RNS Number:3458E
Chemetall PLC
24 September 2007
Chemetall PLC
Interim Financial Report
30 June 2007
Chemetall PLC
Interim financial report 2007
Contents Page
Commentary 1
Consolidated income statement 3
Consolidated statement of recognised income and expense 4
Consolidated balance sheet 5
Consolidated cash flow statement 7
Notes to the interim financial report 8
Chemetall PLC
Page 1
Commentary
Chemetall PLC sales to third parties grew by more than 10% (on a comparative
basis) over the prior year during the first 6 months of 2007. All major sectors
showed good growth compared to the prior year. The Middle East markets for which
Chemetall PLC is responsible also continued their steady growth.
In February 2007 Chemetall PLC acquired the trade and assets of the chemical
division of Wirral Fospray Limited, for a total consideration of #1.2m, which
included the assets, goodwill, intangible assets, and inventories. This will
strengthen the Company's position in metal surface treatments, especially in the
aluminium-finishing market.
Results and dividends
During the first six months, the Group generated a profit on ordinary activities
before taxation of #2.6 million (2006: #1.6 million) with a turnover of #10.7
million (2006: #9.8 million).
The Group's loan assets, including any exchange movements and interest accrued
thereon, totalled #85.2 million at 30 June 2007(30 June 2006: #4.2 million).
Preference dividends continue to be paid on the normal due dates.
Cash flow and financing
The net cash inflow from operating activities at 30 June 2007 was #1.6 million
(30 June 2006: #37.6 million).
At the period end the Group had net cash balances of #2.8 million, #0.54 million
of which was used to pay the preference dividend in July.
Board
There have been no changes to the Board during the half year. The Directors who
held office during this period were as follows:
K Wenzel Chairman
R S Rydings
M W Stoermer
P G M Vannerberg
Employees
Chemetall thanks its employees for continuing to help the Company grow in
turnover and profitability despite the prevailing manufacturing downturn.
Chemetall PLC continues to invest in both internal and external training and
development of all employees. The increasingly positive trading results are
directly related to the high level of competence and commitment of the staff.
Chemetall PLC
Page 2
Commentary (continued)
Outlook
The third party sales growth has continued its upward trend that started in 2005
and continued throughout 2006.
The first six months of 2007 have seen continuing increases in raw material
prices; we have, though, been able to increase selling prices to maintain the
margins. This trend is expected to continue in the second half of the year, but
with the tight cost control program that commenced in 2005, showing continued
significant benefits, the outlook for our future profitability continues to look
good.
65 Denbigh Road
Bletchley
Milton Keynes MK1 1PB
By order of the Board,
P G M Vannerberg
R S Rydings
Chemetall PLC
Page 3
Consolidated income statement
For the six months ended 30 June 2007
Six months ended 30 June Year ended 31 December
Note 2007 2006 2006
#000 #000 #000
Unaudited Unaudited Audited
Revenue 10,690 9,759 18,687
Cost of sales (6,602) (6,397) (11,659)
Gross profit 4,088 3,362 7,028
Distribution costs (2,182) (1,964) (4,163)
Administrative
expenses (701) (739) (1,710)
Other operating
expenses (81) - (84)
Profit from
operations 1,124 659 1,071
Financial income 2,020 1,573 3,292
Finance costs (540) (556) (1,131)
Profit before tax 2,604 1,676 3,232
Tax 3 (552) (479) 105
Profit for the
period 2,052 1,197 3,337
Chemetall PLC
Page 4
Consolidated statement of recognised income and expense
For the six months ended 30 June 2007
Six months ended 30 June Year ended 31 December
2007 2006 2006
#000 #000 #000
Unaudited Unaudited Audited
Exchange differences
on translation of
foreign operations (42) 248 (779)
Actuarial gains on
defined benefit
pension schemes 2,503 775 1,318
Tax on items taken
directly to equity (701) (232) (395)
Net gain recognised
directly in equity 1,760 791 144
Profit for the period 2,052 1,197 3,337
Total recognised
income and expense
for the period 3,812 1,988 3,481
Chemetall PLC
Page 5
Consolidated balance sheet
As at 30 June 2007
Note 30 June 2007 30 June 2006 31 December 2006
#000 #000 #000
Unaudited Unaudited Audited
Non-current assets
Goodwill 2,475 2,475 2,475
Other intangible
assets 1,255 338 261
Property, plant and
equipment 1,158 1,172 1,196
Deferred tax assets 4,000 3,807 4,654
8,888 7,792 8,586
Current assets
Inventories 1,425 1,161 1,443
Trade and other
receivables 89,744 8,308 88,292
Cash and cash
equivalents 2,785 82,083 2,157
93,954 91,552 91,892
Total assets 102,842 99,344 100,478
Current liabilities
Trade and other
payables (6,391) (5,951) (5,815)
Tax liabilities (2,476) (1,467) (1,879)
Provisions (163) (241) (197)
(9,030) (7,659) (7,891)
Net current assets 84,924 83,893 84,001
Chemetall PLC
Page 6
Consolidated balance sheet (continued)
As at 30 June 2007
Note 30 June 2007 30 June 2006 31 December 2006
#000 #000 #000
Unaudited Unaudited Audited
Non-current liabilities
Interest bearing
loans and borrowings (12,000) (12,000) (12,000)
Retirement benefit
obligation 5 (4,696) (7,895) (7,312)
Long-term provisions (1,131) (1,110) (1,102)
(17,827) (21,005) (20,414)
Net assets 75,985 70,680 72,173
Equity
Share capital 6,889 6,889 6,889
Share premium account 29,757 29,757 29,757
Translation reserve (1,877) (808) (1,835)
Retained earnings 41,216 34,842 37,362
Total equity 75,985 70,680 72,173
Chemetall PLC
Page 7
Consolidated cash flow statement
For the six months ended 30 June 2007
Six months ended 30 June Year ended 31 December
Note 2007 2006 2006
#000 #000 #000
Unaudited Unaudited Audited
Net cash from
operating
activities 4 1,618 37,630 825
Investing activities
Purchases of
property, plant
and equipment (60) (13) (130)
Acquisition of
trade and assets 7 (1,193) - -
Net cash used in
investing
activities (1,253) (13) (130)
Financing activities
Interest paid - (16) (51)
Interest received 2,020 1,573 3,292
Amounts due to
group undertakings (1,217) - (43,900)
Preference
dividend paid (540) (540) (1,080)
Net cash from
financing
activities 263 1,017 (41,739)
Net
increase/(decrease
) in cash and cash
equivalents 628 38,634 (41,044)
Cash and cash
equivalents at
beginning of
period 2,157 43,201 43,201
Foreign exchange
gain on cash and
cash equivalents
held - 248 -
Cash and cash
equivalents at end
of period 2,785 82,083 2,157
Chemetall PLC
Page 8
Notes to the interim financial report
Six months ended 30 June 2007
1. Basis of preparation
This interim financial information has been prepared applying the accounting
policies and presentation that were applied in the preparation of the company's
published financial statements for the year ended 31 December 2006.
The financial statements are prepared on the historical cost basis.
2. The financial statements for the half year ended 30 June 2007 have not been
audited.
The comparative figures for the financial year ended 31 December 2006 are not
the company's statutory accounts for that financial year. Those accounts have
been reported on by the company's auditors and delivered to the registrar of
companies. The report of the auditors was:
(i) unqualified,
(ii) did not include a reference to any matters to which the auditors drew
attention by way of emphasis without qualifying their report, and
(iii) did not contain a statement under section 237(2) or (3) of the Companies
Act 1985.
3. Tax
Six months ended 30 June
2007 2006
#000 #000
UK corporation tax 552 479
Corporation tax for the interim period is charged at 21% (2006: 29%), due to the
comparatively large amount of interest receivable included in the results,
representing the best estimate of the weighted average annual corporation tax
rate expected for the full financial year.
Chemetall PLC
Page 9
Notes to the interim financial report (continued)
Six months ended 30 June 2007
4. Notes to the cash flow statement
Six months ended 30 June
2007 2006
#000 #000
Profit before taxation 2,604 1,676
Adjustments for:
Depreciation of property, plant and equipment 98 91
Amortisation of intangible assets 15 75
Decrease in provisions (5) (32)
Interest income (2,020) (1,573)
Interest expense 540 556
Operating cash flows before movements in working
capital 1,232 793
Decrease in inventories 218 185
(Increase)/decrease in receivables (245) 36,011
Increase in payables 413 194
Cash generated by operations 1,618 37,183
Income taxes refunded/ (paid) - 447
Net cash from operating activities 1,618 37,630
Cash and cash equivalents (which are presented as a single class of assets on
the face of the balance sheet) comprise cash at bank.
5. Retirement benefit schemes
Defined benefit schemes
The group operates two defined benefit schemes which provide for liabilities
through trustees operated funds.
During the period, the deficit in the scheme decreased by #2,503,000. An IAS 19
charge of #236,000 was recognised in the income statement for the period.
Chemetall PLC
Page 10
Notes to the interim financial report (continued)
Six months ended 30 June 2007
6.Related party transactions
Transactions between the company and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed in this
note. Transactions between the group and other related parties are disclosed
below.
Trading transactions
During the period, group companies entered into the following transactions with
related parties, who are not members of the group:
Sale of goods Purchase of goods Amounts owed by Amounts owed to
related parties related parties
Six months
ended 30 June 2007 2006 2007 2006 2007 2006 2007 2006
#000 #000 #000 #000 #000 #000 #000 #000
Fellow
subsidiary
undertakings 347 319 1,424 1,523 528 647 2,179 2,069
Sales and purchases of goods to related parties were made at the parent group's
usual list prices. The amounts outstanding are unsecured and will be settled in
cash. No guarantees have been given or received. No provisions have been made
for doubtful debts in respect of the amounts owed by related parties.
During the period, other services such as licences, IT services and insurance
were purchased from Chemetall GmbH in the amount of #219,000 (30 June 2006:
#150,000).
Non-trading transactions
The group has lent money to the following fellow subsidiaries undertakings. The
outstanding loan balances and the interest charged on these loan balances are
presented in the table below:
Loans to Interest charged to
Six months ended 30 June 2007 2006 2007 2006
#000 #000 #000 #000
Fellow subsidiary undertakings 85,242 4,239 2,006 536
Chemetall PLC
Page 11
Notes to the interim financial report (continued)
Six months ended 30 June 2007
7. Acquisitions
On 19 February 2007 Chemetall PLC acquired the trade and assets of the chemical
division business of Wirral Fospray Limited for a consideration of #1,193,000.
The acquired business was integrated into the operations of Chemetall PLC.
All intangible assets were recognised at their respective fair values. Stock was
valued at its carrying value plus a fair value adjustment of #20,000 as detailed
below:
Carrying value Fair value Fair
pre-acquisition adjustments Value
#000 #000 #000
Non-current assets
Intellectual
property - 300 300
Non-compete
agreement - 50 50
Customer
relationships - 658 658
1,008 1,008
Current assets
Inventory
including step
up 180 20 200
Other
receivables 35 - 35
215 20 235
Current
liabilities (50) - (50)
Fair value of
net assets
acquired 165 1,028 1,193
Cash paid 1,193
No goodwill arose on this
acquisition.
This information is provided by RNS
The company news service from the London Stock Exchange
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