On 27 March, the UK group Hepworth Plc announced preliminary results for the year to 31 December 1996.
Turnover rose 1.6% to UK 777.8 million from a 1995 figure of UK 765.9 million. Operating profit …
On 27 March, the UK group Hepworth Plc announced preliminary results for the year to 31 December 1996. Turnover rose 1.6% to UK 777.8 million from a 1995 figure of UK 765.9 million. Operating profit fell 5.7% to UK 69.4 million from 1995“s UK 73.6 million), with profit before tax of UK 67.6 million (1995: UK 74.5 million). Earnings per share dipped 11.1% from 20.8 pence in 1995 to 18.5 pence last year, and the Hepworth dividend for 1996 will remain at the 1995 level of 14.85 pence. In its report, Hepworth said that Group sales had benefited from a continued rise in exports and from recent acquisitions. Underlying profit performance in competitive market conditions was, it added, encouraging. Operating profit, however, was held back principally by management actions to reduce the cost base, leading to redundancy costs of UK 6.7 million (1995: UK 3.3 million). The UK pension charge increased in 1996 to UK 5.7 million from UK 3.6 million in 1995. Property profits, which arose from the disposal of surplus sites, amounted to UK 2.8 million compared with UK 4 million in 1995. As regards the Group“s financial position, the report stated that Hepworth“s net cash outflow of UK 3.1 million reflected ongoing investment in plant and equipment ahead of the depreciation charge. The large percentage of the Group“s assets denominated in European currencies, and the appreciation of sterling, has resulted in an exchange adjustment in the balance sheet of UK 9.5 million. This, along with a goodwill write-off of UK 7.5 million, resulted in a reduction in equity shareholders“ funds to UK 213.2 million (1995: UK 218.8 million). Turnover at Hepworth Refractories amounted to UK 157.1 million (1995: UK 162.9 million) and operating profit to UK 7.4 million (1995: UK 7.6 million). A major programme of efficiency improvements in the division“s principal operations and general overheads was initiated in the year. Related redundancy and other rationalisation costs of UK 3 million were incurred in 1996 (1995: UK 0.3 million), indicating a “satisfactory underlying performance”. Demand from the European glass market was defined by Hepworth as “stable” while sales to North and South America were described as “firm” due to strong demand from the glass and aluminium sectors. In October 1996 Hepworth announced that it was in discussions with a number of interested parties on the possible sale of its Refractories Division. The report said that these discussions are continuing. Chemicals Division sales decreased marginally to UK 88.9 million (1995: UK 90.6 million) while operating profit slipped to UK 10.3 million (1995: UK 11.9 million). In the UK, volumes in the glass markets were generally subdued and there was a significant reduction in demand for products supplied to the building and construction sector. As regards this year, Hepworth said 1997 will be a challenging year for the Group as sterling“s recent rise against major European currencies will impact translation of overseas earnings and impair export margins. The Group said it intends to continue to take vigorous action to reduce its cost base. A further increase in pension pay-outs in 1997 is also expected to limit earnings. The underlying outlook for 1997 was, however, seen as “positive”.