Chairman’s statement

 

Introduction

 

I am pleased to report the unaudited interim results for the six months to 30 September 2012. 

 

The Group continued to perform well despite difficult trading conditions, which were exacerbated by the wettest summer in England and Wales for 100 years. 

 

Profit from continuing operations was £0.5m (2011: £0.5m). The Group’s results were not affected in the current period by losses from discontinued operations and hence profit increased by 24 per cent. to £0.5m (2011: £0.4m). 

 

The disposals of The Roof Truss Company (Northern) Limited and Hastie D Burton Limited resulted in £0.1m of exceptional costs being incurred in the six months ended 30 September 2011. The Group is now focused on its established base of core businesses and has been able to deliver savings in central costs.  This has, in part, resulted from the Group’s Head Office being moved to Prestwick Park, which has allowed the centralisation of certain administrative functions and a more streamlined operation.

 

Earnings per share for the period increased to 2.5p (2011: 2.0p)

 

The Group made changes to its management structure during the period, including the appointment of Graham Jennings as Managing Director of the Group in July 2012.  I would like to thank Graham for his contribution to date and am confident his vast experience in the sector will allow him to guide the Group through the continued difficult trading conditions. 

 

Trading

 

Revenue (from continuing operations) increased by 3 per cent. to £17.7m (2011: £17.2m) but the Group continued to experience margin pressure in all markets.

 

The Group undertook a full review of overheads and this has resulted in a reduction in administrative expenses to £3.1m (2011: £3.3m). 

 

The market conditions in which the Group operates continue to be challenging and remain impacted by the current uncertain macroeconomic conditions. Despite the continued uncertainty, the Group’s order books remain healthy although the roll out of these orders remains difficult to predict.

 

Cash flow

 

Net bank debt at 30 September 2012 was £6.7m (2011: £8.0m).

 

The Group’s strategy continues to be to reduce its level of bank debt and the Group’s bank continues to be supportive. 

 

Dividend

 

The Board believes the Group’s priority should be to reduce bank debt levels and, hence, that it would not be prudent to declare an interim dividend. 

 

Strategy / Outlook

 

Order books continue to be healthy and we remain cautiously optimistic with regard to maintaining current levels of trading, although market conditions remain volatile. 

 

Our overall priority remains to improve earnings and cash flow to continue to reduce the Group’s level of bank debt.  In this respect the Group’s cost base remains under constant review. 

 

 

People

 

Following Graham Forrest’s resignation as Chief Executive Officer of the Company in October 2011, I oversaw an operational review resulting in changes to the Group’s management structure.  This resulted in the appointment of Graham Jennings as Managing Director of the Group effective from 30 July 2012.  Keith Soulsby was also re-appointed to the Board as an Operations Director on 11 May 2012. 

 

I am confident that the Group now has a more effective management structure which will allow it to continue to meet the challenges it faces and which is already delivering benefits to the Group. 

 

The quality and experience of our people and the key customer relationships they maintain remain fundamental to the Group’s success. 

 

 

 

 

 

 

Howard Gold

Non-Executive Chairman

30 November 2012