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1st March 2003
"Although the company has announced a loss after tax the adjusted profits confirm the recovery envisaged 12 months ago. This has been achieved despite a continuing difficult trading environment. In particular turnover from our commodity business has continued to decline although partly compensated by a growth in our other ambient warehousing activities. The slow-down in UK economic activity combined with the continuing dramatic rise in insurance costs present further challenges in the year ahead. However the company has some interesting business opportunities and has identified further operational improvements.â?
John M Paterson
Chairman
27 February 2003
For reference:
Murray Consultants:
Joe Murray / Grainne O´Brien Tel: +353 1 498 0300
The company has declared a loss after tax of €4.4m, mainly due to a goodwill and fixed asset impairment write-off of €5.0m. Loss per share is €51.9c.
After excluding the effect of goodwill amortisation and exceptional items, the adjusted pre-tax profits of €1.2 million showed a substantial improvement on the previous year primarily through operating cost reductions and lower interest charges. Adjusted earnings per share is €9.0c compared with €4.8c in 2001.
An impairment review relating to the carrying value of the commodity business and cold storage operation at East Kent has resulted in a €5.0m write-off of which €4.9m relates to goodwill.
Borrowings were reduced by €2.3m to €5.5m as a result of improved operating cash flow, the sale of surplus land and an exceptional rates rebate. The debt equity ratio, after eliminating goodwill, was 67% compared with 99% last year. Lower interest rates and improved cash management contributed to reducing net interest costs by €0.2m to €0.3m
The directors are recommending a maintained final dividend of €4.0c making a total of €5.27c for the year. It is proposed to pay the final dividend subject to shareholder approval on 23 May 2003.
The cold storage division improved on last year but market conditions essentially remained the same with over-capacity and rising insurance costs continuing to hamper growth. Nevertheless, four stores produced better results than in 2001 but East Kent continued to suffer from local factory closures and struggled to replace lost business. Wrexham in particular traded substantially better in the latter part of the year.
The ambient warehousing operation, BWA, experienced mixed fortunes. York continued to exceed expectations, with full occupancy including the extension completed in July. The traditional commodity business continued to decline and is not expected to recover because of supply chain changes. Although other ambient traffic continued to grow, the pace of growth was not sufficient to combat the decline in commodities.
The company is competitively well placed to capitalise on business opportunities arising in the current year. Business wins in the cold storage market are helping to mitigate the effects of substantial insurance cost increases. Good growth in business volumes has justified the building of a further extension at York. A lease on the last of the group´s overspill commodity warehouses in Felixstowe has been terminated with effect from April. These improvements will help to combat the current slow down in UK economic activity
The audited profit and loss account, balance sheet and cash flow statement in sterling currency, with comparatives, are attached. For information purposes these are also expressed in Euro (€) at the rate of €1 = £0.65, the conversion rate applicable on 31 December 2002. The Euro (€) figures are not audited.
Copies of the Preliminary Announcement can be obtained from Grainne O´Brien, Murray Consultants, Dartmouth House, 1 Grand Parade. Dublin 6.