45) 46 (46) (45)Debt due after one year (4,250) (7,750) 600 (11,400)HP liabilities due after one year (103) - 46 (57) ----------------------------------------------Total (8,119) (7,778) - (15,897) ============================================== 7. FINANCIAL CALENDAR Annual Report to be published 31 August 2005 Annual General Meeting 30 September 2005 Dividend: - ex-dividend date 17 August 2005 - record date 19 August 2005 - payment date 1 November 2005 8. ANNUAL REPORT This preliminary announcement does not form the Group's statutory accounts. Thefigures shown in this release have been extracted from the Group's fullfinancial statements which, for the year ended 31 May 2004, have been delivered,and, for the year ended 31 May 2005 will be delivered, to the Registrar ofCompanies. Both carry an unqualified audit report. The financial statements for the year ended 31 May 2005 have been prepared inaccordance with applicable accounting standards, using the same principalaccounting policies as set out in the Annual Report for the year ended 31 May2004. After 31 August, copies of the Annual Report can be obtained from the Company'sregistered office at Wardle, Nantwich, Cheshire, CW5 6BP or viewed on theCompany's Website: www.nwf.co.uk This information is provided by RNS The company news service from the London Stock Exchange