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 FULMER, Buckinghamshire, England, Oct. 16 /PRNewswire/ -- Attwoods

plc (NYSE: A), the international waste management group, today announced its preliminary results for the year ended July 31, 1992:
 -- Revenues ahead 15 percent to $608 million from $529 million.
 -- Profits available for common shareholders down 17 percent to $36.3 million from $43.9 million, due largely to negative earnings swing at Mindis, the U.S. recycling subsidiary, and a higher effective tax rate.
 -- Earnings per ADR at $0.72 versus $1.14, reflecting, in part, a 31 percent increase in average shares outstanding.
 -- Dividend maintained despite larger capital base. Total (gross) dividend per ADR approximately $0.57.
 -- Significantly strengthened balance sheet. Net leverage reduced to 36 percent versus 83 percent last year. All borrowings restructured to long-term basis.
 -- U.K. operating profits up 62 percent to 4.3 million pounds sterling from 2.7 million pounds, despite longest and deepest recession in 45 years.
 -- U.S. waste management operating profits level at approximately $42 million in difficult market environment.
 -- Operating profits from mainland Europe up 46 percent to DM25.3 million from DM17.3 million.
 -- Mindis' operating profits substantially lower, to $2.5 million from $16.1 million due to fall in world metal prices.
 Commenting on the results, Chairman Ken Foreman said:
 "This has been an exceptionally difficult year for the company and it is disappointing to have to report a decline in earnings after ten consecutive years of increases. However, Attwoods enters 1993 with the strongest base in the company's history. We have established businesses with strong market shares in all the geographical regions in which we operate, producing positive cash flows. Moreover, we have a conservative balance sheet and flexible banking facilities which will more than meet our requirements for the foreseeable future.
 "Considering the recessionary climate, all divisions, with the exception of Mindis, our recycling business, did well. Mindis had a negative pre-tax swing of $13.6 million, which dramatically affected group results.
 "Revenues increased 15.1 percent to $608.2 million from $528.6 million, generating pre-tax profits of $63.4 million, a decline of 10.5 percent versus 1991. The reduction in earnings per ADR from a restated $1.14 to $0.72 was even more pronounced, reflecting the increased number of shares outstanding and higher tax rate.
 "After careful deliberation, your board has decided to recommend a final dividend of 3.25 pence per ordinary share, payable on Feb. 1, 1993, to shareholders of record on Dec. 10, 1992, making a total of 5 pence per ordinary share for the year ended July 31, 1992. Maintaining the same dividend as 1991, despite the larger number of outstanding shares and your company's declared policy of adjusting dividends in line with changes in earnings per share, is a measure of your board's confidence in the future.
 Operational Review
 "Despite what is widely perceived to be the longest and deepest recession since the end of World War II, particularly in the construction industry, our U.K. revenues increased by 15 percent to 51 million pounds, producing a 62 percent increase in operating profit to 4.8 million pounds. Continued cost containment, improved productivity and the underlying quality of our long-term contracted earnings all contributed to this performance.
 "Attwoods of North America, the holding company for our U.S. waste management businesses, performed satisfactorily in difficult market conditions. Revenues increased by 12 percent to $305 million, producing operating profits of $42 million, essentially even with 1991's results. This performance masks a pronounced regional variation, with a profit increase from our Florida operations, offset by a reduced contribution from our mid-Atlantic region, where the recession is considerably more severe.
 "In our Oct. 29, 1991, circular to shareholders I referred to an investigation into the activities of certain managers in our mid- Atlantic region. The problems relating to this investigation have proved more difficult to resolve than we originally envisaged. While the investigation continues, the company has prudently decided to make refunds to those customers affected since 1981. The costs incurred to date, together with our best estimates of future liabilities including legal fees, have been provided for as an extraordinary item in the accounts.
 "MedX, our medical waste company whose figures are included in the North American results, performed well. Management focused its attention during the year on putting in place the infrastructure to manage what is now almost a national company.
 "Mindis, our recyclables processing company, has been severely affected by the substantial fall in worldwide metals prices. Although there was a modest improvement from January through March, this failed to produce a sustained recovery, and prices subsequently resumed a downward trend which continued for the rest of the year. As a result, although revenues increased 4 percent to $123 million, operating profits fell to $2.5 million from $16.1 million.
 "ADCO, the holding company for our mainland European businesses, had an excellent year. A 62 percent increase in revenues, to DM144 million, produced an operating profit of DM25 million, some 46 percent higher than the previous year's result. From our base in Germany, we now provide services in Holland, Belgium and Czechoslovakia.
 Investment and Finance
 "We invested $121 million during the year in capital expenditures and new assets, compared to $247 million in 1991. Of this amount, 13.3 million pounds was invested in the U.K., $55.3 million in the U.S. and DM70.2 million in continental Europe.
 "At year end, net debt as a percentage of net shareholders' equity was 36.4 percent, compared to 91.6 percent in 1991, and 18.2 percent of gross shareholders' equity, versus 38.8 percent last year.
 "At the end of the year, we put into place a new $200 million multi- currency revolving credit facility, syndicated with a group of major international banks. The five-year term of the facility insures that all the group's borrowings are now structured on a long-term basis. The facility is available directly to our subsidiary companies in local currencies, which minimizes our cash exposure to exchange rate fluctuations.
 Outlook and Prospects
 "Most industrialized nations around the world are facing declining levels of economic activity and there are few signs of an end to the recession. The possible economic outcomes are so uncertain that it would be unwise to make precise predictions for 1993.
 "However, as I stated in my operating remarks, Attwoods enters 1993 with the strongest base in the company's history. We have established businesses with strong market shares in all the geographic regions in which we operate, producing positive cash flows. We have a conservative balance sheet and flexible banking arrangements which will more than meet our cash requirements for the foreseeable future. The lessons learned from our financing problems of a year ago have not gone unheeded.
 "In the U.S., we anticipate further growth in our Florida region, which has made a strong start in fiscal 1993, aided by the extra business generated by the aftermath of Hurricane Andrew. The mid- Atlantic region will benefit from a reorganization and management changes made over the past months. MedX has the benefit of a much wider geographic presence and expanded incineration capacity, the full benefits of which will accrue over the next two years.
 "The present condition of the U.S. economy makes it particularly difficult to forecast for Mindis. While costs have been reduced, Mindis is still heavily dependent on commodity prices -- especially world metals prices -- and its performance is geared to improved demand for its processed recyclables. The plastics processing plant, however, looks promising and our objective remains to reduce Mindis' reliance on metals.
 "Unless the economy improves, the U.K. will have difficulty matching this year's creditable performance. However, with less than 15 percent of group profits coming from the U.K., we can afford to wait out the recession.
 "Although higher interest rates will slow overall growth in Germany, the services we provide should not be affected. The business being generated by unification will, we believe, continue for several years. I therefore expect good growth in 1993 from our operations in mainland Europe, albeit at a slower rate than this year.
 "Attwoods is one of the very few companies in the waste management industry operating internationally. The knowledge and experience we have gained is enabling us to consider new opportunities in a number of different countries. For example, our 60 percent owned subsidiary in the Dominican Republic recently signed a ten-year $100 million contract to handle all waste collection in the capital city, Santa Domingo. We began work on this contract in September and should be fully operational by the end of January.
 Board Changes
 "We appointed in June The Lord Lane of Horsell to the board as a non-executive director. He has also accepted the position of chairman of our Audit Committee. Lord Lane's many years as senior partner of BDO Binder Hamlyn, the international accounting firm, will be of great assistance to us in the future."
 Consolidated Profit & Loss Account (Unaudited)
 (In thousands of pounds)
 Year ended July 31 1992 1991
 Turnover 340,863 289,450
 Cost of sales 259,410 214,983
 Gross profit 81,453 73,467
 Administrative expenses 44,919 35,637
 Trading profit 36,534 37,830
 Other operating income 1,988 2,813
 Operating profit 38,522 40,643
 Profits from related companies -529 223
 Total 37,993 40,866
 Net interest payable 2,433 2,184
 Profit before taxation 35,560 38,682
 Taxation 69,619 9,316
 Profit after taxation 25,941 29,366
 Minority interest 5 178
 Extraordinary items -3,500 -645
 Profit 22,446 28,899
 Preference dividend 5,588 5,603
 Profit attributable to shareholders 16,858 23,296
 Average shares outstanding 252,553,083 193,228,410
 Dividends (net) per share 5.00p 5.00p
 Earnings per share 8.06p 12.39p
 NOTE: 1991 per share data restated for rights issue.
 Consolidated Income Statement (Unaudited)
 (In thousands of U.S. dollars)
 Year ended July 31 1992 1991
 Revenues $608,236 $528,584
 Direct expenses 462,892 393,956
 Gross income 145,344 134,628
 Selling, general & admin. expenses 80,153 65,304
 Trading income 65,191 69,324
 Other operating income 3,547 5,155
 Operating income 68,738 74,479
 Profits from related companies -944 408
 Total 67,794 74,887
 Net interest payable 4,342 4,003
 Pre-tax earnings 63,452 70,884
 Taxation 17,164 17,071
 After tax earnings 46,288 53,813
 Minority interest 10 326
 Extraordinary items -6,245 -1,182
 Earnings 40,053 52,957
 Preference dividend 9,971 10,268
 Earnings available for common
 shareholders $ 30,082 $ 42,689
 Average ADRs outstanding 50,510,617 38,645,682
 Dividends (gross) per ADR $0.57 $0.57
 Earnings per ADR 0.72 1.14
 NOTE: 1991 per ADR data restated for rights issue.
 Consolidated Profit and Loss Account Unaudited)
 July 31, 1992
 U.S. Europe U.K.
 ($ 000) (DM 000) (Pounds 000)
 Turnover 428,321 143,699 51,186
 Cost of sales 339,162 94,141 36,819
 Gross profit 89,159 49,558 14,367
 Administrative expense 45,038 24,304 11,283
 Trading profit 44,121 25,254 3,084
 Other income 548 0 1,681
 Operating profit 44,669 25,254 4,765
 Related companies -758 0 -104
 Profit before interest 43,911 25,254 4,661
 Translation to
 sterling at $1.7844 24,608
 DM2.8948 8,724
 Profit before interest 37,993
 Net interest -2,433
 Profit before taxation 35,560
 July 31, 1991
 U.S. Europe U.K.
 ($ 000) (DM 000) (Pounds 000)
 Turnover 391,809 88,863 44,380
 Cost of sales 297,347 57,478 33,147
 Gross profit 94,462 31,385 11,233
 Administrative expense 40,038 13,851 9,073
 Trading profit 54,424 17,534 2,160
 Other income 3,857 -197 776
 Operating profit 58,281 17,337 2,936
 Related companies 157 0 137
 Profit before interest 58,438 17,337 3,073
 Translation to
 sterling at $1.8325 -- 31,890
 DM2.9386 5,903
 Profit before interest 40,866
 Net interest -2,184
 Profit before taxation 38,682
 Consolidated Balance Sheet for the Year
 Ended July 31, 1992 (Unaudited)
 (In thousands of pounds)
 7/31/91 7/31/90
 Fixed assets:
 Tangible 231,897 222,879
 Investments 28,592 28,393
 Total 260,489 251,272
 Current assets:
 Stocks 45,878 38,182
 Debtors 59,553 56,485
 Investments 36 1,925
 Cash and equivalents 33,636 6,469
 Total 139,103 103,061
 Deferred purchase
 consid. 2,503 3,995
 Other 70,346 60,081
 Current portion of
 long term debt 15,610 83,349
 Total 88,460 147,425
 Net current assets/
 (liabilities) -44,364 50,643
 Total assets less
 long term liabilities 311,132 206,908
 Long term debt 74,079 41,690
 Deferred purchase
 consid. 3,121 3,951
 Finance leases 10,979 2,146
 Total -88,179 -47,787
 Deferred taxation -15,126 -16,285
 Total 207,827 142,836
 Shareholders' equity:
 Shareholders' funds - gross 413,798 334,220
 Goodwill written off -206,868 -192,581
 Shareholders' funds - net 206,930 141,639
 Minority interest 897 1,197
 Total 207,827 142,836
 -0- 10/16/92
 /CONTACT: Ken Foreman, chairman and chief executive, or Ed Johnson, finance director of Attwoods, in the U.K., 011-44-71-831-3113 until 9:30 a.m. EDT, or 011-44-71-235-0338 after 10 a.m.; or Hal Levine of the Levine Group, in New York, 212-682-8875, for Attwoods/
 (A) CO: Attwoods plc ST: IN: SU: ERN

GK-EE -- NY012 -- 0896 10/16/92 11:14 EDT
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Date:Oct 16, 1992

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