Nwf Regulatory News (NWF)

31 Jan 2007 07:01

NWF Group PLC31 January 2007 Embargoed until 07.00, Wednesday 31 January 2007 NWF GROUP PLC INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 NOVEMBER 2006 NWF Group plc ("NWF"), the diversified sales and distribution business, todayannounces interim results for the six months ended 30 November 2006. Commenting on the results, Mark Hudson, Chairman said: "We have continued toinvest in each of our businesses during the period under review, the benefits ofwhich should supplement the growth we have seen from similar measures taken lastyear. These have resulted in a significant uplift in our first half results thisyear." Financial highlights: •Turnover increased by 17% to £156 million (2005: £134 million) •Profit on ordinary activities before taxation increased by 27% to £2.3 million (2005: £1.8million) •Basic earnings per share increased by 9% to 16.5p (2005: 15.2p) •Interim dividend increased by 7% to 4.9p (2005: 4.6p) •Net assets rose by 49% to £27.9 million (2005: £18.8 million) •All four businesses have performed better than in the same period last year •Warehouse building project at Wardle under way Divisional highlights: •Distribution:- turnover up 6% to £14.5 million (2005: £13.6 million) with operating profit of £958,000 (2005: £934,000) and all sites fully and profitably occupied. •Feeds:- turnover rose by 22% to £37.6 million (2005: £30.8 million) with operating profit up 28% to £913,000 (2005: 716,000) and an 18% volume increase. •Fuels:- turnover increased 13% to £93.7 million (2005: £82.7 million) with operating profits up 17% to £963,000 (2005: £823,000) and recent East Anglian acquisitions contributing well. •Garden Centres:- turnover of £9.9 million (2005: £6.4 million) with operating profit of £49,000 from an operating loss of £83,000 last year. Building in progress at new Ashton Park centre. On the outlook for the coming months Mark Hudson added: "Overall, the Boardremains confident of the Group's trading prospects for the year as a whole andthat the ongoing investments and recent acquisitions will underpin its plannedgrowth in this financial year and beyond." For further information please visit www.nwf.co.uk or contact: Graham Scott, Chief Executive John WestPaul Grundy, Finance Director Clemmie CarrNWF Group plc Tavistock CommunicationsTel: 01829 260260 Tel: 020 7920 3150 Chairman's Statement I am pleased to report record interim results for NWF Group for the six monthsended 30 November 2006. Both turnover and profit before taxation at Group levelhave shown significant improvement compared to the previous half year and allfour of our businesses have performed better than in the same period in 2005. We have continued to invest in each of our businesses during the period underreview, the benefits of which should supplement the growth we have seen fromsimilar measures taken last year. These have resulted in a significant uplift inour first half results this year. Results Group turnover for the six months to 30 November 2006 increased by 17% from £134million to £156 million. Operating profit increased by 21% to £2.9 million(2005: £2.4 million). Pre-tax profit before goodwill amortisation was up 27% to£2.6 million (2005: £2.1 million) and, after goodwill amortisation of £0.3million (2005: £0.2 million), was 27% higher at £2.3 million (2005: £1.8million). Basic earnings per share before goodwill amortisation were up by 8% at 19.4pence (2005: 17.9 pence), basic earnings per share after goodwill amortisationrose by 9% to 16.5 pence (2005: 15.2 pence) and diluted earnings per shareincreased from 14.9 pence to 16.2 pence. Net assets rose by 49% to £27.9 million (2005: £18.8 million). The significantcapital expenditure during the period of £8.5 million (2005: £1.2 million)related principally to the Distribution warehouse investment at Wardle and theconstruction of a new garden centre at Ashton under Lyne. This contributed asplanned to an overall cash outflow before financing of £12.1 million (2005: £3.5million). Despite this, gearing at the period end was 91% (2005: 102%). In accordance with London Stock Exchange rules for AIM listed companies, theGroup will be adopting International Financial Reporting Standards within itsfinancial statements for its 2007/08 financial year onwards. We are in theprocess of evaluating the implications of moving away from existing UKaccounting standards. Dividend The Board has approved an interim dividend per share of 4.9 pence (2005: 4.6pence), up by 7%, which is in line with its progressive dividend policy. Thiswill be paid on 1 May 2007 to shareholders on the register on 30 March 2007. Theshares will trade ex-dividend on 28 March 2007. Operations Operating profit in the Distribution business increased by 3% from £934,000 to£958,000 on turnover up by 6% to £14.5 million (2005: £13.6 million). All threewarehousing sites (Wardle, Deeside and Winsford) were fully and profitablyoccupied for most of the six months. The warehouse building programme at Wardleis well in hand with the first of the three warehouses now expected to becompleted in the first half of 2007 and all three handed over during the summer.The new warehouse capacity has been raised from the original 42,000 pallets tonearly 60,000 pallets by the partial introduction of mobile racking. Feeds saw an 18% volume increase in a competitive market, with similar tonnageuplifts being achieved in the North and in the South. Turnover rose by 22% from£30.8 million to £37.6 million while operating profit improved by 28% from£716,000 to £913,000. This has been a period of consolidation of the steps takenlast year by utilising much of the new capacity established, particularly inblended feeds. Against a backdrop of continuing high product prices, Fuels' turnover increasedby 13% from £82.7 million to £93.7 million on a volume increase of 9% to 158million litres. Operating profit was £963,000 compared to £823,000 last time, anincrease of 17%. Most depots performed well with Broadland Fuels in Norfolk(acquired in August 2005) contributing strongly and Browns of Burwell in Suffolk(acquired in July 2006) trading in line with initial expectations. Garden Centres operated five locations during the half year, including WoodfordPark (acquired in February 2006) for the first time. Turnover was £9.9 million(2005: £6.4 million) of which Woodford Park accounted for £2.9 million, leavinga 9% increase in sales from the remaining four centres. The operating profit of£49,000 showed a welcome turnround from a loss of £83,000 last year with alike-for-like improvement in collective contribution. Garden centres arenormally expected to make substantially all of their annual profits in oursecond half year. Building is in progress at Ashton Park, a greenfield site in aretail park in East Manchester acquired in June 2006. This new garden centre isexpected to open by Easter 2007 with little effect on this financial year'strading. Board and prospects I would like to take this opportunity to thank Roy Willis, who retired after the2006 Annual General Meeting, for his long and dedicated service and guidance tothe Group since joining the Board in 1980 and as Chairman since 1997. The Distribution division's second half performance will be impacted by the factthat in the autumn of 2006, a significant customer at Deeside was lost throughacquisition when the new owner, for economic reasons, consolidated theirlogistics in-house. However, a new contract is due to be signed with a majorbranded grocery supplier to distribute their products nationwide, which shouldfill the spare capacity at Deeside by the end of May. The outlook for theremainder of the Group is in line with our expectations. Overall, the Board remains confident of the Group's trading prospects for theyear as a whole and that the ongoing investments and recent acquisitions willunderpin its planned growth in this financial year and beyond. Mark Hudson Chairman 31 January 2007 Group profit and loss accountHalf year ended 30 November 2006 Half year to Half year to Year to 31 May 30 Nov 30 Nov 2006 2006 2005 ------------------------------------------------ £'000 £'000 £'000 Turnover (note 1) 155,735 133,616 292,873 Operating costs (152,852) (131,226) (286,151) ------------------------------------------------Operating profit (note 1) 2,883 2,390 6,722 Interest payable (574) (485) (1,088) Other finance costs - FRS17 34 (64) (127) ------------------------------------------------Profit on ordinary activitiesbefore taxation 2,343 1,841 5,507 Taxation (835) (625) (1,958) ------------------------------------------------Profit for the financial period 1,508 1,216 3,549 ================================================ Earnings per share (note 2)Basic before goodwillamortisation 19.4p 17.9p 47.1pBasic 16.5p 15.2p 41.7pDiluted 16.2p 14.9p 40.8p Proposed dividend per share 4.9p 4.6p 18.0p Summarised Group balance sheetAs at 30 November 2006 30 Nov 2006 30 Nov 2005 31 May 2006 ------------------------------------------------ £'000 £'000 £'000 Intangible fixed assets 9,528 8,199 9,285Tangible fixed assets 33,529 23,858 25,005Stocks 7,665 6,332 7,094Debtors 41,019 37,979 39,515Cash and bank balances 59 54 945Creditors: amounts falling duewithin one year (44,259) (38,587) (34,646) ------------------------------------------------Total assets less currentliabilities 47,541 37,835 47,198Creditors: amounts falling due aftermore than one year (15,213) (13,821) (15,219)Provision for liabilities andcharges (1,245) (813) (1,112) ------------------------------------------------Net assets excluding pensionliability 31,083 23,201 30,867Pension liability (3,152) (4,399) (3,223) ------------------------------------------------Net assets including pensionliability 27,931 18,802 27,644 ================================================ Total equity shareholders' funds 27,931 18,802 27,644 ================================================ Reconciliation of movements in equity shareholders' fundsHalf year ended 30 November 2006 Half year to Half year to Year to 30 Nov 2006 30 Nov 2005 31 May 2006 ------------------------------------------------ £'000 £'000 £'000 Opening equity shareholders' fundsas previously reported 27,644 21,648 21,648Prior year adjustment - FRS17 - (4,283) (4,283)Prior year adjustment - FRS21 - 988 988 ------------------------------------------------Opening equity shareholders' fundsas restated 27,644 18,353 18,353 Profit after taxation 1,508 1,216 3,549Dividends paid (1,225) (1,000) (1,421)Share capital issued includingpremium 4 236 5,984Actuarial gain on group pensionscheme - - 1,685Deferred taxation associated withgroup pension scheme - (3) (506) ------------------------------------------------Closing equity shareholders' funds 27,931 18,802 27,644 ================================================ Summarised Group cash flow statementHalf year ended 30 November 2006 Half year to Half year to Year to 30 Nov 2006 30 Nov 2005 31 May 2006 ------------------------------------------------ £'000 £'000 £'000 Operating profit 2,883 2,390 6,722Goodwill amortisation 270 217 468Depreciation charge 1,517 1,447 2,728Increase in working capital (2,912) (2,104) (639)Other (103) (68) (168) ------------------------------------------------Operating cash inflow 1,655 1,882 9,111Interest paid (508) (457) (1,210)Taxation paid (862) (752) (1,598)Dividends paid (1,225) (1,000) (1,421)Purchase of tangible fixed assets (8,518) (1,241) (2,822)Sale of tangible fixed assets 135 32 99Acquisitions including cash acquired (1,517) (916) (3,075)Deferred acquisition payments (1,830) (1,030) (1,030)Deferred disposal proceeds receipts 592 - - ------------------------------------------------Net cash outflow before financing (12,078) (3,482) (1,946)Term loan and HP finance movements 811 (311) (1,461)Medium term loan received - - 2,000Issue of ordinary share capital 4 236 5,983 ------------------------------------------------(Decrease)/increase in cash in theperiod (11,263) (3,557) 4,576 ================================================ Reconciliation of net cash flow to movement in net debtHalf year ended 30 November 2006 Half year to Half year to Year to 30 Nov 2006 30 Nov 2005 31 May 2006 ------------------------------------------------ £'000 £'000 £'000 (Decrease)/increase in cash per cashflow statement (11,263) (3,557) 4,576Cash (inflow)/outflow from(increase)/decrease in HP and debtfinancing (811) 311 (539) ------------------------------------------------Change in net debt resulting fromcash flows (12,074) (3,246) 4,037HP finance acquired with acquisition (13) - (220)New HP agreements entered into (606) - (731)Net debt brought forward (12,811) (15,897) (15,897) ------------------------------------------------Net debt carried forward (25,504) (19,143) (12,811) ================================================ Analysis of net debt: Cash and bank balances 59 54 945Overdrafts (10,541) (7,406) (164)HP finance due within one year (359) (45) (248)Debt due within one year - (600) -HP finance due after one year (1,000) (46) (644)Debt due after one year (13,663) (11,100) (12,700) ------------------------------------------------Total net debt (25,504) (19,143) (12,811) ================================================ Notes: 1. Segmental information Half year to Half year to Year to 30 Nov 2006 30 Nov 2005 31 May 2006 ----------------------------------------------------- £'000 £'000 £'000Turnover Distribution 14,499 13,632 27,226Feeds 37,596 30,809 71,911Fuels 93,734 82,734 178,151Garden Centres 9,906 6,441 15,585 ----------------------------------------------------- 155,735 133,616 292,873 =====================================================Operating profit Distribution 958 934 2,072Feeds 913 716 1,543Fuels 963 823 2,823Garden Centres 49 (83) 284 ----------------------------------------------------- 2,883 2,390 6,722 =====================================================Net operating assets Distribution 12,719 11,806 11,737Feeds 19,324 17,121 16,866Fuels 7,574 5,761 8,674Garden Centres 13,389 12,678 12,046 ----------------------------------------------------- 53,006 47,366 49,323 ===================================================== 2. Earnings per share The calculation of basic earnings per share before goodwill amortisation for thehalf year is based on profit after taxation and before goodwill amortisation of£1,778,000 (2005: £1,433,000) and on 9,142,000 (2005: 8,026,000) ordinary sharesrepresenting the weighted average number of shares in issue during the period. The calculation of basic earnings per share for the half year is based on profitafter taxation of £1,508,000 (2005: £1,216,000) and on 9,142,000 (2005:8,026,000) ordinary shares representing the weighted average number of shares inissue during the period. The calculation of diluted earnings per share for the half year is based on thefigures shown above amended for the weighted average dilutive effect (193,000shares) of share options outstanding through the period (2005: 162,000 shares). 3. Acquisitions The Group acquired Arthur A Gent & Sons Limited on 13 July 2006 for aconsideration of £0.9 million. This company has planning permission to build anew garden centre in Ashton under Lyne, Manchester, which is in the process ofbeing constructed. The book value of net assets acquired, after provisional fairvalue adjustments, amounted to £0.9 million. The results for the period sinceacquisition are not material. The Group acquired Browns of Burwell Limited, a fuel distribution business basednear Newmarket, on 31 July 2006 for a consideration of £1.4 million. The bookvalue of net assets at the date of acquisition amounted to £0.9 million,resulting in provisional goodwill of £0.5 million. The results for the periodsince acquisition are not material. 4. Comparative figures The figures for the half year ended 30 November 2006 and the comparative figuresfor the half year ended 30 November 2005 are unaudited. The comparative figuresfor the year ended 31 May 2006 are an abridged version of the accounts for thatyear filed with the Registrar of Companies, on which an unqualified auditopinion has been given. 5. Accounting policies The above financial statements have been prepared on the basis of accountingpolicies set out in the 2006 Annual Report and Accounts. 6. Interim Report Copies of the Interim Report are due to be sent to shareholders on 5 February2007. Further copies may be obtained from the Company Secretary at NWF Groupplc, Wardle, Nantwich, Cheshire, CW5 6BP. 2007 Financial calendar Interim dividend paid 1 May 2007Financial year end 31 May 2007Preliminary announcement of full year results August 2007Publication of Annual Report and Accounts August 2007Annual General Meeting 4 October 2007Final dividend paid 1 November 2007 This information is provided by RNS The company news service from the London Stock Exchange