William Ransom & Son plc

Interim results for the six months to 30 September 2003 - Busines transformation process continues

London (ots) - William Ransom & Son plc, the natural healthcare company, announced today a pre-tax profit before amortisation of goodwill of £0.055m in its interim results to 30 September 2003 (pre-tax loss of £0.095m after amortisation of goodwill). The Directors have declared a dividend of 0.50p. In summary: · Turnover declined by 1.6% to £6.731 million (2002 £6.842m). · Profit before tax and amortisation of goodwill was £0.055m (pre-tax loss of £0.095m after amortisation of goodwill), compared to a pre-tax profit before tax and amortisation of goodwill of £0.056m in the first half last year. · Discussions with developers are progressing regarding the recently-announced proposed sale of the company's town centre site. · If confirmed, cash from the site sale will in part be used to fund further acquisitions. · Interim dividend unchanged at 0.50p (2002 0.5p). "Our objective is to build the UK's leading natural consumer healthcare business", said Chairman Timothy Dye. "The proposed move from our historic town centre site is a momentous decision and an important milestone in the transformation of the business which began three years ago. The establishment of a new Board and senior management team, as well as the move to AIM, have been a vital part of the successful implementation of the strategy to grow the Company through the acquisition and development of healthcare brands". The Board believes the Company is uniquely placed to take advantage of two major trends: the general increase in interest in natural healthcare solutions and the fact that multi-national pharmaceutical companies are mainly focussing on global consumer healthcare brands while divesting national brands, some of which Ransom is interested in acquiring. For further information please contact Mr T G Dye (Chairman & Chief Executive) or Mr R Howard (Finance Director) 01462 437615. Chairman's Statement On 15 October, I announced the Board's proposals to sell the company's historic Hitchin town centre site. Under the plans, pharmaceutical manufacture would be transferred to our pharmaceutical production facility at Witham, Essex, while extract production would be transferred to an industrial site in Hitchin. This is a momentous decision in the company's history. There is little doubt that, if confirmed, the planned move would be very beneficial to the company and its shareholders. The reorganisation would produce operational savings resulting from the consolidation of the company's pharmaceutical manufacturing activities onto one site. Cash from the sale of the 4.3 acre Hitchin property would be used for the continued growth of the Consumer Healthcare Division as well as for the expansion of the Witham site and the creation of a state-of-the-art botanical extraction facility in the Hitchin area. Staff in Hitchin would be affected however and it is intended that redundancies would be kept to a minimum by offering some employees the opportunity to transfer to another of the company's sites. The proposals represent an important milestone in the transformation of the business which began three years ago. As well as a new Board and senior management team and a move to AIM, the company has adopted and begun successful implementation of its strategy to become a natural consumer healthcare business through the acquisition and development - using its botanical expertise - of healthcare brands. Results In the six months to 30 September 2003, profit before tax and amortisation of goodwill was almost unchanged, at £55k (2002: £56k), from the comparable period last year. Sales declined slightly, by 1.6%, to £6,731k (2002: £6,842k). The Board has declared an unchanged dividend of 0.50p per share, payable on 9 January 2004 to those shareholders on the register on 19 December 2003. Operating Review Profit performance of the Consumer Healthcare Division (CHD) has been satisfactory so far this year, with a small overall decrease in branded sales off-set by improved cost control. The brands Metanium and Pavacol-D are performing particularly well. Radian B's UK sales, having been affected by significantly increased competitor advertising spend over the previous six months, have now begun to improve following the introduction of new product lines in September. Cariad's streamlined product range has delivered a good level of profitability. In the Pharmaceuticals and Natural Extracts Division (PNED), sales in the first six months were approximately at the same levels as those in the period to 30 September 2002. The company has already begun to take operational decisions to facilitate its proposed site move. In particular, it has terminated some contract and other business which is not intended for transfer to the Witham site. Financial Review The fall in gross profit to £1,777k (2002: £2,014k) - which is addressed by the business reorganisation plans - reflects the change in sales mix in the traditional business away from generic liquids and towards lower margin contract manufacturing. The effect was more than off-set by control of selling, distribution and administration costs, which amounted to £1,620k (2002: £1,878k). Net cashflow from operating activities improved to £353k (2002: £87k) largely due to improved debtor collections. The acquisition costs of £93k shown in the cashflow statement for the period relate to the acquisition of Pavacol-D that was completed in March 2003. A further £60k will be paid in November 2003. Site Sale Progress We have now received, through our property advisers, indicative offers to acquire our Hitchin site. The Board's initial view is that some of these offers are attractive enough for it to be able to pursue discussions with a short-list of developers. Potential Acquisitions The company continues to seek appropriate acquisitions both of privately-owned healthcare businesses and of consumer healthcare brands from multi-national pharmaceutical companies. We are in discussion with a number of potential vendors of licensed pharmaceuticals and healthcare brands which would extend the company's consumer product range extensively. Outlook The Consumer Healthcare Division is expected to continue to grow organically. We believe that there are also many profitable opportunities to expand the business significantly by acquisition. As I reported in my statement of 15 October, if the site sale plans are confirmed, the financial results for the years ending 31 March 2004 and 2005 would be materially affected by the exceptional items involved and by the necessary upheaval in the traditional (PNED) business. Over the medium term, the proposals are expected to produce great benefit for the company. Timothy Dye Chairman and Chief Executive William Ransom & Son plc Hitchin, Hertfordshire 17 November 2003 Profit and loss account For the six months For the year ended 30 September ended 31 March 2003 2002 2003 £'000 £'000 £'000 Turnover - continuing Operations 6,731 6,842 14,725 Cost of sales (4,954) (4,828) (10,277) --------- --------- ---------- Gross profit 1,777 2,014 4,448 Selling and distribution Expenses (1,117) (1,257) (2,136) Administrative expenses excluding goodwill Amortisation (503) (621) (1,570) ------- ------- --------- Operating profit before goodwill amortisation 157 136 742 Goodwill amortisation (150) (147) (294) ------- ------- --------- Operating profit/(loss) 7 (11) 448 Income from investments - - 7 Net interest and similar charges (102) (80) (186) (Loss)/profit on ordinary ------- ------- --------- activities before taxation (95) (91) 269 Tax on (loss)/profit on ordinary activities 14 12 (95) ---- ---- ------ (Loss)/profit on ordinary activities after taxation (81) (79) 174 Dividends (135) (132) (399) ------- ------- ------- Retained loss (216) (211) (225) ======= ======= ======= Earnings per share Basic (0.30p) (0.31p) 0.64p Diluted (0.30p) (0.31p) 0.64p Excluding goodwill Amortisation 0.26p 0.26p 1.73p Balance sheet at 30 September at 31 March 2003 2002 2003 £'000 £'000 £'000 Fixed Assets Intangible assets 5,448 5,612 5,556 Tangible assets 5,766 6,088 6,060 ------- ------- ------- 11,214 11,700 11,616 -------- -------- -------- Current Assets Stocks 3,634 3,647 3,316 Debtors 2,653 2,561 3,342 Investments 77 77 77 Cash at bank and in hand 162 215 105 ------ ----- ------ 6,526 6,500 6,840 ------ ------ ------ Creditors Amounts falling due within one year (3,148) (3,013) (3,566) --------- ------- ------- Net current assets 3,378 3,487 3,274 ------- ------- ------- Total assets less current Liabilities 14,592 15,187 15,640 -------- -------- -------- Creditors Amounts falling due after one year (2,189) (2,505) (2,266) Deferred taxation (566) (471) (566) ------- ------- ------- 11,837 12,211 12,058 ======== ======== ======== Capital and reserves Called up share capital 2,692 2,649 2,649 Shares to be issued - 318 176 Share premium account 4,221 4,090 4,093 Revaluation reserve 5 5 5 Profit and loss account 4,919 5,149 5,135 ------- ------- ------- 11,837 12,211 12,058 ======== ======== ======= Cash flow statement For the six months For the year ended 30 September ended 31 March 2003 2002 2003 £'000 £'000 £'000 Net cash inflow from operating activities 353 87 833 ----- ----- ----- Returns on investment and servicing of finance Interest received - 16 16 Interest paid (102) (96) (202) Dividend received on liquidation of associate - - 7 Net cash outflow from returns on investment and servicing ------- ------ ------- of finance (102) (80) (179) ------- ------ ------- Taxation Corporation tax received 2 33 33 ---- ------ ----- Capital expenditure Payments to acquire tangible fixed assets (22) (272) (496) Payments to acquire intangible assets (42) (827) (110) Receipts from sales of tangible fixed assets 6 14 10 ----- ----- ------ (58) (1,085) (596) ----- ------- ------- Acquisitions and disposals Payments to acquire trade (93) - (870) Equity Dividends Equity dividends paid - - (265) ----- ----- ------- Cash flow before use of liquid resources 102 (1,045) (1,044) ----- ------ --------- Management of liquid resources Cash flow on 1 month deposit - 1,000 1,000 ------- ------- -------- Financing Proceeds from new bank loan 200 - - Issue of ordinary share capital (240) - (115) Issue expenses for shares (5) (4) - ----- ----- ---------- (45) (4) (115) ------- ----- ------- Change in cash 57 (49) (159) ======== ======== ======= Notes 1. Basic earnings per share are based on the profit on ordinary activities after taxation and on 26,714,373 shares (2002 26,366,895 shares) the weighted average number of shares in issue during the period. The diluted earnings per share are the same as the basic earnings per share. 2. The results for the six months ended 30 September 2003 and 30 September 2002 are unaudited. They have been prepared on the basis of accounting policies expected to be adopted for the year ended 31 March 2004. The figures for the year ended 31 March 2003 have been extracted from the full accounts for that year which have been delivered to the Registrar of Companies and on which the auditors have given an unqualified report. 3. Reconciliation of operating loss with net cash inflow from operating activities For the six months For the year ended 30 September ended 31March 2003 2002 2003 £'000 £'000 £'000 Operating profit/(loss) 7 (11) 448 Depreciation 300 285 535 Amortisation and impairment of intangibles 150 147 294 Loss/(profit) on sale of tangible fixed assets 10 (14) (7) Increase in stocks (318) (749) (325) Decrease/(increase) in debtors 703 440 (374) (Decrease)/increase in creditors (499) 11 262 ------- ----- ------ 353 87 833 ====== ===== ====== 4. Analysis of net funds Change in cash 57 (49) (159) Change in liquid resources - (1,000) (1,000) Change in net debt 34 - 115 ----- ------ ----- Change in net funds 91 (1,049) (1,044) Opening net funds (2,638) (1,594) (1,594) (2,547) (2,643) (2,638) --------- --------- --------- Represented by Cash at bank and in hand 162 215 105 Cash on deposit - - - ----- ----- ----- 162 215 105 Debt within one year (520) (353) (477) Debt after one year (2,189) (2,505) (2,266) --------- --------- -------- (2,547) (2,643) (2,638) ========= ========= ======== 5. Copies of this interim report are being sent to shareholders. Further copies can be obtained from the company's registered office at 104 Bancroft, Hitchin, Hertfordshire SG5 1LY. This information is provided by RNS The company news service from the London Stock Exchange ots Originaltext: William Ransom & Son plc Internet: www.newsaktuell.ch Contac: Mr T G Dye (Chairman & Chief Executive) or Mr R Howard (Finance Director) Phone: +44/1462'437615.

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