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This page has the basic text of the company results up to 31st. Dec 2000. The detailed figures are not currently on the page (it takes rather a while to format). The data is available on RNS news record. For further information scroll to the bottom of this webpage. |
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Lupus Capital plc Financial results for the year ended 31 December 2000 Lupus Capital plc (Lupus) today announced its financial results for the year ended 31 December 2000. Highlights are as follows: * Lupus is making good progress with its investment strategy. Portfolio now includes one wholly-owned subsidiary, Gall Thomson, and two strategic investments in Armitage Brothers and European Colour. * Operating profit on continuing operations before goodwill amortisation and interest is £1.31 million, turnover £4.77 million and profit before tax £527,000. * Final dividend of 0.225p, together with interim dividend of 0.1p, to give total dividend for the year of 0.325p, an increase of 8%. * Gall Thomson's continuing businesses have achieved record sales and operating profit. It has made an excellent start to the year and has a strong order book. * Lupus is continuing to build its investment portfolio and expects to make significant progress in implementing its strategy with further corporate activity in 2001.
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Statement of the Chairman and the Chief Executive Strategy The strategy of Lupus Capital plc (Lupus or the Group) is to invest in, or acquire, small and medium sized public companies which are facing strategic barriers to development whether of a corporate or commercial nature. Lupus intends to generate significant returns by providing and, where necessary, implementing strategic plans for these companies, including appropriate exit routes. Lupus will therefore create value by providing a service to shareholders and company boards, as well as to acquisitive well-run international companies looking to expand and to diversify their businesses. At 31 December 1999 and 30 June 2000, the Group's wholly-owned subsidiary, Gall Thomson Environmental Limited (Gall Thomson), was recorded as a current investment on the basis that it was held with a view to subsequent resale. Applicable accounting practice now requires normal consolidation of financial information for Gall Thomson, and, accordingly, this presentation has been adopted at 31 December 2000 and comparative information restated. A brief review of the activities of each of Lupus's investments is made in its interim and full year statements, particularly in relation to companies that are wholly-owned. Additionally, each Annual Report and Accounts will include a more detailed description of wholly-owned businesses. |
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Implementation of strategy Lupus's strategy is to hold, at any one time, major investments in approximately five companies. Such investments may be wholly owned or represented by a strategic interest in up to some 20% of the issued share capital of the particular company. Following the acquisition of Gall Thomson in December 1999 Lupus has continued to build up its portfolio of assets during the course of 2000. In May, the Group announced that it had a acquired a holding representing 13.3% of the issued share capital of Armitage Brothers plc, a company which develops, manufactures and supplies pet accessories and pet food. In August, Lupus announced that it held 3.5% of the issued share capital of European Colour plc, an interest which has subsequently been increased to a current level of 10.1% of the issued share capital. European Colour is a speciality chemicals company which manufactures specialist pigments and performance coatings. Lupus expects to reach its optimum level, in terms of numbers of companies in which it has a major interest, during the first half of this year. Lupus will then be in a position to pursue the key element of its strategy, the generation of significant returns by providing and, where necessary, implementing strategic plans for these companies including appropriate exit routes. |
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Financial review In the year to 31 December 2000, Lupus's continuing operations made an operating profit before goodwill amortisation and interest of £1.31 million (1999 continuing operations: loss of £1.15 million) on turnover of £4.77 million (1999 continuing operations: £nil). After a charge of £750,000 (1999: £nil) for goodwill amortisation, Lupus's continuing operations made an operating profit before taxation in the period of £556,000 (1999: loss of £1.15 million). Profit before taxation, including net interest and dividend income of £36,000 and a loss on disposal of operations of £47,000, was £527,000 (1999: loss of £687,000). The net assets of Lupus at 31 December 2000 were £15.36 million (£15.85 million at 31 December 1999) representing 9.05p per share (9.35p per share in 1999). Net debt amounted to £2.84 million (1999: net funds of £3.71 million). Dividends The Board is recommending a final cash dividend of 0.225p per share (1999: 0.2p). Combined with an interim dividend of 0.1p, this makes a total dividend of 0.325p (1999: 0.3p) per share for the year, which represents an increase of 8.33%. Subject to approval at the AGM, the final dividend will be paid on 1 June 2001 to shareholders on the register at the close of business on 4 May 2001. |
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Review of investments Lupus acquired Gall Thomson, then a listed company, the major business of which is the supply of marine breakaway couplings for oil and gas applications in December 1999. In the year under review, Gall Thomson's continuing businesses have performed very well, significantly exceeding budget. The acquisition of two add-on businesses has also enhanced Gall Thomson's strategic value. The continuing operations recorded sales of £4.77 million and operating profits of £2.33 million; both sales and operating profits attained record levels. Gall Thomson's main business has been particularly strong. Furthermore, this excellent performance was largely achieved without any major benefit from new activity resulting from the sustained period of higher oil prices. These higher price levels are now beginning to impact favourably on the level of exploration and new production activity in the oil and gas industry, which, in turn, is beginning to benefit Gall Thomson's order book. In February 2000, Lupus strengthened Gall Thomson by acquiring a dedicated manufacturing facility in Great Yarmouth at a total cost of approximately £540,000. This acquisition has had a beneficial impact on Gall Thomson's margins. An acquisition was also made in May to strengthen Gall Thomson's industrial couplings business, at a cost of £126,000. The industrial couplings business, principally operating through Gall Thomson's subsidiary, KLAW Products Limited, made particularly strong progress in the second half of the year, achieving record levels of sales and operating profits. On 4 May 2000, Lupus announced that Gall Thomson had disposed of its subsidiary, Survey Equipment Services, Inc. (SES), based in Houston, Texas. SES, which represented a small part of Gall Thomson, is involved in the supply, sale and rental of specialist marine navigation and survey equipment to the oil and gas industry. SES was sold for a cash consideration of £1.4 million. In the nine months to 31 December 1999 SES recorded a break-even result on a turnover of £1.6 million. Net assets at 31 December 1999 were £2.0 million. The market in which SES operates became progressively weaker in 1999 and this trend continued into the early part of 2000: SES made a trading loss of £65,000 in the first four months of the year. Lupus felt that this small loss-making subsidiary, unrelated to Gall Thomson's core business, was a major distraction to management and a drain on the Group's resources. On 4 May 2000, Lupus disclosed that it held 538,000 shares in Armitage Brothers plc (Armitage) representing 13.3% of the issued share capital of Armitage. Armitage develops, manufactures and supplies pet accessories and pet foods. Lupus believes that there is continuing growth in consumer demand in both of these sectors but that there needs to be consolidation amongst the suppliers for a number of reasons, including major change relating to the distribution and retailing of the products.
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Lupus announced on 30 August 2000 that it held 1,626,236 shares in EuropeanColour plc (European Colour) representing 3.5% of the issued share capital of the company. Following further share purchases during the intervening period, it was announced on 15 February 2001 that Lupus held a total of 4,691,616 shares, representing 10.1% of European Colour's issued share capital. European Colour is a speciality chemicals company comprising a holding company with two divisions producing specialist pigments and performance coatings. European Colour is a highly profitable company but operates in a sector which, particularly in recent years, has been, and continues to be, subject to worldwide consolidation.
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The benefits of consolidation, particularly as the global economy continues to revert to its long-term historic norm of sustained low inflation or, indeed, deflation, are apparent in almost all the sectors in which Lupus has invested or will be investing. These benefits include buying power, in terms of raw materials and services, access to better and more extensive marketing and distribution, access to capital and easier access to recruiting new management, better trained to make use of the developments in information technology. Lupus takes an active interest in companies which it believes need to take advantage of these benefits, resulting in, inter alia, the release of significant shareholder value which would not otherwise be attained.
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Current trading Gall Thomson has made an excellent start to the year and the outlook, with a strong order book, continues to be encouraging. Lupus believes that Gall Thomson will achieve significant growth in sales and profitability during the course of the year. Lupus continues to build up its portfolio of assets and is currently giving detailed consideration to a number of potential investments. In the meantime, the Group continues to develop its relationships, and the inter-change of ideas, with those companies in which it has already taken a strategic investment. The Board believes that Lupus will make significant progress in implementing its strategy during 2001 and looks forward to the future with confidence.
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For further information, please contact:
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The Annual General Meeting The Annual General Meeting was held at the offices of Ashurst Morris Crisp, Broadwalk House, 5 Appold Street, London, EC2A 2HA at 11:00am on 14 May 2001.
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The Board is recommending a final cash dividend of 0.225p per share (1999: 0.2p). Subject to approval at the AGM, the final dividend was paid on 1 June 2001 to shareholders on the register at the close of business on 4 May 2001. The ex-dividend date was on 2 May 2001. |
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This Page compiled 20th. March 2001 |
