RNS No 2967q
TGI PLC
24 June 1999
TGI plc
("TGI" or "the Group")
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MARCH 1999
CHAIRMAN'S STATEMENT
The year to 31 March 1999 proved to be a most challenging one.
As announced in our trading statement issued on 29 January
1999 the Group's second half performance fell short of our
original expectations. The principal factors for the
shortfall were a significant short term decline in Hi-fi
business in the Far East, particularly China, coupled with a
sharp temporary downturn in demand within our European
automotive business. The continued strength of sterling was
unhelpful.
Against this background, I am able to announce that we have
met the revised expectations outlined in the trading statement
and are maintaining the final dividend. Furthermore, we end
the year with a strong balance sheet containing no net bank
borrowings.
This year has seen a number of significant changes:
* In our Hi-fi business we have focused all of our
endeavours on the Tannoy brand, closing Mordaunt-Short and
withdrawing from the GLL Hi-fi business. All costs associated
with these actions were provided for during the year.
* Our automotive business has established a manufacturing
plant in Hungary - our first production facility outside the
UK. The new plant is designed to improve our cost
competitiveness and to meet the strategic expectations of our
major automotive customers.
* We restructured Tannoy in October 1998 to lower
manufacturing overheads.
Turnover from continuing businesses was #43.7 million (1998:
#49.6 million) and reflected a reduction in both the
automotive division and our Hi-fi operations in the Far East.
The pre-tax loss for the period was #1.5 million (1998: profit
before tax #2.5 million), which included an exceptional loss
of #2.2 million arising from the closure of Mordaunt-Short.
The closure of Mordaunt-Short was announced in our interim
statement and the cost of closure, including #625,000 of
goodwill previously charged to reserves, was in line with our
original estimate given at that time. The exceptional cost of
closing Mordaunt-Short was partially offset by an exceptional
profit of #314,000 on the sale and leaseback of Tannoy's
Coatbridge facility.
The tax charge for the year to 31 March 1999 was mainly
attributable to irrecoverable ACT. Loss per share was 8.7p
(1998: earnings per share 9.1p).
Your Board is recommending an unchanged final dividend of
2.45p per ordinary share (1998: 2.45p) giving a total return
for the year of 3.65p per ordinary share (1998:3.65p). The
final dividend will be paid on 20 August 1999 to shareholders
on the register at the close of business on 23 July 1999.
Board
Edward Buchan has advised the Board that as a result of taking
up his new position as an executive director of WestLB Group
he is no longer able to serve as a non-executive director on
the Board of TGI. It is therefore with regret that he has
decided to stand down from the Board with immediate effect.
I would like to thank Edward for his contribution during his
tenure at TGI.
Employees
I would like to take this opportunity to thank all the Group's
employees for their continued efforts in this period of great
change.
Prospects
The current year has started well and the Group is trading
ahead of budget.
Having incurred substantial restructuring charges in the year
to 31 March 1999 and with signs of recovery in our major
markets we are confident of a significantly better result in
the current year.
Michael Windsor
CHAIRMAN
CHIEF EXECUTIVE'S REVIEW
It has been a difficult year for the Group and we have
responded by making a number of significant changes.
After a promising first half, we announced in January that we
would have a poor second half due to the combined impact of
the weakening Hi-fi market in the Far East and the short term
slow down in our automotive business. The results for the
year were also affected by the closure costs of Mordaunt-
Short.
We have, however, continued to invest in areas of our business
that offer good prospects for profitable growth. These
included Tannoy Hi-fi and Professional in North America,
Martin Audio in North America and the cinema loudspeaker
businesses of both Tannoy and Martin Audio. At the same time
we redoubled our efforts to lower our manufacturing costs
through improved material sourcing and design, a restructuring
of the Tannoy business and opening our new automotive speaker
facility in Hungary.
In addition, we decided to focus all of our Hi-fi efforts on
Tannoy, which is a genuine worldwide brand. In today's Hi-fi
separates market, we believe that secondary brands will remain
under long term pressure, and Mordaunt-Short's position was
further undermined by its substantial exposure to the Far
East. The continuation of Mordaunt-Short would have diluted
our Group focus and we therefore made the decision to close
the business and sell its assets.
As a Group we spent #1.4 million on Research and Development,
continuing new product programmes to ensure a regular flow
each year.
Professional
We continued to grow our sales in this market area, despite
tough conditions in our European markets and the continued
strength of sterling.
Sales of Martin Audio and Tannoy products in the UK were very
satisfactory and we gained market share during the year. In
North America, where market conditions were good, Tannoy had a
successful year and we believe that we also gained market
share. In addition, Tannoy Netherlands completed a large
contract for the ABN AMRO bank.
The flow of new product introductions continued, with Tannoy
launching an active version of the Reveal Monitor, very
successfully, as well as a number of new fixed installation
products.
Martin Audio launched the Wavefront Longthrow TM Series and
achieved THX approval from Lucas FilmsT for their cinema
series.
Audix had a successful year with continued growth in Customer
Services and the completion of the Lantau Crossing contract in
Hong Kong.
Hi-fi
After a successful first half, Tannoy encountered difficulties
during the second half of the year. Growth was achieved in
North America for the full year, but this was outweighed by
the impact of declining sales in the Far East and Europe.
Tannoy's new Mercury and Revolution products were launched
successfully and critical reviews were extremely
complimentary. However, we were disappointed with sales of
the Precision range and took the decision to replace it with
the Saturn range.
Whilst Japan and China fell short of our earlier sales
expectations in the period, we believe that the strength of
our Tannoy brand, our product ranges and our distribution
arrangements provide a good formula for future success. The
largest Far Eastern markets, Japan and China, have begun to
recover and Tannoy has a strong new product programme in place
for the new year.
Our progress in Eastern Europe and South America, both market
areas which we believe will become increasingly important in
the medium term, was interrupted somewhat by local economic
difficulties.
As mentioned earlier, we disposed of Mordaunt-Short and also
withdrew from the relatively small GLL Hi-fi business.
Automotive
We anticipated lower demand than the previous year in our
automotive business, as a result of customer model changeovers
and our decision to withdraw from two poorly performing
contracts. This proved to be a sensible move since total
sales were close to our forecasts. However, whilst demand in
the first half was well above our expectations, demand in the
second half was well below, as indicated in our trading
update.
During the year we successfully established a new production
facility in Hungary for volume manufacture of certain
products, giving us cost benefits as well as meeting the
strategic expectations of certain automotive customers for a
local presence in Eastern Europe.
GLL recently achieved QS9000 approval for its Havant
operations. This award is a quality standard which is
increasingly important to our international automotive
customers.
Having established our first international manufacturing
operation in Hungary we are now examining other similar
opportunities in the North American market.
Nigel Hamilton
CHIEF EXECUTIVE
Enquiries:
TGI plc (24/06/99) 0171 601 1000
Nigel Hamilton, Chief Executive (Thereafter) 01705 400090
Peter Russell, Finance Director
Square Mile Communications 0171 601 1000
Kevin Smith/James Melville-Ross
TGI plc
Consolidated Profit & Loss Account
for the year ended 31 March 1999
Year ended Year ended
31 March 31 March
1999 1998
#000 #000
Turnover
Continuing operations 43,651 49,607
Discontinued operations 1,112 2,380
-------- --------
Total turnover 44,763 51,987
Cost of sales (34,045) (39,384)
-------- --------
Gross profit 10,718 12,603
Distribution costs (4,641) (4,546)
Administration expenses (5,609) (5,335)
Other operating income 49 63
Operating profit/(loss)
Continuing operations 1,016 3,233
Discontinued operations (499) (448)
Total operating profit 517 2,785
Profit on the sale of fixed assets
- continuing operations 314 -
Loss on the termination of operations
- discontinued operations (2,195) -
-------- --------
(Loss)/profit on ordinary activities
before interest (1,364) 2,785
Net interest payable (172) (272)
-------- --------
(Loss)/profit before taxation (1,536) 2,513
-------- --------
Taxation
On exceptional items 87 -
Other (383) (516)
-------- --------
Total taxation (296) (516)
-------- --------
(Loss)/profit after taxation (1,832) 1,997
Minority interests (55) (15)
-------- --------
(Loss)/profit for the year (1,887) 1,982
Dividends (791) (798)
-------- --------
(Loss)/retained profit (2,678) 1,184
-------- --------
(Loss)/earnings per share (8.7)p 9.1p
Diluted (loss)/earnings per share (8.7)p 9.0p
Headline (loss)/earnings per share (0.4)p 9.1p
TGI plc
Consolidated Balance Sheet
at 31 March 1999
1999 1998
#000 #000
Fixed assets
Tangible assets 3,238 5,457
-------- --------
Current assets
Stocks and work in progress 6,450 6,856
Debtors 7,408 8,498
Cash at bank and in hand 260 520
-------- --------
14,118 15,874
Creditors: amounts falling due within
one year (7,043) (8,641)
-------- --------
Net current assets 7,075 7,233
-------- --------
Total assets less current liabilities 10,313 12,690
Creditors: amounts falling due after
more than one year (341) (439)
Provisions for liabilities and charges (83) (200)
-------- --------
Net assets 9,889 12,051
-------- --------
Capital and reserves
Share capital 217 219
Share premium account 5,352 5,332
Revaluation reserve - 645
Capital redemption reserve 604 601
Other reserves 596 596
Profit and loss account 2,923 4,516
-------- --------
Equity shareholders' funds 9,692 11,909
Minority interests 197 142
-------- --------
9,889 12,051
-------- --------
TGI plc
Consolidated Cash Flow Statement
for the year ended 31 March 1999
1999 1998
#000 #000 #000 #000
Operating activities
Net cash inflow from continuing
operating activities 2,801 6,403
Net cash (outflow) from
discontinued operating activities (715) (456)
------------------------------------
2,086 5,947
Returns on investments and
servicing of finance
Interest paid (116) (204)
Interest element of finance lease
repayments (56) (72)
Interest received 2 -
Non-equity dividends paid (27) -
------------------------------------
(197) (276)
Taxation (506) (474)
Capital expenditure
Purchase of fixed assets (1,048) (1,145)
Sale proceeds from fixed assets 17 14
Sale of Coatbridge building 1,766 -
------------------------------------
735 (1,131)
Disposals
Closure of Mordaunt-Short (820) -
Equity dividends paid (796) (775)
-------------------------------------
Net cash inflow before financing 502 3,291
Financing
Issue of ordinary share capital 21 53
Purchase of own shares (176) (55)
Capital payments on finance leases (460) (509)
Capital payments on bank loans (12) (10)
New long term loans - 84
------------------------------------
(627) (437)
(Decrease)/increase in cash (125) 2,854
Reconciliation of net cash flow to movement in net debt
1999 1998
#000 #000
(Decrease)/increase in cash in the year (125) 2,854
-------- --------
Cash flow from change in debt and
lease financing 472 435
Change in net debt resulting from
cash flows 347 3,289
New finance leases (140) -
Translation differences (14) 34
-------- --------
Movement in net debt in the year 193 3,323
Net debt as at 1 April 1998 (522) (3,845)
-------- --------
Net debt at 31 March 1999 (329) (522)
-------- --------
Notes:
1 The financial information set out above does not
constitute the Company's statutory accounts for the years
ended 31 March 1999 or 1998. The financial information for
1998 is derived from the statutory accounts for 1998 which
have been delivered to the Registrar of Companies. The
auditors have reported on the 1998 accounts, their report was
unqualified and did not contain a statement under Section 237
(2) or (3) of the Companies Act 1985. The statutory accounts
for 1999 will be finalised on the basis of the financial
information presented by the directors in this preliminary
announcement and will be delivered to the Registrar of
Companies following the Company's Annual General Meeting.
2 The tax charge for the year of #296,000 is mainly
attributable to irrecoverable ACT.
3 Loss/earnings per share have been calculated by reference
to loss for the financial year ended 31 March 1999 of
#1,887,000 (1998: #1,982,000 profit) and the weighted average
number of Ordinary shares in issue for the year of 21,718,576
(1998: 21,822,133).
Diluted loss/earnings per share have been calculated by
reference to loss for the financial year of #1,887,000
(1998: #1,982,000 profit) and the diluted weighted
average number of Ordinary shares in issue for the year
of 21,718,576 (1998: 21,957,883).
Headline loss/earnings per share excludes major non-
recurring items in accordance with the guidelines from
the Institute of Investment Management and Research.
4 The final dividend of 2.45p per Ordinary share will, if
approved, be payable on 20 August 1999, to shareholders
registered on 23 July 1999. The ex-dividend date is 19 July
1999.
5 The Annual Report and Accounts will be sent to
shareholders on or before 7 July 1999. Further copies
will be available from the registered office of TGI plc,
3 Ridgway, Havant, Hampshire, PO9 1JS.
END
FR FJMPBLLITBBL
Tgi (LSE:TGI)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
Tgi (LSE:TGI)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024
