RNS Number:9695Y
Airbath Group PLC
23 July 2002
For immediate release 23 July 2002
Airbath Group plc
Preliminary Results Announcement
Airbath Group plc (the "Company"), a specialist designer and manufacturer of
baths and bathwares, announces preliminary results for the 41 week period ended
31 March 2002.
Highlights of the Results:
Financial results for the 41 week period
• First preliminary results following demerger from Aquarius Group plc
and admission to AIM on 17 August 2001
• Profit before tax of £56,000, represents trading for the 41 week
period from incorporation on 14 June 2001 to 31 March 2002
• Final dividend of 0.33 pence per ordinary share, payable on 31 October 2002
• Total dividend for the year 0.66 pence per ordinary share
Pro forma full year results
• Operating profit before exceptional items £1,292,000
• Profit before tax £947,000
• Earnings per share before exceptional items 1.82p
• Total dividend covered by earnings 2.75 times
Operational
• Implementation of the Group's restructuring and reorganisation
programme.
• Formation of Aquabeau, specialising in spa baths, hydraulic and walk-in
baths, quality standard baths, shower trays and bath panels.
• Aquabeau - New management, increased investment in marketing and new
product development.
• Brampton Housewares, comprising a range of bathroom cabinets and
accessories.
• Brampton Housewares - New management and successful take up of new ranges
by key customers.
Commenting, Clive Gilham, Executive Chairman said: "With Aquabeau's
restructuring programme now complete and Brampton's repositioning underway, the
Company envisages a more promising outlook. We remain cautiously optimistic
about the sales prospects for Aquabeau whilst the continuing transformation of
Brampton will strengthen this business for the future. We remain committed to
our long term objective of delivering organic growth in earnings per share."
For further information please contact:
Airbath Group plc Telephone (Today) - 020 7786 9600
Clive Gilham, Executive Chairman Thereafter - 01422 349401
Binns & Co PR Telephone (Today) 020 7786 9600
Keeley Clarke/Sophie Morton Thereafter - 0113 242 1171
CHAIRMAN'S STATEMENT
I am delighted to present our maiden preliminary results following our demerger
from Aquarius Group plc and admission to the Alternative Investment Market ("AIM
") on 17 August 2001. In addition to the complex demerger process, this has
been a period of considerable change, consolidation and reorganisation for the
Airbath Group. Consequently the financial information within this statement has
been separated into an explanation of the actual financial results for the 41
week period followed by a pro forma full year results section. I would like to
thank all of our staff and employees for their continued and enthusiastic
support and commitment throughout this change process.
Airbath Group plc is a specialist designer and manufacturer of baths and
bathwares, operating under several well established brands - namely Airbath(R),
Aquarius Bathrooms, Appollo(R) and Brampton Housewares. The Group is recognised
as a quality manufacturing business based upon its reputation for design.
Following an exciting year in which we have seen the implementation of the
Group's restructuring and reorganisation programme, the management is pleased to
announce that the bath collection, comprising Airbath(R), Aquarius Bathrooms and
Appollo(R), will now be compositely grouped under the name "Aquabeau". Aquabeau
specialises in the design and manufacture of spa baths, hydraulic and walk-in
baths, quality standard baths, shower trays and bath panels. Brampton
Housewares, the bathware collection, continues to manufacture, assemble and
distribute a range of bathroom cabinets and accessories.
Financial Results for the Period
Airbath Group plc (the "Company") was incorporated on 14 June 2001 and was
admitted to AIM on 17 August 2001. The period being reported is the 41 week
period from incorporation on 14 June 2001 to 31 March 2002.
The reported profit before tax of £56,000 represents the trading of the Airbath
Group for the 41 week period. On 27 June 2001, the Company purchased Airbath
Holdings Limited, which itself had acquired the trading companies Airbath
International (UK) Limited, Aquarius Bathrooms Limited and Brampton Housewares
Limited, from Aquarius Group plc. This transaction was part of the demerger
strategy of Aquarius Group plc and has been accounted for using merger
accounting. The loss per share for the 41 week period was 0.67p.
Considerable changes have been implemented across the Group, which included
restructuring within all of our businesses, the strengthening of their
management teams and the closure of one production site and one administration
office.
Total exceptional costs for the period were £888,000. Of this, £405,000 was
incurred as a result of the above restructuring. The Directors have also
carried out a complete review of the business and decided that certain
provisions should be made for stock, rebates, customer returns and other
customer trading issues. These provisions have had the effect of increasing
exceptional costs by £177,000. In addition, £306,000 of costs relating to the
acquisition by the Group of its subsidiaries, which would have been capitalised
had acquisition accounting been applied, will be written off as exceptional
costs in the year due to the application of merger accounting.
Pro Forma Full Year Results
In order to give a clearer picture of the Group's trading performance, as we did
for the interim statement, we have provided below additional unaudited pro forma
information which shows the results of the Group as if it had been in its
current form for the full year ended 31 March 2002. These results comprise the
actual results of the trading companies for the year, annualised pro forma head
office costs based on the actual costs incurred in the post-demerger period and
annualised interest costs based on the level of debt immediately after the
demerger. All of the exceptional costs referred to above are excluded as well
as exceptional costs incurred prior to the Company's incorporation of £570,000
relating to provisions for stock, customer rebates of £385,000 and the cost of
moving into new product areas of £185,000.
Pro forma
Year ended
31 March 02
(unaudited)
£'000
Turnover 16,497
Cost of sales (11,110)
Gross profit 5,387
Distribution costs (802)
Administrative expenses (3,293)
Operating profit 1,292
Interest (345)
Profit before taxation 947
Taxation (284)
Profit after taxation 663
Dividends on preference shares (200)
Profit attributable to ordinary shareholders 463
Basic and fully diluted earnings per share 1.82p
On this pro forma basis, turnover for the year ended 31 March 2002 was
£16,497,000. Pro forma operating margins were 7.8% with pro forma operating
profits of £1,292,000.
Pro forma earnings per share were 1.82p based on a profit after taxation of
£663,000 and a weighted average number of shares for the period of 25,408,461
(basic and fully diluted). There are no dilutive potential ordinary shares.
Balance Sheet
In order to finance the demerger, the Group initially borrowed £4,500,000 and
issued redeemable preference shares to Aquarius Group plc of £2,850,000. This
level of debt was reduced by the issue of new ordinary shares on 17 August 2001,
and by trading cash flows. Net debt at 31 March 2002 was £4,349,000. The Group
balance sheet at 31 March 2002 shows net liabilities of £1,249,000, which is
primarily due to a merger reserve of £4,142,000 arising on the demerger of the
trading companies from Aquarius Group plc.
Dividend
It is our intention that shareholders benefit from the cash generative nature of
the Group with a progressive dividend policy. The management changes have led
to new initiatives which have incurred costs in the short term in order to
enhance the Group's long term prospects. Consequently, the final dividend will
be lower than indicated in the interim statement. Nevertheless we are pleased
to declare a maiden final dividend of 0.33p per ordinary share for the period
ended 31 March 2002. This will take the total dividend for the year to 0.66p
per ordinary share. The final dividend will be paid on 31 October 2002 to
shareholders on the register at close of business on 4 October 2002.
Review of Operations
Aquabeau - pro forma turnover £9,857,000
Aquabeau now operates uniformly as one company, under one new management team.
New managing and sales directors are now in place and a professional, marketing
orientated culture is being fostered. Manufacturing has been reorganised on just
two sites in Leeds and Halifax so that similar products are now produced from
the same site enabling synergy wherever possible.
The last year has seen a decline in sales mainly due to the planned exit from
the high volume, low margin standard bath sector as well as due to manufacturing
disruption attributed to the restructuring programme. The reorganisation
strategy has also resulted in the withdrawal of selected products which have not
met company expectations, enabling the management to focus more investment and
time on marketing and new product development, particularly within the Airbath
(R) and Appollo(R) collections.
The management team plans to both increase and improve its current Airbath(R)
dealer base by creating a network of "Centres of Excellence" across the UK.
Highlighting Aquabeau's new commercial focus, each centre will have a range of
products on display and will receive enhanced training and support.
Continuing Aquabeau's strategy of expanding its range of high margin products,
the management is now actively developing new products. Appollo(R), Aquabeau's
assisted bathing range, has pioneered an "airbathed" version of its new acrylic
walk-in-bath which was first demonstrated at the recent Interbuild trade
exhibition. Other developments are also underway to further add value to
existing ranges.
Brampton Housewares - pro forma turnover £6,640,000
Brampton Housewares has also experienced a major restructuring. With the
planned retirement of its founder and principal executive director in July 2002,
a new management team has been appointed, including new financial and sales
directors. Brampton has now closed its Welwyn office and all manufacturing,
distribution and administration are undertaken from its sole facility at
Wisbech.
Recognising a generally flat plastics market, Brampton has greatly increased
investment into its imported range of bathroom products made from alternative
materials, namely chrome, metal and wood. These new ranges have already been
successfully taken up by key customers and higher margin products are now being
introduced.
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 supported by a culture of customer service.
Prospects and Current Trading
Trading in the first quarter was a little below last year but in line with
expectations. With Aquabeau's restructuring programme now complete and
Brampton's repositioning underway, the Company envisages a more promising
outlook. We remain cautiously optimistic about the sales prospects for Aquabeau
whilst the continuing transformation of Brampton will strengthen this business
for the future. We remain committed to our long term objective of delivering
organic growth in earnings per share.
Clive Gilham
Executive Chairman
23 July 2002
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the 41 weeks ended 31 March 2002
Pre-exceptional Exceptional
items items Total
£'000 £'000 £'000
Turnover 12,885 - 12,885
Cost of sales (8,547) (145) (8,692)
Gross profit 4,338 (145) 4,193
Distribution costs (647) (32) (679)
Administrative expenses (2,513) (711) (3,224)
Operating profit/(loss) 1,178 (888) 290
Interest (234) - (234)
Profit before taxation 944 (888) 56
Taxation (302) 235 (67)
Profit/(loss) after taxation 642 (653) (11)
Dividends paid and proposed - preference shares (124) - (124)
- ordinary shares (168) - (168)
Retained profit/(loss) for the period 350 (653) (303)
Basic and diluted loss per share 0.67p
There are no recognised gains or losses in the period other than the loss for
the period.
CONSOLIDATED BALANCE SHEET
as at 31 March 2002
£'000
Fixed assets
Tangible assets 1,710
Intangible assets 3
Investments -
1,713
Current assets
Stock 1,724
Debtors 3,761
Cash -
5,485
Creditors: amounts falling due within one year (5,386)
Net current assets 99
Total assets less current liabilities 1,812
Creditors: amounts falling due after more than one year (2,891)
Provisions for liabilities and charges (170)
Net (liabilities)/assets (1,249)
Capital and reserves
Called up share capital 3,104
Share premium account 92
Other reserve (4,142)
Profit and loss account (303)
Shareholders' (deficit)/funds (1,249)
Shareholders' funds may be analysed as:
Equity interests (4,099)
Non-equity interests 2,850
(1,249)
CONSOLIDATED CASH FLOW STATEMENT
for the 41 weeks ended 31 March 2002
£'000
Net cash inflow from operating activities 674
Returns on investments and servicing of finance (304)
Taxation (237)
Capital expenditure (331)
Acquisitions and disposals - cash outflow relating to the merger (2,490)
Equity dividends paid (108)
Net cash outflow before financing (2,796)
Financing 3,240
Increase in cash in the period 444
£'000
Reconciliation of net cashflow to movement in net debt
Increase in cash in the period 444
Cash inflow from increase in debt and lease financing (2,985)
Non cash movements 12
Movement in net debt (2,529)
£'000
Opening net debt (1,820)
Closing net debt (4,349)
(2,529)
NOTES
1. ACCOUNTS
The foregoing statements do not constitute the Group's statutory accounts. The
Group's statutory accounts, on which the Company's auditors, KPMG Audit Plc,
have given an unqualified opinion in accordance with Section 235 of the
Companies Act 1985, are to be delivered to the Registrar of Companies and will
be sent to shareholders during August 2002. Additional copies of the statutory
accounts and this announcement will be available from the Companies registered
office: Crossley House, Belle Vue Park, Hopwood Lane, Halifax HX1 5EB.
2. EXCEPTIONAL ITEMS
Exceptional costs charged in arriving at the operating profit comprise:
41 weeks ended
31 March 2002
£'000
In respect of stock, rebates, customer returns and other customer trading 177
issues
In respect of management charges and restructuring, strengthening of
management teams and closure of one production site 405
In respect of demerger deal fees and costs 306
Exceptional costs before tax 888
Tax effect of exceptional items (235)
Exceptional costs after tax 653
The £306,000 of deal fees would have been capitalised as a cost of investment if
acquisition accounting, rather than merger accounting, had been applied.
3. DIVIDENDS
Dividends paid and proposed on equity and non-equity shares:
41 weeks ended
31 March 2002
£'000
Equity shares:
Interim paid of 0.33p per ordinary share 84
Final proposed of 0.33p per ordinary share 84
168
Non-equity shares:
7% preference dividend paid 25
7% preference dividend proposed 99
124
4. LOSS PER SHARE
The calculation of the basic and diluted loss per share of 0.67p is based on a
loss of £135,000 divided by the weighted average number of Ordinary shares in
issue during the period of 20,117,283. There are no dilutive potential ordinary
shares in issue.
5. AGM
The Annual General Meeting will be held at 11.30am on Tuesday 24 September 2002
at Crossley House, Belle Vue Park, Hopwood Lane, Halifax HX1 5EB.
Editor's Notes:
Airbath Group has four well-established brands:
• Airbath(R), which is the UK market leading brand of spa baths, which
is also applied to quality standard baths.
• Aquarius Bathrooms, which is applied to standard baths and shower
trays for the mid-priced sector of the market.
• Appollo(R), which is the assisted bathing brand applicable to a range of
products designed specifically for elderly, infirm and physically less able
users. These include baths with powered seats, walk-in baths and wheelchair
accessible shower trays.
• Brampton Housewares, which manufactures, assembles and distributes ranges of
bathroom products that are sold by DIY chains, supermarkets, catalogue
stores and other retail outlets throughout the UK and Europe.
Website: www.airbathgroup.co.uk
About the Airbath(R) system:
The Airbath(R) system is a patented system invented by the founder of Airbath
International which involves warm air being pumped through hundreds of tiny
holes in the base of the bath. The Airbath(R) offers a very different bathing
experience from those offered by other moving water systems, in particular
whirlpool baths. There are a number of features that set the Airbath(R) apart
from competing products:
• Unlike whirlpool baths, which typically have a small number of nozzles
through which water is pumped into the bath, each Airbath(R) has between 185
and 385 air jets to provide an "all over" massage effect;
• The Airbath(R) pumps warm humid air through the water (using its
patented warm air injection system), unlike some rival products which pump
cold air causing bath water to cool faster;
• The Airbath(R) is inherently more hygienic than whirlpool baths as
there is no danger of water from the last bath standing in the pipes between
baths. Airbath(R) are therefore particularly suited for hotels or other
locations where usage may be infrequent; and unlike whirlpool baths, which
will only work if the water is deep enough to cover the nozzles (which are
often fitted to the sides of the bath), an Airbath(R) will work with only a
very small amount of water covering the bottom of the bath. This makes
Airbaths(R) well suited for bathing young children.
This information is provided by RNS
The company news service from the London Stock Exchange
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