RNS Number:3310F
Airbath Group PLC
19 December 2002
For Immediate Release 19 December 2002
Airbath Group plc
Interim Results Announcement
Airbath Group plc ("Airbath 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 2002.
Highlights of the Results:
* Profit before tax of #500,000
* Operating margins up 8.2%
* Interim dividend 0.1p
* Significant reduction in the level of net debt
* Aquabeau:
- Increased rollout of the Airbath(R) "Centres of Excellence"
- Apollo, the assisted bathing range, identifies opportunities for growth in this highly
fragmented market
* Brampton Housewares:
- Significant investment in additional sales and commercial staff moving away from third party
sales agencies
Regarding Prospects, Clive Gilham, Executive Chairman, commented: "Trading in
the third quarter, as indicated, has been affected by some short term problems
and the seasonal increase in sales has been slower than anticipated. Therefore
we remain cautious about our immediate sales outlook. Nevertheless, with
Aquabeau's focus now on growing market share and Brampton Housewares'
reorganisation due to be complete by the year end, we remain committed to our
long term objective of delivering organic growth in earnings per share."
For further information please contact:
Airbath Group plc
Clive Gilham Executive Chairman
Telephone: Tel: 020 7786 9600 (today), 01422 349401 (thereafter)
Binns & Co Public Relations
Sophie Morton/Keeley Clarke Tel: 020 7786 9600 (today), 0113 242 1171 (thereafter)
Mobile: 07812 356 442
CHAIRMAN'S STATEMENT
Financial Results
I am pleased to announce our interim results for the six months to 30 September
2002. These reflect the outlook advised in the 2001 Annual Report, which
suggested that trading in the first quarter would be a little below last year
and that was mainly as a result of changes in the product mix made at Brampton
Housewares.
The reported profit before tax of the Group of #500,000 was similar to the
adjusted pro forma pre-tax profit of #521,000 for the same period last year. The
operating profit of #656,000 was marginally below last year reflecting better
margins on lower sales. Operating margins of 8.2% were improved from 7.9% last
year reflecting more efficient use of staff and resources.
Actual Pro forma* Pro forma* year
six months ended six months ended ended 31 March
30 Sept 2002 30 Sept 2001 2002
(unaudited) (unaudited) (unaudited)
#'000 #'000 #'000
Turnover 8,039 8,568 16,497
Cost of sales (4,950) (4,982) (11,110)
Gross profit 3,089 3,586 5,387
Other operating expenses (net) (2,433) (2,907) (4,095)
Operating profit 656 679 1,292
Interest payable (net) (156) (158) (345)
Profit on ordinary activities before taxation 500 521 947
Tax on profit on ordinary activities (149) (147) (284)
Profit on ordinary activities after taxation 351 374 (663)
Preference dividend (100) (100) (200)
Profit attributable to ordinary shareholders 251 274 463
Basic earnings per share 0.99p 1.08p 1.82p
(* see note 8)
Since the half year date we have successfully negotiated a recovery from
Aquarius Group plc from claims arising under the demerger agreement, principally
relating to exceptional costs suffered by Brampton Housewares in the year ended
31 March 2002. This claim was settled on 31 October 2002 by a combination of
cancelling preference shares and waiving accrued dividends to a total value of
#250,000. This exceptional profit will be recognised in the full year results
and this leaves a total of #2,601,000 7% net cumulative preference shares in
issue.
Balance Sheet
The Group balance sheet at 30 September 2002 shows net liabilities of #1,023,000
(31 March 2002: #1,249,000), primarily due to the merger reserve created last
year. Net debt of #3,853,000 (31 March 2002: #4,349,000) was significantly
reduced and working capital initiatives, particularly involving better inventory
management, should contribute to further debt reduction (before the settlement
of exceptional costs referred to below).
Review of Operations
Aquabeau - turnover #4,920,000 (2001: #4,886,000 excluding discontinued
activities)
Aquabeau is now operating as one company with four principal product brands and
has seen a small increase in underlying sales during the period. The company has
now completely withdrawn from the high volume market and has begun to establish
'Centres of Excellence' across the UK. These centres have an increased number
of ranges on display and better knowledge and support, which help to promote the
advantages of the Airbath(R) brand. The response to these centres to date has
been positive and although the uptake in sales has been slower than we initially
expected, we are confident that this method of marketing and distribution will
lead to a greater market share in the long term.
The Appollo range of assisted bathing products experienced a drop in orders due
to its internal relocation and, during the third quarter, the change of some of
its suppliers, which has caused some disruption affecting sales. These problems
have now been overcome and we do not anticipate any further delays. We now
envisage opportunities for growth in this highly fragmented market. Meanwhile,
the Aquarius range has performed well in the period and we expect this success
to continue.
Aquabeau's strategy continues to focus upon expanding its range of high margin
products and strengthening its brands.
Brampton Housewares - turnover #3,120,000 (2001: #3,545,000)
Brampton Housewares now has a new management team with all manufacturing,
distribution and administration operating from its sole facility at Wisbech.
There has been significant investment in sales and commercial staff to
strengthen the business and it is moving away from using third party sales
agencies.
However, the benefits of this change will not be felt during this financial year
as onerous EU law concerning third party agents has forced us to pay
considerable severance costs which, together with other repositioning expenses,
will lead to exceptional costs of approximately #250,000 in the second half
period.
The Directors also recognise that changes to Brampton Housewares' market may
occur following the recent takeover of Homebase by Argos and we will be
reviewing the situation at the year end once we have a better understanding of
its implications.
Dividends
In light of the exceptional cash costs due in the second half and the more
uncertain marketplace in which Brampton Housewares operates, your Board has
decided to reduce the interim dividend as a matter of business prudence,
although we remain committed to a progressive dividend policy which reflects the
business's cash generative nature. Consequently, we are today declaring an
interim dividend of 0.10 pence per ordinary share from earnings of 0.99 pence
for the period ended 30 September 2002. This dividend will be paid on 27
January 2003 to shareholders on the register at close of business on 31 December
2002.
Strategy
The Group's strategy is to focus the existing niche businesses on their
profitable brands and product ranges, in particular Airbath(R) which has
significant opportunity to expand market share as the brand strengthens and also
with Appollo which operates in a highly fragmented market. An emphasis on
design and quality will continue to be supported by a culture of customer
service.
Prospects and Current Trading
Trading in the third quarter, as indicated, has been affected by some short term
problems and the seasonal increase in sales has been slower than anticipated.
Therefore we remain cautious about our immediate sales outlook. Nevertheless,
with Aquabeau's focus now on growing market share and Brampton Housewares'
reorganisation due to be complete by the year end, we remain committed to our
long term objective of delivering organic growth in earnings per share.
Clive Gilham
Executive Chairman
19 December 2002
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the six months ended 30 September 2002
Actual Pro forma six Actual 15 weeks
six months
ended 30 Sept months ended 30 ended 30 Sept
2002 Sept 2001 2001
(unaudited) (unaudited) (unaudited)
Notes #'000 #'000 #'000
Turnover 8,039 8,568 4,905
Cost of sales (4,950) (4,982) (2,741)
Gross profit 3,089 3,586 2,164
Other operating expenses (net) (2,433) (2,907) (1,625)
Exceptional costs - - (18)
Operating profit 656 679 521
Interest payable (net) (156) (158) (64)
Profit on ordinary activities before taxation 500 521 457
Tax on profit on ordinary activities (149) (147) (143)
Profit on ordinary activities after taxation 351 374 314
Preference dividends 5 (100) (100) (25)
Ordinary dividends 5 (25) (84) (184)
Retained profit for the financial period 226 190 105
Basic earnings per share 3, 9 0.99p 1.08p 1.14p
Fully diluted earnings per share 3, 9 0.99p 1.07p 1.13p
CONSOLIDATED BALANCE SHEET
as at 30 September 2002
30 Sept 31 March
2002 2002
(unaudited) (audited)
#'000 #'000
Fixed assets
Tangible assets 1,636 1,710
Intangible assets 3 3
Current assets
Stocks 1,696 1,724
Debtors 3,983 3,761
Cash 234 -
5,913 5,485
Creditors: amounts falling due within one year (5,156) (5,386)
Net current assets 757 99
Total assets less current liabilities 2,396 1,812
Creditors: amounts falling due after more than one year (3,249) (2,891)
Provisions for liabilities and charges (170) (170)
Net liabilities (1,023) (1,249)
Capital and reserves
Called up share capital 3,104 3,104
Share premium account 92 92
Other reserve (4,142) (4,142)
Profit and loss account (77) (303)
Shareholders' deficit (all equity) (1,023) (1,249)
CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 30 September 2002
Six months ended
30 Sept 15 weeks
ended 30 Sept
2002 2001
(unaudited) (audited)
#'000 #'000
Operating profit 656 521
Depreciation 181 112
Decrease/(increase) in stocks 28 (200)
(Increase)/decrease in debtors (222) 707
Decrease in creditors (16) (959)
Net cash inflow from operating activities 627 181
Returns on investment and servicing of finance (133) (30)
Taxation 164 -
Capital expenditure - net (107) (130)
Repayment of debt to Aquarius Group plc on the demerger - (5,602)
Equity dividends paid (99) (100)
Cash inflow/(outflow) before financing 452 (5,681)
Financing (159) 6,806
Increase in cash during the period 293 1,125
Reconciliation of net cash flow to movement in net debt Six months ended
30 Sept 15 weeks
ended 30 Sept
2002 2001
(unaudited) (audited)
#'000 #'000
Increase in cash in the period 293 1,125
Cash outflow/(inflow) from decrease/(increase) in debt and
financing leasing 203 (3,720)
Decrease/(increase) in net debt 496 (2,595)
Opening net debt (4,349) (1,811)
Closing net debt (3,853) (4,406)
NOTES TO THE INTERIM FINANCIAL INFORMATION
1. The interim results for the period ended 30 September 2002 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 period ended 31 March 2002 have been filed with the Registrar of Companies
and contain an unqualified audit report.
2. The interim results for the period ended 30 September 2002 have been prepared in accordance with the
accounting policies adopted in the accounts for the year to 31 March 2002.
3. The calculation of basic and fully diluted earnings per share for the six month period ended 30
September 2002 is based on profit after taxation of #251,000 divided by 25,408,461 1p ordinary shares,
being the weighted average number in issue during the period. There are no dilutive potential ordinary
shares in issue.
4. There were no recognised gains or losses other than the profit for the period.
5. Dividends for the period ended 30 September 2002 total #125,000 (2001: #184,000) and comprise an
interim dividend of 0.10p per ordinary share and preference dividends of #100,000. It is proposed
that the interim dividend will be payable on 27 January 2003 to all shareholders on the register at
close of business on 31 December 2002.
6. Copies of these interim results will be sent to shareholders.
NOTES ON THE PRIOR YEAR PRO FORMA RESULTS
7. Airbath Group plc was formed by demerger from Aquarius Group plc on 17 August 2001. The business
combination resulting from this demerger has been accounted for under the principles of merger
accounting.
8. The pro forma results for the six months ended 30 September 2001 and the year ended 31 March 2002
comprise the actual profits before exceptional items of Aquabeau and Brampton Housewares for those
periods and annualised pro forma head office and interest costs based on the actual costs incurred in
the post - demerger period.
9. The calculation of pro forma earnings per share for the six months ended 30 September 2001 is based on
profit after taxation of #275,000 divided by 25,408,461 (basic) and 25,738,461 (fully diluted)
ordinary shares. The pro forma earnings per share for the year ended 31 March 2002 has been
calculated based on profit after taxation of #463,000 and a weighted average number of shares of
25,408,461 (basic and fully diluted).
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.
CORPORATE ADDRESSES
Head and registered office Directors
Airbath Group plc Clive Gilham Executive Chairman
Crossley House Mike Dunn Finance Director
Belle Vue Park Glenn Powers Operations Director
Hopwood Lane Phillip Bennett Non-executive Director
Halifax HX1 5EB Alan Bottomley Non-executive Director
John Parkinson Non-executive Director
Tel: 01422 349401 Secretary Company Number
Fax: 01422 349396 Mike Dunn 4234495
Trading Companies
Aquabeau Limited
International House
Swinnow Lane
Bramley
Leeds LS13 4TY
Tel: 0113 255 6666
Brampton Housewares Limited
Broad End Industrial Estate
Broad End Road
Walsoken
Wisbech
Norfolk PE14 7BQ
Tel: 01945 476777
CORPORATE ADVISERS
Auditors Bankers Solicitors
KPMG Audit Plc Barclays Bank PLC Walker Morris
1 The Embankment PO Box 190 Kings Court
Neville Street Barclays House 12 King Street
Leeds LS1 4DW 3rd Floor Leeds LS1 2HL
6 East Parade
Leeds LS1 2UX
Nominated adviser Registrars Public Relations
Brown, Shipley & Co. Limited Northern Registrars Limited Binns & Co
One King Street Northern House 1st Floor
Manchester M2 6AW Woodsome Park Russell House
Fenay Bridge 15 St Paul's Street
Huddersfield HD8 0LA Leeds LS1 2JG
Broker
Brown Shipley Securities
Founders Court
Lothbury
London EC2R 7HE
This information is provided by RNS
The company news service from the London Stock Exchange
END
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