RNS Number:6591X
Meriden Group PLC
31 January 2006
31 January 2006
Enquiries:
Russell Stevens 07860 562621
Chief Executive Russell@meriden-group.co.uk
Jonathan Wright 020 7107 8000
Seymour Pierce Limited
Meriden Group Plc (the "Company" or "the Group")
Preliminary results for the year ended 31 July 2005
Highlights
* During the year the Group made pre tax losses of #873,005 (2004: profit
#569,697) on a turnover of #8,891,713 (2004: #7,513,513)
* Sale of the Group's Publishing Division to its management and closure of
the Scottish branch of our Logistics Division.
* Results include both the trading losses of these activities which,
together with the costs of providing for closure, have been significant and
have therefore detrimentally impacted on our full year results.
* French logistics operation is currently being evaluated. The French
logistics operation, which traded at breakeven prior to the closure of our
Scottish operation, is continuing to incur significant losses in the current
financial year.
* The Employee Benefits Division which was launched last year has won and
continues to win, a large number of prestige clients.
* The remaining core divisions of IT solutions, Marketing &
Communications, Management Consultancy and Outsourcing have delivered
acceptable results.
Financial Highlights
* The operating profit on the Group's continuing activities of #101,710
have therefore been eliminated by the losses on the closing activities of
#879,455 resulting in an overall operating loss of #777,745
* Core business delivering sustained and resilient profits
* Final dividend for 2004/2005 of 0.006 pence per share.
* (Loss)/Earnings per share of (0.29) pence (2004 : 0.13 pence)
Commenting, Russell Stevens, Chief Executive said:
"Two of our 2004 acquisitions failed to perform and management has taken the
tough decision of closing these operations. Our remaining core divisions have
continued to be profitable during the financial year. Indeed our recently
acquired Employee Benefits division has now established itself and has announced
some major blue chip account wins, with more announcements to follow. Our loss-
making French Logistics business is currently being evaluated. However, the
basic building blocks for success are in place and as a result the group is
poised for a period of sustained growth and we look forward to the future with
confidence"
Chairman's Statement
I am pleased to present this, my 2005 Chairman's report for Meriden Group plc.
During the year the Group made pre tax losses of #873,005 (2004: profit
#569,697) on a turnover of #8,891,713 (2004: #7,513,513).
In my 2005 Interim Statement I referred to the Board's intention to divest of
non-core activities. During the second half of this year this process began with
the sale of the Group's Publishing Division to its management and with the
closure of the Scottish branch of our Logistics Division. Both these activities,
whilst growing, were trading unprofitably and the time needed to reach breakeven
could not be envisaged within a reasonable timescale.
The results for the year have been dominated by the trading losses of the
closing activities, which have therefore had a detrimental impact on our overall
full year results.
The operating profit on the Group's continuing activities of #101,710 have
therefore been eliminated by the losses on the closing activities of #879,455,
giving an overall operating loss of #777,745.
In the current year, the review of non-core activities will continue. In
particular, we are in the process of reviewing the final exit strategy for our
remaining French logistics operation. Meriden Logistics SARL traded at breakeven
prior to the closure of our Scottish operation, but is now incurring significant
losses during this financial year.
The Group was, until this year, profitable since floatation on AIM in 2001 and
the Board anticipate a return to profitability as soon as the losses on the
French operation have been eradicated.
The Employee Benefits Division which was launched last year has won and
continues to win a large number of prestige clients. However, the gestation
period between winning a contract and the point where income (under UITF 40) can
be recognised has meant that much of the profitability of these contracts cannot
be recognised until completion. This coupled with significant investment in
related support infrastructure has resulted in lower than expected results.
The remaining core divisions of IT Solutions, Marketing & Communications,
Management Consultancy and Outsourcing have delivered acceptable but
unspectacular results. However, the outlook for 2005/2006 is more encouraging
and significant and notable contracts have already been won by a number of these
divisions.
As referred to in our Interim Statement, the Board has recruited further key
executives to strengthen its Head Office function in advance of our planned
expansion and I am therefore pleased to report the appointment to the Board,
from 1 February 2006, of Mr. Craig J. Povey as Chief Operating Officer who has a
wide range of business expertise, most recently working as a consultant within
Orange PCS and Mr. James N. Brinton as Finance Director, which is an internal
promotion.
As I am sure many of our investors are aware our Chief Executive Officer Mr.
Russell Stevens had to take a period of compassionate leave to care for his
terminally ill wife. Unfortunately, Jane Stevens lost her battle with cancer in
October 2005 which necessitated Russell being out of the business for most of
the second half of the calendar year.
I am, however, pleased to report that he has now returned.
Despite the disappointing performance for the full year the Board has
nevertheless decided to recommend the payment of a final dividend for 2004/2005
of 0.006 pence per share.
The Board is delighted to welcome newcomers to the Meriden family and as always
we thank all of our staff for their hard work
Mr Derek Hall
Non-executive Chairman
30 January 2006
Consolidated Profit and Loss Account for the year ended 31 July 2005
Note Year ended Year ended
31 July 31 July
Closing Ongoing 2005 2004
# # # #
Turnover 4,187,423 4,704,290 8,891,713 7,513,513
Cost of sales (3,854,104) (3,864,771) (7,718,875) (5,655,567)
----------- ----------- ----------- -----------
Gross profit 333,319 839,519 1,172,838 1,857,946
Administrative expenses (1,212,774) (737,809) (1,950,583) (1,301,248)
----------- ----------- ----------- -----------
Operating (loss)/profit (879,455) 101,710 (777,745) 556,698
Interest receivable 712 14,815
Interest payable (95,972) (1,816)
----------- -----------
(Loss)/profit on ordinary
activities before taxation (873,005) 569,697
Taxation (12,805) (189,754)
----------- -----------
(Loss)/profit on ordinary (885,810) 379,943
activities after taxation
Dividends paid and proposed (49,700) (66,700)
----------- -----------
Retained (loss)/profit for (935,510) 313,243
the year
----------- -----------
Basic and diluted (loss)/ 2
earnings per share (pence) (0.29) 0.13
----------- -----------
Consolidated Balance Sheet as at 31 July 2005
Note As at As at
31 July 2005 31 July 2004
# #
Fixed Assets
Tangible assets 1,344,842 214,447
Fixed asset investments 177,853 177,853
----------- -----------
1,522,695 392,300
Current assets
Stocks and work in progress 134,220 263,032
Debtors 3,884,527 4,533,946
Cash at bank and in hand 400,049 285,152
----------- -----------
4,418,796 5,082,130
Creditors: amounts falling due
within one year (3,406,918) (3,524,209)
----------- -----------
Net current assets 1,011,878 1,557,921
----------- -----------
Total assets less current liabilities 2,534,573 1,950,221
Creditors: amounts falling due
after one year (939,062) -
Provisions for liabilities and charges (5,977) (5,977)
----------- -----------
Net assets 1,589,534 1,944,244
----------- -----------
Capital and reserves
Called up share capital 345,000 290,000
Share premium 1,049,155 523,355
Profit and loss account 195,379 1,130,889
----------- -----------
Equity shareholders' funds 3 1,589,534 1,944,244
----------- -----------
Consolidated Cash Flow Statement for the year ended 31 July 2005
Notes
Year ended Year ended
31 July 2005 31 July 2004
# #
Net cash (outflow) from operating activities 4 (394,329) (931,841)
Return on investments and servicing of finance
Interest received 712 14,815
Interest payable (95,972) (1,816)
------------ ------------
Net cash (outflow)/inflow from returns on
investments and servicing of finance (95,260) 12,999
Tax paid (74,138) (200,000)
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (1,349,925) (70,940)
Receipt from disposal of intangible fixed assets - 49
Receipts from the sale of tangible fixed assets - 9,214
------------ ------------
Net cash (outflow) from capital expenditure and
financial investment (1,349,925) (61,677)
Dividends paid (66,421) (66,597)
------------ ------------
Net cash (outflow) before financing (1,980,073) (1,247,116)
------------ ------------
Financing
Issue of ordinary shares for cash 580,800 -
New bank loans 1,272,507 -
Increase in invoice discounting loans 149,079 713,804
Capital element of finance lease rentals (964) -
------------ ------------
Net cash inflow from financing 2,001,422 713,804
------------ ------------
------------ ------------
Increase/(decrease) in cash 5 21,349 (533,312)
------------ ------------
Notes to the Preliminary Results for the year ended 31 July 2005
1 Accounting policies
Basis of accounting
The financial statements have been prepared in accordance with applicable
accounting standards and under the historical cost convention. The principal
accounting policies of the Group have remained unchanged from those set out in
the Group's 2004 annual report and financial statements.
Basis of consolidation
The Consolidated Profit and Loss Account, Balance Sheet and Cash Flow
Statement consolidates those of the Company and its subsidiary undertakings.
Intra-group transactions have been eliminated in full.
Tangible fixed assets and depreciation
Plant and machinery - 12.5% straight line
Motor vehicles - 25 - 33.33% straight line
Leasing and hire purchase commitments
Assets obtained under hire purchase contracts and finance leases are
capitalised as tangible assets and depreciated over the shorter of the lease
term and their useful lives. Obligations under such agreements are included in
creditors net of the finance charge allocated to future periods. The finance
element of the rental payment is charged to the profit and loss account so as
to produce constant periodic rates of charge on the net obligations
outstanding in each period.
Foreign currencies
Monetary assets and liabilities denominated in foreign currencies are
translated into sterling at the rates of exchange prevailing at the accounting
date. Transactions in foreign currencies are recorded at the date of the
transactions. All differences are taken to the Profit and Loss account.
On consolidation, assets and liabilities of foreign undertakings are
translated into sterling at year end exchange rates. The results of foreign
undertakings are translated into sterling at average rates of exchange for the
year.
Exchange differences arising from the retranslation at year end exchange rates
of the investment in foreign undertakings, less exchange differences on
foreign currency borrowings which finance these undertakings are taken to
reserves.
2 Earnings per share
The calculation of the basic earnings per share is based on the profit on ordinary
activities after taxation and on the weighted average number of shares in issue during
the period. The profit and weighted average number of shares used in the calculations
are set out below:
(Loss)/ Weighted Basic
profit average (loss)/
# number Earnings
of shares per share
(pence)
Basic and diluted
earnings per share:
Year ended 31 July (885,810) 301,000,000 (0.29)
2005
Year ended 31 July 379,943 290,000,000 0.13
2004
--------------- --------------- -----------
3 Reconciliation of movements in shareholders'
funds
Year ended Year ended
31 July 2005 31 July 2004
# #
(Loss)/profit on ordinary activities after (885,810) 379,943
taxation
Dividend (49,700) (66,700)
Share subscription 605,000 -
Share subscription costs (24,200) -
------------ ------------
(Loss)/profit on ordinary activities after (354,710) 313,243
taxation and dividends
Opening shareholders' funds 1,944,244 1,631,001
------------ ------------
Closing shareholders' funds 1,589,534 1,944,244
------------ ------------
4 Reconciliation of operating profit with net cash inflow from operating
activities
Year ended Year ended
31 July 2005 31 July 2004
# #
Operating (loss)/profit (777,745) 556,698
Depreciation 231,561 98,577
Decrease/(increase) in stocks and work in 128,812 (226,612)
progress
Decrease/(increase) in debtors 649,419 (1,126,309)
Decrease in creditors (626,376) (234,195)
------------ ------------
Net cash (outflow)/inflow from operating (394,329) (931,841)
activities
------------ ------------
5 Analysis of changes in net funds
1 August Cash Flow Other 31 July
2004 in Year Changes 2005
# # # #
Cash at bank and in hand 285,152 114,897 - 400,049
Bank overdraft (12,875) (93,548) - (106,423)
------------
21,349
Bank loans - (1,272,507) - (1,272,507)
Debt due within one year (713,804) (149,079) - (862,883)
Finance lease
and hire purchase - 964 (12,031) (11,067)
contracts
------------ ------------ ------------ ------------
(441,527) (1,399,273) (12,031) (1,852,831)
------------ ------------ ------------ ------------
6 Publication of non-statutory accounts
The financial information set out in this preliminary announcement does not
constitute statutory accounts as defined in Section 240 of the Companies Act
1985. The summarised balance sheet at 31 July 2005 and the summarised profit
and loss account, summarised cashflow statement and associated notes for the
year then ended have been extracted from the Company's 2005 statutory
financial statements upon which the auditors opinion is unqualified and does
not contain any statement under section 237 of the Companies Act 1985.
Statutory accounts for the year ended 31 July 2005 will be delivered to the
Registrar in due course. The comparative financial information is based on the
statutory accounts for the financial year ended 31 July 2004. Those accounts
on which the auditors issued an unqualified opinion have been delivered to the
Registrar of Companies.
7 Availability of Annual Report
The Annual Report has been posted to shareholders and copies will be
available from the registered office of the Company or as a download from the
Company's website at www.meriden-group.co.uk by 4.00pm on 31 January 2006.
8 Dividend
The Company intends to pay the final dividend of 0.006p per ordinary share on
12 May 2006 to shareholders on the register at the close of business on 10
February 2006. The dividend is subject to shareholder approval at the
forthcoming AGM, which is scheduled to be held at 11.00am on Tuesday 2nd May
2006 at Meriden House, 6 Great Cornbow, Halesowen, West Midlands, B63 3AB.
This information is provided by RNS
The company news service from the London Stock Exchange
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