As a direct response to the increased number of our investors electing to receive only electronic copies of our major publications, we have the most recent available here;
The Notice of Annual General Meeting 2010
The 2009 Annual Report
Chairman's Statement (2009 Preliminary Results)
Toby Hayward
Chairman
Overview
I have been pleased with the Company’s performance in my first full year as Chairman.The good profits in 2009 and the Company’s strengthened balance sheet have been achieved against a worsening market backdrop.
Decisive actions by the executive team have established conditions whereby the Company’s position of market leadership will be sustained and a solid future provided for.
Looking ahead we will be able to resume with our growth ambitions when the UK market recovers and our Joint Venture in India realises some of the Indian market’s vast potential.
Results
Underlying operating profit (before the non-underlying items charge of £5.7 million) reduced by 7.7% to £50.8 million on revenue reduced by 11.4% to £349.4 million.The underlying operating margin rose from 14.0% to 14.6% reflecting the prime business mix engaged for 2009.
Following net finance costs of £1.0 million, underlying profit before tax reduced by only 5.1% to £49.8 million resulting in a 5.2% reduction in underlying basic earnings per share to 40.00p per share.Profit after tax of £31.3 million (2008: £24.0 million), with basic earnings per share of 35.34p (2008: 27.06p), both reflecting non-underlying items.
We ended the year with net cash of £11.6 million (2008: net borrowings £15.8 million).Dividend
On 25 February, the Company declared a second interim dividend payment of 5.00p per ordinary share in lieu of the final dividend for the year ended 31 December.The dividend will be paid on 29 March 2010 to shareholders on the register on 5 March 2010.
The ex-dividend date was 3 March 2010.
The Company will maintain a prudent dividend policy going forward.
Board Changes
Peter Davison, our Finance Director, will leave his role full-time at the AGM on 3 June 2010.Peter has been a dedicated director in the company for some 22 years and has played a vital part in the Company’s development and expansion over that time.
The Company is grateful to Peter for his outstanding contributions.
Peter will remain as Company Secretary.
Alan Dunsmore joined the Company on 1 March 2010 as our new Finance Director.
Alan joins the Board from Smiths Group Plc where he was Director of Finance of Smiths Detection and we look forward to his contributions in the coming years.
People
The past 12 months has been a difficult period for all of our employees with the Company seeking to streamline employee numbers, reduce capacity and introduce substantial changes to pay, terms and conditions.Such radical change is required to enable the business to operate effectively within a weaker market and the highly competitive environment prevailing in the sector.
The Company is appreciative of the sacrifices being made and is encouraged that, as a result, it can emerge in better times significantly stronger.
Outlook
The Company has enjoyed several very successful years and is in a strong position in terms of its balance sheet, cost base and core market advantages to compete in the current market.2010 will be a challenging year during which the Company is confident that it will grow its UK market share.
Although prices have bottomed, margins will remain under pressure until supply and demand are brought into better balance.
During 2011 a mild recovery in structural steel demand is anticipated, albeit subject to macro-economic factors.
In India the Company sees strong demand and good prospects for the products and services being offered by our joint venture.
Indian construction spending is some three times the current UK level and is growing healthily.
Management is confident that the Company can progress through prevailing conditions and will be in a position for a return to growth when its Indian joint venture plant opens this summer.
Toby Hayward
Chairman
