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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
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
Contac:
Mr T G Dye (Chairman & Chief Executive) or 
Mr R Howard (Finance Director) 
Phone: +44/1462'437615.

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