DEWHURST GROUP PLC — Interim / Quarterly Report 2018

Jun 13, 2018

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RNS Number : 1824R

Dewhurst PLC

13 June 2018

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain. 

Dewhurst plc (the "Group")

Interim Results for the 6 months ended 31 March 2018

Directors' Interim Report

FIRST HALF

Although sales and profit fell in the first half of the year, on a constant currency basis and adjusting for a divested business, underlying sales were actually slightly up. Overall, Group revenue decreased by 5% to £24.7 million (2017: £26.1 million) and profit before tax decreased 4% to £2.8 million (2017: £3.0 million). Operating profit of £2.5 million (2017: £3.1 million) is down 19% on last year with earnings per share declining to 23.2p (2017: 25.8p).

As mentioned in the 2017 Full Year Statement, demand for keypads was weaker and this continued through the first half of 2018 and was the most significant contributor to the lower sales.  Another significant negative impact on the results was the strengthening of Sterling. The currency movements had a 5% negative impact on both sales and profits to the value of £1.0 million and £0.2 million respectively. In addition we sold the door and cab division of ERM which reduced sales by £1.1m in the period. Elsewhere, Canada continued its strong growth, the UK businesses varied but overall were up, and Australia also varied, but with a full half year contribution from P&R was also up in total.    

The Group balance sheet remains strong with cash at the period end of £18.0 million (2017: £16.0 million).

In the second half, after the date of the balance sheet reported here and as announced on 4 June 2018, Dewhurst acquired A. & A. Electrical Distributors Limited (A&A). The terms of the acquisition are set out in the announcement, but it will utilise a significant amount of the Group's free cash. However the acquisition is expected to be earnings enhancing in the second half.

OUTLOOK

In most of our markets the business climate seems to be reasonably positive at present.  The exception remains the UK where there is still some uncertainty about the short term and the economic situation is highly dependent on political decisions.  Although keypad sales have picked up a little in the last couple of months we do expect a declining trend on these products over the long term. However we expect to see a positive impact from the contribution of A&A.  Current exchange rate levels will continue to be a drag on the Group, more so if Sterling were to further strengthen.  The second half may see a period of consolidation, but on balance we are encouraged by the future growth prospects for the Group.

DIVIDENDS

The Directors have declared an interim dividend of 3.50p per ordinary share (2017: 3.50p) which amounts to £295,000 (2017: £295,000). The interim dividend is payable on 21 August 2018 and will be posted on 16 August 2018 to shareholders appearing in the Register on 6 July 2018 (ex-dividend date being 5 July 2018).

A final 2017 dividend of 8.50p (2016: 8.00p) which amounted to £716,000 (2016: £678,000) was approved at the AGM held on 8 February 2018 and was paid on 14 February 2018 to members on the register at 19 January 2018.

By Order of the Board

J C SINCLAIR

Finance Director & Secretary

12 June 2018

Dewhurst plc

The unaudited consolidated statement of comprehensive income, balance sheet, statement of changes in equity and cash flow statement of Dewhurst plc and its subsidiaries for the half-year ended 31 March 2018, as compared with the corresponding half-year ended 31 March 2017 and the year ended 30 September 2017, shows the following results:

Consolidated statement of comprehensive income

	Half year	Half year	Year
	ended	ended	ended
	31 March	31 March	30 September
	2018	2017	2017
Continuing operations	£000's	£000's	£000's
Revenue	24,669	26,070	52,890
Operating costs	(22,163)	(22,960)	(46,646)
Operating profit	2,506	3,110	6,244
Profit on business divestment 1	439	-	-
Finance income	52	52	117
Finance costs	(152)	(204)	(395)
Profit before taxation	2,845	2,958	5,966
Taxation	Est. (894)	Est. (773)	(1,345)
Profit for the financial period	1,951	2,185	4,621
Other comprehensive income:
Actuarial gains/(losses) on the defined benefit pension scheme	Est. (485)	Est. 1,009	3,672
Current tax effect	-	-	-
Deferred tax effect	82	(172)	(624)
Total that will not be subsequently reclassified to income statement	(403)	837	3,048
Exchange differences on translation of foreign operations	(1,393)	577	(104)
Deferred tax effect	237	(98)	18
Total that may be subsequently reclassified to income statement	(1,156)	479	(86)
Other comprehensive income/(expense) for the period, net of tax	(1,559)	1,316	2,962
Total comprehensive income for the period	392	3,501	7,583
Profit for the period attributable to:
Equity shareholders of the company	1,822	2,112	4,445
Non-controlling interests	129	73	176
	1,951	2,185	4,621
Total comprehensive income for the period attributable to:
Equity shareholders of the company	336	3,396	7,428
Non-controlling interests	56	105	155
	392	3,501	7,583
Basic and diluted earnings per share	23.16p	25.82p	52.65p
Dividends per share	3.50p	3.50p	12.00p

1 This relates to ERM selling its Winter & Bain division to Elevator Equipment Corporation

Dewhurst plc

Consolidated balance sheet

	Half year	Half year	Year
	ended	ended	ended
	31 March	31 March	30 September
	2018	2017	2017
	£000's	£000's	£000's
Non-current assets
Goodwill	4,252	4,829	4,575
Other intangibles	94	89	98
Property, plant and equipment	9,181	9,554	9,267
Deferred tax asset	1,850	2,086	1,641
	15,377	16,558	15,581
Current assets
Inventories	4,947	5,108	5,566
Trade and other receivables	9,873	11,275	10,011
Cash and cash equivalents	18,006	16,010	18,087
	32,826	32,393	33,664
Total assets	48,203	48,951	49,245
Current liabilities
Trade and other payables	5,139	5,824	5,567
Current tax liabilities	239	223	368
Short-term provisions	252	544	326
	5,630	6,591	6,261
Non-current liabilities
Retirement benefit obligation	11,716	14,890	11,751
Total liabilities	17,346	21,481	18,012
Net assets	30,857	27,470	31,233
Equity
Share capital	842	842	842
Share premium account	157	157	157
Capital redemption reserve	295	295	295
Translation reserve	886	2,481	1,969
Retained earnings	27,672	22,717	26,969
Total attributable to equity shareholders of the company	29,852	26,492	30,232
Non-controlling interests	1,005	978	1,001
Total equity	30,857	27,470	31,233

Dewhurst plc

Consolidated statement of changes in equity

For the period ended 31 March 2018

		Share		Share	Capital		Translation		Retained	Non	Total
		capital		premium	redemption		reserve		earnings	controlling	equity
				account	reserve					interest
		£(000)		£(000)	£(000)		£(000)		£(000)	£(000)	£(000)
At 1 October 2017		842		157	295		1,969		26,969	1,001	31,233
Profit for the period		-		-	-		-		1,822	129	1,951
Other comprehensive income and expense
Exchange differences on translation of foreign operations		-		-	-		(1,320)		-	(73)	(1,393)
Actuarial gains/(losses) on defined benefit pension scheme		-		-	-		-		(485)	-	(485)
Deferred tax effect		-		-	-		237		82	-	319
Total comprehensive income		-		-	-		(1,083)		1,419	56	392
Dividends paid		-		-	-		-		(716)	(52)	(768)
At 31 March 2018		842		157	295		886		27,672	1,005	30,857

For the period ended 31 March 2017

		Share		Share	Capital		Translation		Retained	Non	Total
		capital		premium	redemption		reserve		earnings	controlling	equity
				account	reserve					interest
		£(000)		£(000)	£(000)		£(000)		£(000)	£(000)	£(000)
At 1 October 2016		847		157	290		2,034		20,663	589	24,580
Profit for the period		-		-	-		-		2,112	73	2,185
Other comprehensive income and expense
Exchange differences on translation of foreign operations		-		-	-		545		-	32	577
Actuarial gains/(losses) on defined benefit pension scheme		-		-	-		-		1,009	-	1,009
Deferred tax effect		-		-	-		(98)		(172)	-	(270)
Total comprehensive income		-		-	-		447		2,949	105	3,501
Shares repurchased		(5)		-	5		-		(217)	-	(217)
Shares Issued 2		-		-	-		-		-	311	311
Dividends paid		-		-	-		-		(678)	(27)	(705)
At 31 March 2017		842		157	295		2,481		22,717	978	27,470

2 This relates to P&R Liftcars Pty Ltd selling shares to Roy Peat in proportion to his 25% non-controlling interest.

Dewhurst plc

Consolidated statement of changes in equity (cont'd)

For the year ended 30 September 2017

		Share		Share	Capital		Translation		Retained	Non	Total
		capital		premium	redemption		reserve		earnings	controlling	equity
				account	reserve					interest
		£(000)		£(000)	£(000)		£(000)		£(000)	£(000)	£(000)
At 1 October 2016		847		157	290		2,034		20,663	589	24,580
Profit for the year		-		-	-		-		4,445	176	4,621
Other comprehensive income and expense
Exchange differences on translation of foreign operations		-		-	-		(83)		-	(21)	(104)
Actuarial gains/(losses) on defined benefit pension scheme		-		-	-		-		3,672	-	3,672
Deferred tax effect		-		-	-		18		(624)	-	(606)
Total comprehensive income		-		-	-		(65)		7,493	155	7,583
Shares repurchased		(5)		-	5		-		(217)	-	(217)
Shares issued 2		-		-	-		-		-	311	311
Dividends paid		-		-	-		-		(970)	(54)	(1,024)
At 30 September 2017		842		157	295		1,969		26,969	1,001	31,233

2 This relates to P&R Liftcars Pty Ltd selling shares to Roy Peat in proportion to his 25% non-controlling interest.

These half-year abbreviated financial statements are unaudited and do not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006. The results for the year ended 30 September 2017 set out above are abridged.  Full accounts for that year reported under IFRS, on which the auditors of the Company made an unqualified report have been delivered to the Registrar of Companies.

The presentation of these Interim Financial Statements is consistent with the 2017 Financial Statements and its accounting policies, but where necessary comparative information has been reclassified or expanded from the 2017 Interim Financial Statements to take into account any presentational changes made in the 2017 Financial Statements or in these Interim Financial Statements.

Dewhurst plc

Consolidated cash flow statement

	Half year	Half year	Year
	ended	ended	ended
	31 March	31 March	30 September
	2018	2017	2017
	£000's	£000's	£000's
Cash flows from operating activities
Operating profit	2,506	3,110	6,244
Depreciation and amortisation	431	406	975
Additional contributions to pension scheme	(673)	(673)	(1,343)
Exchange adjustments	(706)	178	(49)
(Profit)/loss on disposal of property, plant and equipment	(9)	(9)	21
	1,549	3,012	5,848
(Increase)/decrease in inventories	619	(8)	(703)
(Increase)/decrease in trade and other receivables	138	(974)	290
Increase/(decrease) in trade and other payables	(428)	337	202
Increase/(decrease) in provisions	(74)	(10)	(228)
Cash generated from operations	1,804	2,357	5,409
Interest paid	-	-	(2)
Tax paid	(681)	(725)	(968)
Net cash from operating activities	1,123	1,632	4,439
Cash flows from investing activities
Acquisition of business and assets	-	(1,356)	(933)
Proceeds from business divestment 1	439	-	-
Proceeds from sale of property, plant and equipment	12	25	52
Purchase of property, plant and equipment	(554)	(601)	(978)
Development costs capitalised	-	-	(82)
Interest received	52	52	117
Net cash generated from/(used in) investing activities	(51)	(1,880)	(1,824)
Cash flows from financing activities
Issue of share capital - non-controlling interest element 2	-	311	-
Purchase of own shares	-	(217)	(217)
Dividends paid	(768)	(705)	(1,024)
Net cash used in financing activities	(768)	(611)	(1,241)
Net increase/(decrease) in cash and cash equivalents	304	(859)	1,374
Cash and cash equivalents at beginning of period	18,087	16,674	16,674
Exchange adjustments on cash and cash equivalents	(385)	195	39
Cash and cash equivalents at end of period	18,006	16,010	18,087

1 This relates to ERM selling its Winter & Bain division to Elevator Equipment Corporation

2 This relates to P&R Liftcars Pty Ltd selling shares to Roy Peat in proportion to his 25% non-controlling interest.

For further details please contact:

Dewhurst Plc                                                                                 Tel: +44 (0) 208 744 8200

Richard Dewhurst, Chairman

Jared Sinclair, Finance Director

www.dewhurst.plc.uk

Cantor Fitzgerald Europe                                                                Tel: +44 (0) 207 894 7000

David Foreman / Will Goode (Corporate Finance)

Alex Pollen (Sales)

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