Printer Friendly


 GREENWICH, Conn., Oct. 29 /PRNewswire/ -- LEP Group plc (NASDAQ-NMS: LEPGY), today issued the following interim statement of results for the six months ended June 30, 1993:
 -- Turnover up to 703.0m pounds sterling (1992: 694.5m pounds)
 -- Operating profit up to 14.3m pounds (1992: 13.4m pounds)
 -- Net interest charge down to 17.5m pounds (1992: 23.7m pounds)
 -- Loss after interest reduced to 5.0m pounds (1992: 14.7m pounds loss)
 -- No dividend is likely in the foreseeable future
 Chairman's Comments
 The unaudited results for the six months to June 30, 1993, cover a period in which the Group's trading activities benefited from the stability achieved as a result of the financial restructuring completed on Aug. 28, 1992. This restructuring included the conversion by the Group's principal bankers of 180 million pounds of debt into ordinary share capital and the provision by these banks of new facilities for a three year period.
 The restructuring has made available resources to enable new investment to proceed within the Freight Forwarding operations which will have a beneficial impact in the longer term. In the short-term, however, the results of these operations to a large degree reflect the depressed levels of world trading activity. While improved economic circumstances were evident in certain of the Group's markets, most of the Continental European markets and that of Japan suffered from worsening recessionary conditions during the period under review.
 A small improvement in the trading performance of The National Guardian Corporation has been enhanced by the benefit arising from the exchange rate movement between sterling and the U.S. dollar.
 Operating Results
 The results for the six months to June 30, 1993, have been presented in accordance with the requirements of Financial Reporting Standard No. 3 - Reporting Financial Performance ("FRS 3"). The results for the six months to June 30, 1992, and the year to Dec. 31, 1992, have been restated to comply with FRS 3 and are thus presented on a basis consistent with those of the current period.
 The Group's turnover from continuing operations in the six months to June 30, 1993, rose to 703.0 million pounds (1992: 694.5 million pounds), an increase of 8.5 million pounds. The Group's total operating profit improved slightly in overall terms from 13.4 million pounds in 1992 to 14.3 million pounds in 1993.
 The net interest charge for the period showed a significant reduction of 6.2 million pounds to 17.5 million pounds (1992: 23.7 million pounds), attributable to the banks' conversion of debt to equity. Despite this reduction the interest charge remains high in relation to current profitability, a reflection of the fact that the majority of the Group's residual debt is attributable to losses incurred on former activities and discontinued business. Consequently a profit on ordinary activities of 12.5 million pounds (1992: 9.0 million pounds) reduces to a loss after interest of 5.0 million pounds (1992: 14.7 million pound loss).
 Shareholder Return
 The Board is not declaring an interim dividend. I must reiterate the comment in my Statement accompanying the 1992 Accounts to the effect that there can be no expectation of an early return to dividend payments. Shareholders should also recognize that any expectation of a return from their investment must depend upon the values ultimately attributable to the Group's continuing trading subsidiaries.
 Although the Board has continued confidence in the viability of these subsidiaries, it should also be recognized that the funding requirements of these continuing businesses only account for a minority of the Group's residual debt. The interest burden attributable to the majority of the of the Group's debt, which relates to past activities, has been described earlier, and shareholders should be aware of the obvious burden on the Group arising from the requirement to repay this element of the debt.
 It is important that shareholders fully recognize the significant implications of the above factors in assessing the prospective value of their investments.
 Ongoing attention to costs and the development of appropriate operational structures throughout the Group continue to provide benefits to the trading performance. Although certain of the world economies, notably North America and the United Kingdom, are showing limited economic improvement, Continental Europe continues to suffer from severe recessionary conditions.
 Any return to growth in these economies, and the consequent increase in the overall level of world trade, is likely to result in benefit to the Group that will be further enhanced by the improved operational efficiencies being implemented.
 Unaudited Results for the Six Months to June 30, 1993
 (In thousands of pounds)
 Note Six months Year
 Period ended 6/30/93 6/30/92 12/31/92
 As restated
 Continuing operations 702,972 694,496 1,456,832
 Discontinued operations --- 8,426 16,931
 Total 702,972 702,922 1,472,763
 Operating profit
 Continuing Operations 14,193 13,876 11,241
 Discontinued operations --- (357) 607
 Total F 14,193 13,522 11,848
 Share of profits/(Losses)
 of associates 71 (137) (38)
 Total operating profit 14,284 13,385 11,810
 Loss on disposal of
 fixed assets --
 continuing operations G (1,769) (2,065) (1,843)
 Reorganization costs --
 continuing operations G --- (2,p share E
 (0.7) (12.7) (9.7)
 Unaudited Results for the Six Months to June 30, 1993
 Note of Historical Cost Profits and Losses
 (In thousands of pounds)
 Six months Year
 Period ended 6/30/93 6/30/92 12/31/92
 As restated
 Reported loss on
 ordinary activities
 before taxation (5,061) (14,724) (38,329)
 Realization of property
 revaluation gains of
 previous years 1,200 --- 763
 Difference between the
 historical cost
 depreciation charge and
 the actual depreciation
 charge of the year
 calculated on the
 revalued amount 187 189 395
 Historical cost loss on
 ordinary activities
 before taxation (3,604) (14,535) (37,181)
 Historical cost
 retained loss (5,257) (17,387) (38,301)
 (A) The comparatives for the six months to June 30, 1992 and the 12 months to Dec. 31, 1992 have been restated under the new Financial Reporting Standard No. 3.
 (B) The results of overseas subsidiaries have been translated into sterling at average rates of exchange for the relevant period.
 (C) The Group is involved in the following material litigation:
 -- An action for an unquantified amount has been commenced in the United States against the company and certain of its former directors by a shareholder alleging reliance on misleading public statements in the acquisition of shares. The proceedings are being defended.
 -- An action has been commenced in South Africa against the company and a subsidiary claiming under a letter of comfort. The proceedings are being defended.
 -- A defective product claim has been commenced in the United States and a subsidiary of the Group. The proceedings are being defended.
 -- Actions for damages arising out of a fire at a high rise building have been commenced in the United States against various defendants, including a subsidiary of the Group. The proceedings are being defended.
 -- A former director and his service company have commenced proceedings against the company seeking damages for breach of contract. The proceedings are being defended and the company has counter claimed against the director for damages and breach of duty.
 The directors are of the opinion, having regard to legal advice, that adequate provision has been made for any liability which may result from the above litigation.
 (D) The figures shown for the year ended Dec. 31, 1992 are not statutory accounts. A copy of the statutory accounts for that year, upon which the auditors gave a qualified report, has been delivered to the Register of Companies.
 (E) The loss per ordinary share has been calculated on the weighted average of 922.2 million shares in issue during the first half of 1993. This compares to weighted averages of 138.3 million and 406.8 million in the six months to June 30, 1992 and the year to Dec. 31, 1992, respectively. The increase is attributable to the 783.9 million ordinary shares issued on Aug. 28, 1992 as part of the refinancing of the company.
 (F) Profit on ordinary activities
 Period ended Six months Year
 6/30/93 6/30/92 12/31/92
 As restated
 (In thousands of pounds)
 Continuing operations
 Freight forwarding and
 physical distribution:
 Operating profit before
 exceptional items 3,450 6,522 4,308
 Restructuring costs and
 provisions (393) (855) (7,060)
 Total 3,057 5,667 (2,752)
 Operating profit before
 exceptional items 10,556 8,838 18,339
 Withdrawal from special
 engineering businesses --- (2,514) (5,338)
 Total 10,556 6,324 13,001
 U.K. Property 3,487 3,714 7,638
 Operating costs before
 exceptional items (2,483) (1,826) (5,396)
 Investigative, litigation
 and other costs (424) --- (1,250)
 Total (2,907) (1,826) (6,646)
 Total continuing
 operations 14,193 13,879 11,241
 Discontinued operations --- (357) 607
 Total 14,193 13,522 11,848
 (G) Exceptional items
 Period ended Six months Year
 6/30/93 6/30/92 12/31/92
 As restated
 (In thousands of pounds)
 Loss on disposal of
 fixed assets
 Write down of U.K.
 investment properties --- (2,065) (1,843)
 Provision for loss on
 disposal of operating
 properties (1,769) --- ---
 Total (1,769) (2,065) (1,843)
 Reorganization costs
 Professional fees
 incurred as a result
 of Group refinancing --- (2,198) (2,685)
 Loss on sale or
 termination of business
 Withdrawal from property
 development in the U.S. --- --- (458)
 Winding down and disposal
 of Knitwear businesses
 and associated operations --- --- (631)
 Closure and disposal of
 LEP Industrial Holdings
 businesses (3,184) (160) (2,641)
 Total (3,184) (160) (3,630)
 Utilization of prior year
 Disposal of certain LEP
 Industries Holdings
 businesses 3,184 --- ---
 (H) The interim statement will be sent to shareholders on or about Nov. 2, 1993 and will be made available to the public at the Registered Office of the Company, LEP House, 87 East Street, Epsom, Surrey, KT17 1DT.
 LEP's ordinary shares trade in the form of ADRs on the NASDAQ National Market System under the symbol "LEPGY."
 -0- 10/29/93
 /CONTACT: David N. James, (Epsom, Surrey), 44-071-222-8866, or George V. Flagg (Greenwich, Connecticut), 203-531-3501, both for LEP Group/

CO: LEP Group plc ST: Connecticut IN: SU: ERN

TW-MS -- NY016 -- 8452 10/29/93 11:21 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Oct 29, 1993
Next Article:/C O R R E C T I O N -- DUFF & PHELPS/

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters