Slide 1: 2009 Interim Results
2009 Interim Results August 2009
Slide 2: Contents
Contents • Executive Summary • 2009 H1 Results • Dividend • Business Review • Pension Scheme Deficit • Market Outlook • 2009 H2 Priorities • Conclusions
Slide 3: Executive Summary
Executive Summary 2009 2008 Operating profit before exceptional costs £1.1m £1.4m Profit before exceptional costs £0.5m £1.0m Packaging Distribution operating profit £1.2m £0.6m Manufacturing Operations operating loss (£0.2m) £0.9m Exceptional costs of £0.4m to align cost base with demand Net debt £
Slide 4: Results
RESULTS H1 2009 H1 2008 H2 2008 Sales £m 59.1 64.4 67.0 Sales (reduction)/growth ( 8%) 12% 7% Distribution ( 7%) 15% 9% Manufacturing (11%) 3% 2% GP % 32.2% 31.6% 32.5% Operating profit % 1.8% 2.2% 4.9% Pre-tax profit £m 0.5 1.0 2.7 Tax charge (credit) 0.1 0.3 0.5 Discontinued operations 0.2 (0.6) (
Slide 5: Cash Flow
CASH FLOW H1 2009 H1 2008 H2 2008 Operating profit 0.8 1.6 3.4 Depreciation 0.7 1.0 0.7 Working capital (net) (2.4) (3.7) 3.8 Interest and Tax (0.5) (0.9) (0.4) Pensions scheme payment (0.7) (0.7) (0.7) Disposal of subsidiary 1.6 0.0 (0.6) Acquisitions (0.5) (3.6) (3.8) Net capital expenditure (0.3)
Slide 6: Dividend
Dividend Payments re-established in 2004 Recognised confidence/need to reward shareholders Dividend funding is based on trading performance, cash flow and distributable reserves Strategy is to align pattern of dividend payments with the pattern of results H1 trading reflects the economic slowdown Pe
Slide 7: H1 2009 – Distribution
H1 2009 – Distribution Distribution sales 8% below H1 2008 New business 41% ahead of H1 2008 • Gross margin increased to 31.3% vs. 29.5% H1 2008 • Overhead costs 7% reduction versus H1 2008 • Integration benefits from Online acquisition • Underlying returns in Distribution continue to improve 2.3% (
Slide 8: H1 2009 – Manufacturing Operations - Labels
H1 2009 – Manufacturing Operations - Labels Sales 4% below H1 2008 Strong own brand sales at expense of brands Slow down in Re-Seal It as customer preferences change from premium products Raw material price increases have reduced gross margin Negative impact of exchange rates H1 2009 profit slightly
Slide 9: H1 2009 Manufacturing Operations – Packaging
H1 2009 Manufacturing Operations – Packaging • Sales 21% down versus H1 2008 • Key weaknesses in automotive and electronics sectors • Customer wins in aerospace sector – Meggitt • Re-structure of cost base - incurred £0.3m exceptional cost in H1 2009 • Packaging Manufacturing made a loss in H1 2009
Slide 10: Pension Deficit
Pension Deficit Gross deficit £20.7m vs. £17.5m at 31-Dec-08 Increase in deficit caused by:- - 2009 equity performance < expectation - £0.7m - Decrease in discount rate from 6.25% to 6.20% combined with inflation assumptions - £2.5m New contribution level currently being agreed Closed to new members
Slide 11: Market Outlook
Market Outlook Overall UK demand conditions remain weak - mixed outlook by sector Evidence of some fall-out of smaller competitors and suppliers Suppliers looking for certainty with customer base Customers looking for certainty with supplier base New business opportunities remain strong Impact of Eu
Slide 12: 2009 H2 Priorities – Distribution
2009 H2 Priorities – Distribution Strengthen new business momentum Maintain strong focus on gross margins Continue Best Practice Programme to drive RDC improvement Ongoing examination of all areas of cost structure Deliver integration benefits of acquisitions - Online now fully integrated - Allpoint
Slide 13: 2009 H2 Priorities - Manufacturing
2009 H2 Priorities - Manufacturing Labels Manage impact of higher raw material prices Build Re-Seal It opportunity in US Improve operational efficiencies Packaging Manufacturing Complete the restructuring of the business Continue to flex costs in line with demand Focus on new business both directly
Slide 14: Conclusions
Conclusions • UK market conditions remain difficult and this is reflected in H1 2009 performance • Distribution results demonstrating robust nature of business model • Re-structuring in Packaging Manufacturing reflected in return to profitability in H2 2009 • Full year outlook remains in line with t
Slide 15: 2009 Interim Results
2009 Interim Results August 2009