RNS Number:0293U
Mercury Recycling Group PLC
09 May 2008
MERCURY RECYCLING GROUP PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2007
Mercury Recycling Group PLC, the recycler of fluorescent light tubes and sodium
street lights, quoted on AIM, announces final results for the year ended 31
December 2007.
* Group sales up 10% to #2,657,000 (2006: #2,399,000)
* Operating profit (before exceptional items) up 43% to #479,000 (2006:
#336,000)
* Profit before tax of #445,000 (2006: #84,000 profit)
* Earnings per share (basic) up 319% to #1.09p (2006: #0.26p)
* Growth achieved following implementation of WEEE Directive in July
2007
* Announcement of completion of acquisition of Envirolite Limited in May
2008
Enquiries:
Simon Lebor, Group Chief Executive
Mercury Recycling Group PLC Tel: 0161 877 0977
John Wakefield, Director, Corporate Finance
Blue Oar Securities Plc Tel: 0117 933 0020
CHAIRMAN'S STATEMENT
I am pleased to report considerable progress for the year ended 31 December
2007. Sales increased by just over 10% to #2,657,000 from #2,399,000 in 2006.
Operating profits increased by over 40% to #479,000 from #336,000 demonstrating
the profit potential as sales continue to grow. As can be seen, the Group
Balance Sheet shows a strong liquid position, with current assets increasing to
#1,052,000 from just #668,000 in 2006.
In the light of the Group's strong financial position, the Directors had hoped
to pay a dividend this year. However, because there is an historical adverse
balance in our distributable reserves, this is not technically possible for this
year. Subject of course to results being satisfactory, we would be proposing to
recommend a dividend next year. Thereafter, it would be the intention that we
pursue a progressive dividend policy in line with growth in earnings per share.
The results are especially pleasing given, as stated previously, the
considerable confusion following the late implementation of the WEEE Directive
in July 2007. However the position is now much clearer, and has resulted in our
being allocated additional recycling areas across the country.
I am confident of the Group's future prospects, since we estimate that still
only some 30% of the approximately 130 million lamps a year are being recycled.
As it is now illegal to landfill lamps and other WEEE products, we can expect a
larger throughput for which we have the capacity. We are also seeing growth in
our recycling of other products such as batteries and electrical items, although
we expect the main increase will still come from our growing share of the lamp
recycling sector. I am therefore pleased to report that Management figures for
the first 3 months of 2008 are in line with expectations, although of course
there will be competition and price pressures.
We have been seeking further expansion by a suitable acquisition. I am pleased
that following lengthy negotiations we completed the acquisition of Envirolite
Limited and its associated companies, a complementary grouping in the waste
recycling sector, on 7 May 2008. The consideration of #1.1 million was funded
entirely from our own resources. This will open up new geographic areas for our
operation, and we expect the acquisition will be earnings enhancing from the
current financial year.
Finally, I would again like to thank my colleagues and all our staff for their
hard work and dedication that has made our present position possible.
Yours sincerely,
The Rt Hon The Lord Barnett JP PC
Chairman
CONSOLIDATED INCOME STATEMENT
As restated
2007 2006
Note
#'000 #000
Revenue 2
2,657 2,399
Cost of sales
(173) (193)
Gross profit
2,484 2,206
Administrative expenses
(2,023) (2,096)
Operating profit before share based payment
costs and impairment
479 336
Share based payment costs
(18) (22)
Goodwill impairment
- (204)
Group operating profit 3
461 110
Investment revenues
7 1
Finance costs
(23) (27)
Profit on ordinary activities before taxation
445 84
Taxation
(79) -
Profit on ordinary activities after taxation
retained for the year
366 84
Earnings per share - Basic 4
1.09p 0.25p
- Diluted 4
1.07p 0.24p
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
2007 2006
#'000 #000
New share issued
- 37
Share based payment costs
18 22
Net income recognised directly in equity
18 59
Profit for the period
366 84
Total income and expense for the period
384 143
Opening balance
4,175 4,032
Closing balance
4,559 4,175
CONSOLIDATED BALANCE SHEET
As restated
2007 2006
#'000 #'000
Non-current assets
Goodwill
3,021 3,021
Other intangible assets
1 2
Property, plant and equipment
1,158 1,140
4,180 4,163
Current assets
Trade and other receivables
673 533
Cash and cash equivalents
379 135
1,052 668
Total assets
5,232 4,831
Current liabilities
Trade and other payables
(265) (265)
Obligations under finance leases
(7) (21)
Bank overdrafts and loans
(28) (26)
(300) (312)
Non-current liabilities
Trade and other payables
(60) (73)
Bank loans
(233) (259)
Deferred tax liabilities
(79) -
Obligations under finance leases
(1) (12)
(373) (344)
Total liabilities
(673) (656)
Net assets
4,559 4,175
Capital and reserves
Share capital
3,373 3,373
Share premium
242 242
Other reserve
365 365
Retained earnings reserve
579 195
Equity shareholders' funds
4,559 4,175
CONSOLIDATED CASH FLOW STATEMENT
As restated
2007 2006
#'000 #'000
Net cash from operating activities
471 377
Investing activities
Interest received
7 1
Purchases of property, plant and equipment
(201) (96)
Net cash used in investing activities
(194) (95)
Financing activities
Proceeds on issue of shares
17 20
Repayment of loans
(26) (15)
Repayments of finance lease obligations
(24) (24)
Net cash used in financing activities
(33) (19)
Net increase in cash and cash equivalents
244 263
Cash and cash equivalents at the beginning of year
135 (128)
Cash and cash equivalents at end of year
379 135
NOTES
1. Basis of preparation
IFRS 1 'First Time Adoption of International Financial Reporting Standards'
(IFRS 1) sets out the rules for an entity preparing its first IFRS financial
statements. The entity is required to determine the IFRS accounting policies in
accordance with the IFRS that are in place at the date of transition (1 January
2006) and, in general, apply them retrospectively. There are a number of
possible exemptions from the retrospective application to assist the entity in
making the transition. The Group has taken the following exemptions:
a) Business combinations: the Group has elected not to restate business
combinations prior to the transition date (1 January 2006).
b) Share-based payments: the Group has elected to exclude share-based
arrangements that were granted prior to 8 November 2002 or that have vested
prior to the transition date.
The Financial Statements have been prepared in accordance with International
Financial Reporting Standards (IFRSs). The Financial Statements have also been
prepared in accordance with IFRSs adopted by the European Union and therefore
the Group Financial Statements comply with Article 4 of the EU IAS Regulation.
2. Revenue
The revenue and profit on ordinary activities before taxation arise from the
Group's principal activity.
The Group's revenue has been analysed by geographic area as follows:
2007 2006
#'000 #'000
United Kingdom
2,641 2,373
Republic of Ireland
16 26
2,657 2,399
3. Profit for the year
2007 2006
Profit for the year is shown after charging / (crediting):
#'000 #'000
Depreciation on tangible assets
183 145
Amortisation
1 -
Impairment of goodwill
- 204
Government grants
9 9
Profit on disposal of tangible assets
- (1)
Fees paid to the auditor analysed as follows:
Audit fees (Group excluding holding company)
6 6
Audit fees (Holding company)
4 4
Tax consultancy
4 3
Other review reports
6 5
4. Earnings per share
Basic - The calculation of basic earnings/(loss) per share is based on a profit
of #366,000 (2006 - #84,000) and on 33,726,154 (2006 - 33,543,000) ordinary
shares, being the weighted average number of ordinary shares in issue during the
year.
Diluted - The diluted earnings per share is based on the profit for the year of
#366,000 and on 34,303,098 ordinary shares as adjusted for share options below:
2007 2006
#'000 #'000
Basic weighted average number of shares
33,726,154 33,543,000
Dilutive potential ordinary shares:
Dilution caused by options
576,942 797,291
Diluted weighted average number
34,303,096 34,340,291
5. Post balance sheet events
On 7 May 2008 the group acquired Envirolite Limited and its associated companies
a complementary grouping in the waste recycling sector. The consideration of
#1.1 million was funded from own resources.
6. Annual General Meeting
The Annual General Meeting of Mercury Recycling Group Plc will be held at Suite
One, Courthill House, 66 Water Lane, Wilmslow, Cheshire SK9 5AS on Friday 13
June 2008 at 10:00 am.
This information is provided by RNS
The company news service from the London Stock Exchange
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