Turnover of £118.2 million (2003: £139.1m), and operating profit of £4.6m (2003: 29.8m) were the key statistics of Ultraframe’s preliminary results for the 53 weeks ended 1 October 2004 (2003: 52 weeks).

UK sales in the year were down 18.7% compared with the prior year, as indicated in the October trading statement. Pressure on margins continues and the UK market remains volatile and competitive.

In North America, core sunroom dollar sales for the year were 4.5% up on the prior year. A 4.7% decline in sales in the franchise network was counterbalanced by very strong growth in the nascent Company-owned retail stores with sales almost doubled.

Operating cash flow of £22.8m (2003: £30.6m) remained strong, while net debt reduced to £6.5m (2003: £8.3m).

Results include prudent provision for an exceptional item of £5.3m, charged in respect of the US litigation announced on 3 September.

The proposed final dividend of 7.86p held in line with last year, as previously indicated

Ultraframe Chairman Rod Sellers commented: ‘Whilst the Group results are in line with the statement we made in August, the past year has clearly been disappointing in terms of operational performance.’

He also predicted that new management, cost reduction, faster new product development and stronger customer relations will mitigate the continuing decline in sales.

‘We expect the Group to deliver a small underlying pre-tax loss in the first half, but to show an improvement in trading in the second half, as the planned operational initiatives in the UK and North America gather momentum. Overall, the rate of decline in profitability before goodwill and exceptionals in 2005 should be less than in 2004.’

Source

Glass Age