RNS Number:7528G
Airbath Group PLC
22 December 2004
Airbath Group plc
Interim Results Announcement
Airbath Group plc (the "Group"), a specialist manufacturer and supplier of spa
baths, special needs baths, standard baths and bathroom products, announces
interim results for the period ended 30 September 2004.
Summary:
- Turnover up 7.4% on previous year
- Product mix and operational difficulties combined to cause a #98,000 loss
(2003: #148,000 profit)
Regarding Prospects, Phillip Bennett, Chairman, commented: "The main focus for
this year is to support Lawrence Warriner, the new Group Chief Executive, in
driving the Group forward and making it more efficient and profitable. Demand
for the Aquarius branded products continues to be good. There are early signs
of achieving better market penetration of our top-end products following a
reinvigorated implementation of the Group's Centres of Excellence policy for
Airbath branded products. Cost saving measures and stronger management
disciplines are being put in place, however, the increased cost of oil based raw
materials is causing strong upward pressure on material prices."
For further information please contact:
Airbath Group plc
Phillip Bennett Tel: 01422 349401
Chairman
Westhouse Securities LLP
David Simmons Tel: 0161 838 9140
CHAIRMAN'S STATEMENT
Financial Results
Our interim results for the six months to 30 September 2004 reflect a difficult
period. As reported in the 2004 Annual Report and Accounts, demand for the
Group's products in the first quarter of the current financial year was
encouraging but fell back in the second quarter particularly for more expensive
items. This reflected in part the market and in part the aftermath of the
ineffective implementation of the sales and marketing strategy mentioned in the
Annual Report. The shift in mix towards volume products with lower average
margins also caused operational difficulties within the business. Consequently,
the Group made a loss before tax of #270,000 compared to a profit of #11,000 for
the same period last year. The operating loss of #98,000 compares to last year's
profit of #148,000. Whilst this is not a satisfactory performance it does
indicate some improvement over the previous six months, ended 31 March 2004 in
which a loss before exceptional items of #143,000 was recorded.
Balance Sheet
The Group balance sheet at 30 September 2004 shows net liabilities of #1,367,000
(31 March 2004: #1,177,000), primarily due to the merger reserve created at the
time of the demerger of the Group from Aquarius Group plc in 2001. Net debt of
#4,091,000 (31 March 2003: #3,760,000) was #331,000 higher than 12 months
earlier.
Review of Operations
Aquabeau - turnover #4,840,000 (2003: #4,212,000)
Aquabeau specialises in the design and manufacture of spa baths, hydraulic and
walk-in baths, quality standard baths, shower trays and bath panels.
The shift in mix towards volume products with lower margins affected
profitability during the period.
Operational difficulties at Aquabeau's Halifax factory, which have been
exacerbated by the strong order intake, have contributed to the reduction in
margins. Cost saving measures and stronger management disciplines are being put
in place to address this.
Brampton Housewares - turnover #2,386,000 (2003: #2,517,000)
Brampton Housewares, the bathware collection company, continues to design,
manufacture, import, assemble and distribute a range of bathroom cabinets and
accessories.
Brampton Housewares has continued to suffer in an increasingly tough market with
consolidation amongst its customer base and aggressive price competition from
direct imports. A new range of products has been developed to target a broader
range of customers and this range is currently being introduced to the market.
Dividends
Owing to trading conditions, together with the deficit on profit and loss
reserves, no interim dividend will be paid this year (2003: #nil). During the
period, the Group accrued preference dividends of #91,000 (2003: #91,000) but
these cannot be paid and will not be paid in the foreseeable future. The cost
of this dividend has been recognised in the profit and loss account as a finance
cost and credited back through profit and loss reserves.
Strategy
The Group's strategy is to focus the existing niche businesses on their
profitable brands and product ranges. An emphasis on design and quality will
continue to be supported by a culture of customer service.
Prospects and Current Trading
The main focus for this year is to support Lawrence Warriner, the new Group
Chief Executive, in driving the Group forward and making it more efficient and
profitable. Demand for the Aquarius branded products continues to be good.
There are early signs of achieving better market penetration of our top-end
products following a reinvigorated implementation of the Group's Centres of
Excellence policy for Airbath branded products. Cost saving measures and
stronger management disciplines are being put in place, however, the increased
cost of oil based raw materials is causing strong upward pressure on material
prices.
Going Concern
As explained in the 2004 Annual Report and Accounts issued on 30 September 2004,
the Group is in breach of its banking covenants. All the bank facilities are
now repayable on demand and the revolving debt facility has been reduced. The
bank has not demanded repayment of its loans, which have been reclassified as
repayable in less than one year. The overdraft and invoice discounting
facilities have not been affected. There has been no fundamental change in the
Group's financial position since 30 September 2004. Therefore, the Directors
believe that it is appropriate that the financial statements continue to be
prepared on a going concern basis, subject to continuing bank support, as
before.
Phillip Bennett
Chairman
22 December 2004
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the six months ended 30 September 2004
Six months Six months Year
ended ended ended
30 Sept 30 Sept 31 March
2004 2003 2004
(unaudited) (unaudited) (audited)
Notes #'000 #'000 #'000
Turnover 7,226 6,729 14,003
Cost of sales (5,058) (4,301) (9,771)
Gross profit 2,168 2,428 4,232
Operating expenses (net)
- exceptional 6 (25) (10) (186)
- other (2,241) (2,270) (4,217)
Operating (loss)/profit (98) 148 (171)
Interest payable (net) (172) (137) (271)
(Loss)/profit on ordinary activities before
taxation (270) 11 (442)
Tax on (loss)/profit on ordinary activities 80 (3) 480
(Loss)/profit on ordinary activities after
taxation (190) 8 38
Preference dividends 5 (91) (91) (182)
Retained loss for the financial period (281) (83) (144)
Basic and fully diluted loss per share 3 (1.11)p (0.33)p (0.57)p
CONSOLIDATED BALANCE SHEET
as at 30 September 2004
As at As at As at
30 Sept 30 Sept 31 March
2004 2003 2004
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Fixed assets
Tangible assets 1,529 1,596 1,519
Intangible assets 3 3 3
1,532 1,599 1,522
Current assets
Stocks 1,625 1,852 1,570
Debtors 2,906 3,159 3,339
Cash - - 3
4,531 5,011 4,912
Creditors: amounts falling due within one year (7,323) (7,716) (7,504)
Net current assets (2,792) (2,705) (2,592)
Total assets less current liabilities (1,260) (1,106) (1,070)
Provisions for liabilities and charges (107) (101) (107)
Net assets (1,367) (1,207) (1,177)
Capital and reserves
Called up share capital 2,856 2,856 2,856
Share premium account 92 92 92
Other reserve (3,894) (3,894) (3,894)
Profit and loss account (421) (261) (231)
Shareholders' deficit (1,367) (1,207) (1,177)
CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 30 September 2004
Six months Six months Year
ended ended ended
30 Sept 30 Sept 31 March
2004 2003 2004
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Operating (loss)/profit (98) 148 (171)
Depreciation 190 178 372
(Increase)/decrease in stocks (55) (64) 218
Decrease in debtors 433 233 53
Decrease in creditors (464) (348) (280)
Net cash inflow from operating activities 6 147 192
Returns on investment and servicing of finance (154) (99) (244)
Taxation 17 104 86
Capital expenditure - net (200) (93) (210)
Cash inflow before financing (331) 59 (176)
Financing 105 (169) (176)
Decrease in cash in the period (226) (110) (352)
Reconciliation of net cash flow to movement in net debt
Six months Six months Year
ended ended ended
30 Sept 30 Sept 31 March
2004 2003 2004
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Decrease in cash in the period (226) (110) (352)
Cash (outflow)/inflow from decrease in debt and
financing leasing (96) 168 176
Non-cash movements (9) 9 (18)
(Increase)/decrease in net debt (331) 67 (194)
Opening net debt (3,760) (3,566) (3,566)
Closing net debt (4,091) (3,499) (3,760)
NOTES TO THE INTERIM FINANCIAL INFORMATION
1. The interim results for the period ended 30 September 2004 are unaudited and do not constitute statutory
accounts within the meaning of s.240 of the Companies Act 1985. The statutory accounts of Airbath Group
plc for the year ended 31 March 2004 have been filed with the Registrar of Companies and contain an
unqualified audit report.
2. The interim results for the period ended 30 September 2004 have been prepared in accordance with the
accounting policies adopted in the accounts for the year to 31 March 2004.
3. The calculation of basic and fully diluted loss per share for the six month period ended 30 September
2004 is based on loss after taxation and accrued preference dividends of #281,000 (2003: loss of
#83,000) divided by 25,408,461 1p ordinary shares (2003: 25,408,461), being the weighted average number
in issue during the period. The year to 31 March 2004 is based on loss after tax and accrued preference
dividends of #144,000 divided by 25,408,461 ordinary shares. There are no dilutive potential ordinary
shares in issue in any of the periods.
4. There were no recognised gains or losses other than the loss for the period.
5. Dividends for the period ended 30 September 2004 total #91,000 (2003: #91,000) and comprise accrued
dividends on the preference shares. The cost of this dividend has been recognised in the profit and
loss account as a finance cost and added back through profit and loss reserves.
6. Exceptional costs of #25,000 comprise product development costs (2003: #10,000 redundancy costs).
7. Copies of these interim results will be sent to shareholders.
This information is provided by RNS
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END
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