Preliminary Results
April 03 2003 - 2:00AM
UK Regulatory
RNS Number:5788J
Chieftain Group PLC
03 April 2003
Chieftain Group plc
Preliminary Announcement of results to 31 December 2002.
Chairman's Statement
2002 Results
Despite the depressed economic climate in the United Kingdom and a resulting
reluctance of many clients to commit to significant capital projects during
2002, the group has performed well by achieving results close to expectations
and a five percent increase in pre-tax profit.
Overall turnover for 2002 was #14.8m compared with a turnover of #17.3m in 2001.
This reduction was caused not so much by a reduced intake of new orders but
more by delayed release of work from orders already on the books and delays in
agreeing final contract values. However pre-tax profit for 2002 has increased
to #774k compared to #738k in 2001 - an increase of five per cent. Basic
earnings per share increased from 5.74p per share in 2001 to 6.35p in 2002.
Dividend
The board recommends a final dividend of 1.5p per share bringing the total for
the year 2002 to 2.5p per share - unchanged from 2001.
Trading and Outlook
2002 is the third year of a planned three year transitional period of
diversification and expansion of the Group's contracting and manufacturing
activities. This period has seen the Group move from a loss making position in
the first year to increasing profits in the second and third years. It has also
established and consolidated its position in new markets and over the three year
period increased its order book value from #13.0 million at the end of 1999 to
#29 million at the end of 2002. The current order book includes several long
term contracts.
The Company has a long history of marine outfitting and has benefited greatly
from a resurgence of warship building for the Ministry of Defence in the recent
years. The Company is tendering for new work in this sector to major
shipbuilders in the UK which was initially expected to be awarded in 2002 but is
now anticipated to be in 2003.
The Company is still involved with work for the oil and gas industry although as
previously reported, activity levels are much reduced in this sector at the
present time.
The pipework fabrication and erection business of R Blackett Charlton Ltd, a
wholly owned subsidiary of the Group, has experienced a very busy year and has
contributed significantly to the overall Group result. The company has one of
the largest capacity pipe fabrication facilities in the UK and continues to
supply a high quality product to a range of blue chip UK Companies.
The Group has acquired useful experience in the provision and erection of
equipment to the power station industry over the past three years. Due to an
over supply in the UK and a low level of return the utilities are reluctant to
invest in new plant at the present time. This has had a negative influence in
this sector for the Group. However we continue to monitor the position and will
tender for new work in this sector when the corner is turned.
We established a new branch in the Republic of Ireland in 2000. This has had
its teething problems but we experienced an improvement in the second half of
2002 which we expect to continue through 2003.
The Group's Northern Ireland operation again produced excellent results from
what is now a very well established business with a highly flexible management
team. Whilst it has seen a decline in the traditional ship building industry it
has been able to diversify into other industrial sectors in the Province.
The Company's Environmental Services division which operates throughout the UK
from a base in Newcastle upon Tyne has expanded its operations during 2002
giving a satisfactory contribution to the Group's results. Further expansion
of the capacity of this division is currently under review.
Cash
As previously announced and as a result of moving into a trading sector with a
higher proportion of our turnover from a smaller number of major contracts the
demand on our cash resources is more variable. These demands are presently
greater than previously experienced and in order to allow the company to take
full advantage of trading opportunities and avoid restricting turnover,
additional cash has been made available to the company by way of unsecured
loans. These loans, which total #600,000, were made in August 2002 by the three
founding Directors; Anthony Fairlamb, William Taylor (Chief Executive) and
myself on normal commercial terms. (Interest will be payable at the same rate
as that currently charged to the Company by Barclays Bank). With the continued
support we enjoy from our bank we are adequately funded to meet our present
requirements.
It is anticipated that group's working capital requirements could reduce in 2003
as a result of commercial settlements being agreed on several current contracts.
Depending upon the timing of these settlements the financing costs could be
substantially reduced.
Development
As previously announced in January we have promoted three of our subsidiary
board directors onto the Group board. They are Mr Lawrence Adams, Mr Anthony
Cutchie and Mr Raymond Johnson. We believe this will strengthen the board by
bringing a wider range of knowledge and experience commensurate with the
diversification of the Group activities in the past three years. I look forward
to their input in steering the Group to bigger and better things, and wish each
of them every success in their enhanced roles.
The Board is confident of making further progress in 2003 and would like to
thank all employees for their efforts in achieving the 2002 results in very
challenging times.
P Wardle - Chairman 2 April 2003
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2002
Unaudited
2002 2001
-------- -------
#000 #000
TURNOVER 14,778 17,312
Cost of sales (11,288) (13,776)
-------- -------
GROSS PROFIT 3,490 3,536
Administration Expenses (2,583) (2,712)
-------- -------
OPERATING PROFIT 907 824
Interest receivable 1 3
Interest payable (134) (89)
-------- -------
PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION 774 738
TAX ON PROFIT ON ORDINARY ACTIVITIES (221) (238)
-------- -------
PROFIT ON ORDINARY ACTIVITIES
AFTER TAXATION 553 500
Dividends paid and proposed (218) (218)
-------- -------
TRANSFER TO RESERVES 335 282
-------- -------
BASIC EARNINGS PER SHARE 6.35p 5.74p
-------- -------
DILUTED EARNINGS PER SHARE 6.33p 5.73p
-------- -------
Statement of total recognised gains and losses
Profit for the financial year 553 500
Exchange rate adjustments offset in reserves 159 (8)
--------- -------
Total recognised gain for the year 712 492
--------- -------
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2002
Group Company
------------------------ ---------------------------
Unaudited Unaudited
2002 2001 2002 2001
-------- ------- -------- --------
#,000 #,000 #,000 #,000
FIXED ASSETS
Tangible assets 816 960 - -
Investments - - 40 40
-------- ------- -------- --------
816 960 40 40
-------- ------- -------- --------
CURRENT ASSETS
Stocks and work in
progress 3,847 2,891 7,288 5,601
Debtors 2,926 3,100 - -
Cash at bank and in
hand 213 171 - -
-------- ------- -------- --------
6,986 6,162 7,288 5,601
CREDITORS
Amounts falling
due
within one year (5,702) (5,471) (5,929) (4,361)
-------- ------ -------- --------
NET CURRENT ASSETS 1,284 691 1,359 1,240
-------- ------ -------- --------
TOTAL ASSETS LESS
CURRENT
LIABILITIES 2,100 1,651 1,399 1,280
CREDITORS
Amounts falling
due after more than one
year (61) (106) -
-------- ------ -------- --------
2,039 1,545 1,399 1,280
-------- ------ -------- --------
CAPITAL AND
RESERVES
Called up share
capital 436 436 436 436
Share premium
account 420 420 420 420
Profit and loss
account 1,183 689 543 424
--------- ------- --------- ---------
2,039 1,545 1,399 1,280
--------- ------- --------- ---------
CASH FLOW STATEMENT
FOR THE YEAR ENDED 23 DECEMBER 2002
Unaudited
2002 2001
-------------------- -----------------
#,000 #,000 #,000 #,000
NET CASH INFLOW/(OUTFLOW) FROM
OPERATING ACTIVITIES 659 (868)
RETURNS ON INVESTMENTS
AND SERVICING OF FINANCE
Interest received 1 3
Interest paid (120) (73)
Interest element of finance
Lease rental payments (14) (16)
-------
(133) (86)
TAXATION
Corporation tax paid (171) -
Corporation tax refund 10 55
------- -------
(161) 55
CAPITAL EXPENDITURE
Purchase of tangible fixed assets (24) (51)
Disposal of tangible fixed assets 15 19
------- -------
(9) (32)
EQUITY DIVIDENDS PAID (218) (174)
------- -------
138 (1,105)
MANAGEMENT OF LIQUID RESOURCES
Decrease in short
term cash deposits - 86
FINANCING
Capital element of finance
lease rental payments (139) (137)
------- -------
DECREASE IN CASH (1) (1,156)
------- -------
Notes:
1 Earnings per share
Basic and diluted earnings per share are based upon the profit on ordinary
activities after taxation.
Basic earnings per share is based upon 8,713,000 (2001 - 8,713,000 )
ordinary shares ( the weighted average number of shares in issue during
the year.)
Diluted earnings per share is based upon 8,733,813 (2001 - 8,726,000 )
ordinary shares (the weighted average number of shares in issue during the
year plus the weighted average number of dilutive options in issue during
the year.)
Dilutive options are the difference between the number of shares that
would have been issued at the option price and the number of shares that
would have been issued at fair value.
2 Dividend paid and proposed
2002 2001
#000 #000
Ordinary - interim paid 1.0p (2001 - 1.0p ) 87 87
- final proposed 1.5p (2001 - 1.5p ) 131 131
------- -------
218 218
------- -------
Record date 16 May 2003
Payment date 27 June 2003
3 The finance information set out above does not constitute the
Company's statutory accounts for the year ended 31 December 2002 and 2001.
The figures in the preliminary announcement have been taken from the
Groups draft financial statements for the year ended 31 December 2002
which will be finalised on the basis of the financial information
presented by the Directors in this preliminary announcement. Statutory
accounts for the year ended 31 December 2001 have been delivered to the
Registrar of Companies and the auditors' report on those accounts was
unqualified and did not contain a statement under section 237 of the
Companies Act 1985.
The statutory accounts for the year ended 31 December 2002 will be
delivered to The Registrar of Companies in due course.
4 The annual report and accounts will be posted to shareholders shortly and
thereafter copies of the report and accounts will be available from
the Secretary , Chieftain Group plc, Chieftain House, Walker, Newcastle
upon Tyne, NE6 3PJ.
For further information please contact :
Bill Taylor, Chief Executive 0191 2635544
Stan Elliott, Finance Director 0191 2635544
This information is provided by RNS
The company news service from the London Stock Exchange
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