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Chairman's statement
The Group had sales of £25.5 million in the six months to 31 December 2007, £0.1 million above the same period in the prior year. We recorded an operating loss for the six months of £1.3 million compared with a loss of £0.3 million in the previous year. The loss after taxation was £1.3 million compared with a loss of £0.5 million giving a loss per share of 17p (7p).
Although this is always the weaker part of the year this represents a serious deterioration in profitability compared to the results for the previous year. This is primarily due to the weakening US$ which slipped significantly compared to
prior year, continued raw material price increases, and substantial price pressure from our major customers.
The Navtec business is now almost completely integrated with the core Lewmar business so the commentary is
focused on the three Lewmar operating businesses in the UK and Europe, the US and Australia.
Lewmar’s UK and European operations had sales 2% below the same period in the prior year with very strong growth in aftermarket and custom sales more than offset by weak sales to the OEM market and reduced intercompany sales
to the US. The shortfalls were in winch, thruster and steering product sales. The order book at the end of December
was almost exactly in line with the previous year.
Lewmar Inc sales in US$ were 1% above the prior year but, impacted by exchange rates, sterling sales ended the first half 5% below the prior year. Weak boat builder sales particularly in the US sail boat market were more than offset by
a strong retail market, which was significantly ahead of the prior year. Lewmar Pty Ltd, our operation in Australia, has started the year well with sales (£1.3 million) more than double the previous year.
Significant progress has been made on the product developments side to relieve commercial pressures through cost
reductions and new product developments. Unfortunately little of this has contributed to the first half result. We have also been successful in reassigning the lease for the Cambuslang manufacturing facility thus resolving our last
outstanding onerous property lease. To further reduce future overhead costs the steering division is being relocated
from Luton to Havant in early 2008.
The immediate outlook for the second half is mixed. The initial trading has not been as strong as we hoped, however,
there are signs of a pick-up from this point.
Whilst debt repayment is a strategic priority, we have adequate financial resource for our present requirements. There
will be no interim dividend.
R M Swire FCA
Chairman
7 March 2008
The results are unaudited and have not been reviewed by the group auditors
| |
Notes |
6 Months
31 December
2007
£000 |
6 Months
31 December
2006
£000 |
12 Months
30 June
2007
£000 |
| TURNOVER |
|
25,483 |
25,382 |
58,115 |
| OPERATING (LOSS)/PROFIT |
|
(1,323) |
(318) |
2,050 |
| Net interest payable |
|
(485) |
(410) |
(756) |
| (LOSS)/PROFIT ON ORDINARY ACTIVITES BEFORE TAXATION |
|
(1,808) |
(728) |
1,294 |
| Tax on (loss)/profit on ordinary activities |
1 |
544 |
234 |
(423) |
| (LOSS)/PROFIT ON ORDINARY ACTIVITES AFTER TAXATION |
|
(1,264) |
(494) |
871 |
| BASIC (LOSS)/EARNINGS PER ORDINARY SHARE |
2 |
(17p) |
(7p) |
12p |
| DILUTED (LOSS)/EARNINGS PER ORDINARY SHARE |
2 |
(17p) |
(7p) |
12p |
The operating (loss)/profit and the (loss)/profit on ordinary activities after taxation have been computed on the historical cost basis.
All operations of the Group are regarded as continuing operations. |
| GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES |
| (Loss)/profit on ordinary activities after taxation |
|
(1,264) |
(494) |
871 |
| Exchange gains/(losses) on translation |
|
172 |
(434) |
(484) |
| TOTAL RECOGNISED (LOSSES)/GAINS RELATING TO THE PERIOD |
|
(1,092) |
(928) |
387 |
The results for the year ended 30 June 2007 are not statutory accounts. A copy of the statutory accounts for that year
has been delivered to the registrar of companies. The auditors report on those accounts was not qualified and did not
contain a statement under section 237 subsection 2 or 3 of the Companies Act 1985.
| The unaudited balance sheets are as follows: |
31 December
2007
£000 |
31 December
2006
£000 |
30 June
2007
£000 |
| FIXED ASSETS |
Intangible
Assets |
7,000 |
7,000 |
7,000 |
| |
Tangible
Assets |
5,172 |
6,041 |
5,381 |
| CURRENT ASSETS |
|
26,585 |
23,083 |
25,419 |
| CREDITORS - amounts falling due within one year |
|
17,937 |
14,846 |
15,141 |
| NET CURRENT ASSETS |
|
8,648 |
8,237 |
10,278 |
| TOTAL ASSETS LESS CURRENT LIABILITIES |
|
20,820 |
21,278 |
22,659 |
| CREDITORS - amounts falling due after one year |
|
4,361 |
4,873 |
4,858 |
| PROVISIONS FOR LIABILITIES |
|
1,321 |
1,490 |
1,571 |
| |
|
15,138 |
14,915 |
16,230 |
| CAPITAL AND RESERVES |
|
|
|
| Called up share capital |
|
1,881 |
1,881 |
1,881 |
| Share premium account |
|
3,913 |
3,913 |
3,913 |
| Capital reserve |
|
231 |
231 |
231 |
| Profit and loss account |
|
9,113 |
8,890 |
10,205 |
| SHAREHOLDER'S FUNDS |
|
15,138 |
14,915 |
16,230 |
Notes to the unaudited group results for the six months ended 31 December 2007 are as follows:
1. Taxation
The credit/(charge) for taxation reflects the anticipated effective rate for the year ending 30 June 2008 for the
Group. The effective rate of tax differs from the standard rate due to higher tax rate on overseas earnings and
other disallowable items.
2. Earnings per share
The basic earnings per share calculation is based on a loss of £1,264,000 (2006: loss of £494,000), being the
loss attributable to the ordinary shareholders divided by the weighted average number of 25p ordinary shares of
7,526,610 (2006: 7,526,610). No adjustment has been made to diluted EPS for out of the money share options as it is unlikely the options will be taken up.
3. Reserves
| |
|
Share Premium
£000 |
Capital Reserve
£000 |
Profit and
loss account
£000 |
| At 1 July 2007 |
|
3,913 |
231 |
10,205 |
| Loss for the period |
|
|
|
(1,264) |
| Exchange adjustment |
|
|
|
172 |
| At 31 December 2007 |
|
3,913 |
231 |
9,113 |
4. Results
This report has been circulated to all shareholders. Copies are available from the Company Secretary at
Southmoor Lane, Havant, Hampshire, PO9 IJJ. Telephone 023 92471841
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