RNS No 6572h
A.H. BALL GROUP PLC
30th September 1998
A.H. BALL GROUP PLC
PRELIMINARY STATEMENT OF GROUP RESULTS
FOR THE YEAR ENDED 31ST MARCH 1998
--------------------------------------
CHAIRMAN'S STATEMENT
--------------------
RESULTS
------- THE GROUP'S CONTRACTING BUSINESS SUFFERED SEVERELY IN THE YEAR ENDED
31ST MARCH 1998 BOTH FROM THE FINANCIAL CONSEQUENCES OF THE PREVIOUS
YEAR'S LOSS MAKING CONTRACTS AND THE MATERIAL REDUCTION IN TURNOVER.
TURNOVER FELL TO #5,722,000 (1997:#9,081,000) AND THE OPERATING LOSS
FOR THE YEAR WAS #747,000 (1997:#682,000).
GROSS MARGINS, UNDER PRESSURE FROM MARKET FORCES AND CONSTRAINED BY
THE REDUCED TURNOVER, WERE INSUFFICIENT TO COVER OVERHEADS AND THE
INCREASING COST OF FINANCING EXCEPTIONALLY HIGH BORROWINGS. THE POOR
TRADING PERFORMANCE WAS AGGRAVATED BY THE NEED TO RESOLVE CONTRACT
CLAIMS, IN AN URGENT TIMESCALE AND FOR SETTLEMENT VALUES LESS THAN
THOSE PROVIDED FOR IN THE 1997 ACCOUNTS, SO AS TO REALISE ESSENTIAL
CASH FOR THE BUSINESS.
AS I REPORTED IN MY INTERIM STATEMENT HOWEVER, PROGRESS HAD BEEN MADE
ON THE PRINCIPAL ISSUES FACING THE GROUP. PROGRESS CONTINUES TO BE
MADE.
THE PROBLEM CONTRACTS WERE ALL CONCLUDED, AND BY THE END OF THE YEAR
ALL BUT ONE OF THE CONTRACT CLAIMS HAD BEEN RESOLVED. THE ONE
OUTSTANDING CLAIM HAS BEEN RESOLVED SUBSEQUENT TO THE YEAR END AT A
VALUE IN LINE WITH THE AMOUNT INCLUDED IN THE BALANCE SHEET AT 31ST
MARCH 1998. IN DECEMBER 1997 THE SALE OF THE FARNHAM HEAD OFFICE
SITE WAS COMPLETED AND REALISED A TOTAL CONSIDERATION OF #820,000
BEFORE COSTS OF DISPOSAL. PRIOR TO THE FINANCIAL YEAR END WE
ANNOUNCED THE RENEWAL, FOR A FURTHER PERIOD OF TWO YEARS, OF EACH OF
THE GROUP'S TWO PRINCIPAL PERIOD SCHEDULE CONTRACTS. WE ALSO
ANNOUNCED THE AWARD OF A MAJOR REHABILITATION CONTRACT THAT WILL
PROVIDE WORK FOR THE NEXT TWO YEARS. OVERHEADS AND OTHER COSTS WERE
REDUCED AND, WHILST STILL UNSATISFACTORY, THE LOSSES INCURRED DURING
THE SECOND HALF OF THE YEAR WERE SUBSTANTIALLY LESS THAN THOSE
REPORTED IN MY INTERIM STATEMENT. THE IMPROVEMENT HAS CONTINUED
SINCE THE YEAR END.
CASH
---- THE GROUP REFINANCING WHICH WAS APPROVED BY SHAREHOLDERS IN JANUARY
1998, TOGETHER WITH THE VARIOUS OTHER INITIATIVES TAKEN DURING THE
YEAR TO GENERATE CASH TO COMPENSATE FOR THE TRADING LOSSES SUFFERED,
COMBINED TO PRODUCE A NET INFLOW OF CASH DURING THE YEAR OF #801,000
(1997:OUTFLOW #474,000). AT 31ST MARCH 1998 #503,000 OF THIS HAS
BEEN PLACED ON FIXED TERM DEPOSIT.
THE FUTURE
---------- WITH THE BENEFITS OF THE REFINANCING IN PLACE AND THE CONTINUING
IMPROVEMENT IN THE GROUP'S TRADING PERFORMANCE, WE ARE NOW IN A
POSITION TO PURSUE THE STRATEGY PREVIOUSLY DECLARED.
THERE IS A NEED TO BROADEN OUR BASE OF ACTIVITIES THROUGH MAKING
ACQUISITIONS WHICH WILL HAVE THE POTENTIAL TO ENHANCE SHAREHOLDERS'
VALUE. EXCLUSIVE NEGOTIATIONS WITH ONE SUCH POTENTIAL INTEREST, TO
WHICH I REFERRED IN A STATEMENT ISSUED ON 4TH AUGUST 1998, HAVE
TERMINATED. CONSIDERATION IS PRESENTLY BEING GIVEN TO A NUMBER OF
OTHER SPECIFIC PROSPECTS.
WHILST THE TRADING PERFORMANCE OF THE CORE BUSINESS HAS IMPROVED TO
THE EXTENT THAT IT IS NOW TRADING PROFITABLY, ALBEIT AT A VERY LOW
LEVEL, YOUR BOARD CAME TO THE CONCLUSION THAT THE SIZE OF THE
BUSINESS IS NOW SUCH THAT IT SHOULD BE MERGED WITH A LARGER
CONTRACTING ORGANISATION. WE ANNOUNCED ON 4TH AUGUST 1998 THE
EXCHANGE OF CONTRACTS, SUBJECT TO SHAREHOLDERS' APPROVAL, FOR THE
SALE OF THE WATER CONTRACTING BUSINESS TO THISTLE PIPELINES LIMITED
FOR #100,000. DETAILS WILL BE CIRCULATED TO SHAREHOLDERS IN THE NEAR
FUTURE.
CORPORATE ADVISERS
------------------ WE RECENTLY APPOINTED ARTHUR ANDERSEN CORPORATE FINANCE AS ADVISERS
TO THE GROUP. I AM SURE THEIR INVOLVEMENT WITH THE BOARD IN PURSUING
ITS ACQUISITION STRATEGY WILL BE OF CONSIDERABLE BENEFIT TO THE
GROUP'S FUTURE DEVELOPMENT.
DIRECTORS
---------
ON 19TH JANUARY 1998, FOLLOWING THE APPROVAL OF SHAREHOLDERS OF THE
REFINANCING PROPOSALS, PETER HOWELL AND PETER COUSINS RESIGNED FROM
THE BOARD. ONCE AGAIN I WOULD LIKE TO EXPRESS MY APPRECIATION FOR
THEIR ENORMOUS CONTRIBUTION THROUGHOUT THIS DIFFICULT PERIOD TOWARDS
SECURING THE GROUP'S FINANCIAL POSITION. ALSO ON 19TH JANUARY 1998
BARRY ADAMS AND ROBIN JONES, WHO WERE RESPONSIBLE FOR THE REFINANCING
PROPOSALS, WERE APPOINTED TO THE BOARD AS NON-EXECUTIVE DIRECTORS.
STAFF
----- THE DIFFICULTIES EXPERIENCED IN THE PREVIOUS YEAR CONTINUED INTO, AND
INTENSIFIED DURING, THE YEAR UNDER REVIEW. THIS PLACED ENORMOUS
PRESSURE ON THOSE WHO REMAINED LOYAL TO THE COMPANY AND I WOULD LIKE
TO THANK ALL THOSE EMPLOYEES FOR THEIR CONTRIBUTIONS IN WORKING
THROUGH THE UNCERTAINTIES TO ACHIEVE A MORE STABLE FUTURE.
SIR JAMES HARVIE-WATT
CHAIRMAN
29TH SEPTEMBER 1998
PRELIMINARY STATEMENT OF GROUP RESULTS
FOR THE YEAR ENDED 31ST MARCH 1998
--------------------------------------
1998 1997
#000 #000
---- ---- TURNOVER 5722 9081 COST OF SALES (5276) (8743)
------ ------
GROSS PROFIT 446 338 ADMINISTRATION EXPENSES (1193) (1020)
------ ------
OPERATING LOSS ( 747) ( 682) INTEREST PAYABLE
AND SIMILAR CHARGES ( 145) ( 75)
------ ------
LOSS ON ORDINARY ACTIVITIES
BEFORE TAXATION ( 892) ( 757) TAXATION ON LOSS ON
ORDINARY ACTIVITIES - -
------ ------
LOSS ON ORDINARY ACTIVITIES
AFTER TAXATION TRANSFERRED
FROM RESERVES ( 892) ( 757)
------ ------
LOSS PER SHARE (PENCE) (3.97) (6.04) NOTES
----- (1) THE LOSS PER SHARE IS BASED ON 22,478,218 ORDINARY SHARES
(1997:12,523,481 ORDINARY SHARES AS RE-STATED FOR THE RIGHTS
ISSUE), BEING THE WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES IN
ISSUE DURING THE YEAR, AND ON THE LOSS AFTER TAXATION FOR THE
YEAR OF #892,000 (1997:LOSS #757,000).
(2) THE FINANCIAL INFORMATION ET OUT HEREIN DOES NOT COMPRISE FULL
FINANCIAL STATEMENTS WITHIN THE MEANING OF THE COMPANIES ACT
1985. FULL ACCOUNTS OF A.H. BALL GROUP PLC FOR THE YEAR ENDED
31ST MARCH 1997, ON WHICH THE AUDITORS GAVE AN UNQUALIFIED
REPORT,HAVE BEEN DELIVERED TO THE REGISTRAR OF COMPANIES. THE
ACCOUNTS FOR THE YEAR ENDED 31ST MARCH 1998 HAVE BEEN AUDITED AND
RECEIVED AN UNQUALIFIED REPORT BUT HAVE NOT YET BEEN DELIVERED TO
THE REGISTRAR OF COMPANIES.
(3) ALL OF THE GROUP'S ACTIVITIES ARISE FROM CONTINUING OPERATIONS.
(4) WITH THE EXCEPTION OF #234,000 UNREALISED SURPLUS ON REVALUATION
OF PROPERTY IN THE YEAR ENDED 31ST MARCH 1997, ALL RECOGNISED
GAINS AND LOSSES HAVE BEEN INCLUDED IN THE PROFIT AND LOSS
ACCOUNT.
(5) THERE IS NO MATERIAL DIFFERENCE BETWEEN THE RESULTS DISCLOSED IN
THE PROFIT AND LOSS ACCOUNT AND THE RESULTS ON A HISTORICAL COST
BASIS.
(6) THE ANNUAL REPORT AND ACCOUNTS IS BEING POSTED TO SHAREHOLDERS
AND COPIES WILL BE AVAILABLE AT THE COMPANY'S REGISTERED OFFICE:
MANOR BARN, HAWKLEY ROAD, LISS, HAMPSHIRE, GU33 6JS. CONSOLIDATED BALANCE SHEET
AT 31ST MARCH 1998
--------------------------
1998 1997
#000 #000 #000 #000
---- ---- ---- ---- FIXED ASSETS
TANGIBLE ASSETS 219 1387
INVESTMENTS - 21
---- ----
219 1408
CURRENT ASSETS
STOCK 208 159
DEBTORS 1171 2171
CASH AND BANK BALANCES 638 7
---- ----
2017 2337
CREDITORS : AMOUNTS FALLING
DUE WITHIN ONE YEAR 1507 3132
---- ----
NET CURRENT ASSETS/(LIABILITIES) 510 ( 795)
---- ---- TOTAL ASSETS LESS CURRENT LIABILITIES 729 613 CREDITORS : AMOUNTS FALLING DUE
AFTER MORE THAN ONE YEAR - 65 PROVISION FOR LIABILITIES AND CHARGES - 51
---- ---- ---- ----
NET ASSETS 729 497
==== ====
CALLED UP SHARE CAPITAL RESERVES 1829 454
SHARE PREMIUM ACCOUNT 318 569
REVALUATION RESERVE - 482
CAPITAL REDEMPTION RESERVE 10 10
PROFIT AND LOSS ACCOUNT (1428) (1018)
---- ----
(1100) 43
---- ----
SHAREHOLDERS' FUNDS 729 497
==== ==== SHAREHOLDERS' FUNDS INCLUDE #227,000 (1997:NIL) RELATING TO
NON-EQUITY INTERESTS. CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31ST MARCH 1998
----------------------------------
1998 1997
#000 #000 #000 #000
NET CASH (OUTFLOW)/INFLOW
FROM OPERATING ACTIVITIES ( 904) 144
RETURNS ON INVESTMENTS
AND SERVICING OF FINANCE
INTEREST PAID ( 139) ( 65)
INTEREST PAID ON FINANCE
LEASES AND HIRE PURCHASE
CONTRACTS ( 6) ( 10)
------ ------
NET CASH OUTFLOW FROM RETURNS
ON INVESTMENTS AND SERVICING
OF FINANCE ( 145) ( 75)
CAPITAL EXPENDITURE AND FINANCIAL
INVESTMENT
PURCHASE OF TANGIBLE
FIXED ASSETS ( 28) ------ ( 236) ------
SALES OF TANGIBLE FIXED
ASSETS 1001 15
SALE OF INVESTMENTS 19 -
------ ------
NET CASH INFLOW/(OUTFLOW)
FOR CAPITAL EXPENDITURE AND
FINANCIAL INVESTMENT 992 ( 221)
------ ------
( 57) ( 152)
ACQUISITIONS
PURCHASE OF UNDERTAKINGS'
ASSETS CONSISTING OF:-
TANGIBLE FIXED ASSETS - ( 126)
TRADE DEBTORS - ( 115)
STOCKS - ( 15)
------ ------ NET CASH OUTFLOW FOR ACQUISITIONS - ( 256)
------ ------
CASH OUTFLOW BEFORE USE OF
LIQUID RESOURCES AND FINANCING ( 57) ( 408) MANAGEMENT OF LIQUID RESOURCES
INCREASE IN CASH ON FIXED TERM
BANK DEPOSIT ( 503) -
------ ------
( 560) ( 408)
FINANCING
NEW SHARE CAPITAL
GROSS PROCEEDS OF SHARE
ISSUES 1390 -
ASSOCIATED COSTS ( 266) -
REDUCTION IN DEBT
SHORT TERM DEBT ( 135) ( 15)
CAPITAL ELEMENTS OF FINANCE
LEASE RENTAL PAYMENTS ( 131) ( 51)
------ ------
858 ( 66)
------ ------
INCREASE/(DECREASE) IN CASH 298 ( 474)
IN THE PERIOD ====== ======
END FROM
FISKE AND CO. LIMITED END FR NFXNNAAXPEFN
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