Aram Resources PLC - Final Results
30 Junio 1999 - 5:37AM
UK Regulatory
RNS No 6369q
ARAM RESOURCES PLC
30 June 1999
CHAIRMAN'S STATEMENT
I am pleased to report on the positive progress we achieved in 1998, our first
full year since flotation in September 1997. Operating profits for the period
were #667,000 on sales of #3,226,000, with profit before taxation of #363,000
giving earnings per share of 6.01p. The Board is recommending a final
dividend of 1p per share which, if approved, will be paid on 29 July 1999 to
those shareholders registered at the close of business on 16 July 1999. This
proposed dividend, together with the interim dividend of 1p brings the
total dividend in respect of the year to 2p per share.
Review
Considerable progress was made in 1998 in translating the strategy set out at
the time of our flotation into reality. As of today's date we have secured a
total of 6 wharf locations for the introduction of satellite coating plants to
be supplied by sea from the West of England Quarry and from third party
sources. At the time of flotation it was envisaged that 2 such sites would be
secured. Our detailed surveys proved that suitable wharves were even more
limited in availability than we had previously considered so we moved quickly
to secure these important resources. Having now secured a good strategic base
we will spend the next twelve months in developing and generating profits from
it.
To facilitate the development of our satellite coating plants on our wharves,
we have been successful in securing long term contracts to supply the
necessary raw materials to complement those from our own West of England
quarry. The materials concerned are secondary aggregates, a further example
of our commitment to basing strategy on environmental sustainability.
Offer letters were accepted for two government grants totalling some #1.3
million during 1998 to assist in our capital expenditure programme. This
fully justified our decision to delay development of the West of England
quarry pending the outcome of the grant applications. We were pleased to be
the first British company to be awarded a water freight facilities grant in
excess of #1 million. Grant assistance is available in the form of freight
facilities grants from the Department of Environment, Transport and the
Regions (DETR) to encourage companies to utilise water borne Transportation
to ease congestion on the already crowded road network. The environmental
objectives of the freight facilities grants are complementary to our strategy
of utilising sea transport to carry bulk commodities and as a result we
believe that further grant aid will be forthcoming for our wharf sites as
they are developed. Moreover, increasing taxes on road diesel will further
enhance our competitiveness. The possibility of an aggregates tax and the
integrated transport policy being followed by the government are both
areas which also offer us many advantages with our strategy of environmental
sustainability, our resource base and the locations of our sites.
Turnover at the long established Carnsew Quarry saw a growth of some 28% over
the previous year, aided by the introduction mid-year of a concrete plant. In
addition in the second half we also benefited from a contract to supply the
materials for the St Austell North East Distributor Road, the major new road
project in Cornwall last year. At the same time, stocks of raw materials were
built up to support the planned continued growth of the operation.
Trading in the second half of the year was in line with expectations.
The operating quarries were revalued to #15.6 million. The surplus arising
from the revaluation of #14.7 million has been transferred to reserves. Other
non-operational quarries have been retained at cost. These accounts do not
include any material value relating to our wharves. Formal valuations have
been conducted since the year end which indicate the open market value of
these wharves in their current stage of development is in excess of #7
million.
In March 1999 we acquired the issued share capital of Tregunnon Quarry
Limited. Tregunnon Quarry, based near Launceston, Cornwall, provides us with
an in-house strategic source of high PSV aggregate. It will also allow us to
increase our geographical spread in the South West and reduce our purchases of
imported materials.
In December 1998 we submitted a planning application to utilise the void space
created by our operations in the first part of Carnsew Quarry as a landfill
site suitable for domestic and commercial refuse. The planning process is
expected to take up to twelve months. The existing landfill sites in Cornwall
have limited remaining useful lives. We are currently in discussion with a
specialist landfill operator to exploit the potential of this considerable
opportunity. These proposed operations do not affect the continuing operation
of the quarry and its associated activities.
People
At the end of April we had to accept the resignation of one of our non-
executive directors, Darryl Whitehead. Darryl has accepted a senior position
with Grant Thornton, our company auditors, and as such was obliged to resign
by the rules of the Institute of Chartered Accountants in England and Wales.
He made a significant contribution to the group, both during the flotation and
thereafter, and on behalf of the Board I both thank him for this and wish him
every success in his new appointment.
In April 1999 Edward Dilley was appointed as non executive director. Edward
spent 40 years with Barclays Bank where in his final appointment he was the
Business centre Director of their Strand Branch. Since 1996 he has been
employed by Cable & Wireless plc in the role of Director Corporate Financial
Services.
We are pleased to announce today the appointment of Tom Baty as business
development director and Clive Scott as finance director. Tom joins us from
the Manchester Ship Canal Company Limited. He has a wealth of experience in
business development and wharfing operations. Clive, a Chartered Management
Accountant, joined us in January 1998 as financial controller following five
years with the TI Group plc.
The period of growth we are nurturing provides a demanding and stimulating
environment in which to work. I would like to take this opportunity of
thanking our loyal work force for the contribution they have made to this
growth.
Outlook
Trading in 1999 to date has been broadly in line with expectations. Quarried
material sales in the first quarter have been ahead of the same period last
year by some 23%. Trading conditions in the South West are currently
favourable and with the satellite plants planned to contribute to profits in
the second half, we look forward with confidence to the remainder of 1999.
GILES NIXON
Chairman
30 June 1999
ARAM RESOURCES PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the year ended 31 December 1998
Year to Nine months to
31 December 1998 31 December 1997
# #
Turnover 3,225,607 1,759,259
Cost of sales (2,038,253) (1,317,487)
___________ ___________
Gross profit 1,187,354 441,772
Administrative expenses (520,588) (246,928)
___________ ___________
Operating profit 666,766 194,844
Net interest (303,342) (169,359)
___________ ___________
Profit on ordinary activities
before taxation 363,424 25,485
Tax on profit on ordinary activities - (22,000)
___________ ____________
Profit for the financial period 363,424 3,485
Dividends (157,000) (14,647)
___________ ____________
Profit/(loss) transferred
to/(from) reserves 206,424 (11,162)
___________ ____________
Basic earnings per share 6.01p (0.23)p
___________ ____________
ARAM RESOURCES PLC
CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 1998
1998 1997
# #
Fixed assets
Tangible assets 19,591,491 2,924,435
Current assets
Stocks 1,732,466 526,079
Debtors 463,227 225,721
Cash at bank and in hand 408,598 720,368
__________ __________
2,604,291 1,472,168
Creditors: amounts falling due
within one year (2,537,141) (1,492,808)
__________ __________
Net current assets/(liabilities) 67,150 (20,640)
__________ __________
Total assets less current liabilities 19,658,641 2,903,795
Creditors: amounts falling
due after more than one year (3,519,142) (1,623,943)
__________ __________
16,139,499 1,279,852
___________ __________
Capital and reserves
Called up share capital 963,500 963,500
Share premium account 31,212 44,337
Revaluation reserve 14,666,348 -
Profit and loss account 478,439 272,015
___________ __________
Shareholders' funds 16,139,499 1,279,852
___________ __________
Equity shareholders funds 15,227,499 367,852
Non-equity shareholders funds:
Convertible preference shares 900,000 900,000
Deferred shares 12,000 12,000
___________ __________
16,139,499 1,279,852
___________ __________
The financial statements were approved by the Board of directors
on 30 June 1999.
R DAVID BINNS E C DILLEY
Director Director
NOTES:
1.Earnings per share
The figures for earnings per share are calculated on earnings
attributable to ordinary shareholders of #309,424 (1997: loss #11,162).
The basic earnings per share calculation is based on a weighted average
number of ordinary shares of 1p each in issue during the year of 5,150,000
(1997: 4,917,000).
2. The results contained in this preliminary statement do not constitute
statutory accounts as defined in section 240 of the Companies Act 1985, but
have been extracted from the statutory accounts for the financial year ended
31 December 1998. Comparative information is extracted from the statutory
accounts for the financial year ended 31 December 1997, which have been
delivered to the Registrar of Companies with an unqualified audit report
thereon.
3. The financial statements for the year ended 31 December 1998 will be
posted to shareholders today and filed with the Registrar of Companies in due
course.
END
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