Writtle half year trading report and interim dividend announcement
I am pleased to report an excellent result for the first six months of the year, with profit on trading significantly ahead of the prior year which included profits from a business which was sold at the end of that period.
Results and dividends
Turnover was £30.22m (2016: £38.68m) and headline profit before tax was £2.41m (2016: £1.79m).
Turnover from continuing operations was £30.22m (2016: £27.45m) and operating profit from continuing operations was £2.01m (2016: £0.74m).
There were no exceptional profits on disposals in the period (2016: £5.13m).
Net cash balances at 30 June 2017 were £6.48m (2016: £6.53m).
An interim dividend of 4.50p (2016: 3.75p) will be paid on 31 October 2017 to shareholders on the register on 20 September 2017.
Review of trading
Our three business groups, Innovation, Implementation and Instore, experienced similar trading conditions to the prior year and we show their performance on page 9 of this report.
Our Innovation businesses again found the market difficult and further restructuring costs of £0.23m were incurred in the period as we reduced the cost base in certain companies. Despite some signs that our clients are unlocking budgets to innovate, it is too early to predict a recovery and our companies continue to have to fight harder to win projects, and more often they are at lower values. Against this trend, Epoch once again outperformed and Identica has made a strong contribution since its acquisition on 22 March 2017.
Our Implementation businesses, trading as the Magnet Harlequin Group, continued their upward trajectory, winning more work with brands and retailers. Faced with a growing demand for integrated creative, production and technology to provide clients with a fast and effective route to market, the Magnet Harlequin Group has thrived and it is now the UK’s leading independent in the packaging graphics sector.
Our Instore business, Arken POP International, enjoyed an impressive first half operating at almost full capacity designing and manufacturing in-store displays with its highest growth coming from the beauty market across European retailers.
Aside from the acquisition of Identica on 22 March 2017, we have reviewed a number of potential acquisitions without finding a compelling case. Opportunities to acquire companies are plentiful, finding good value far harder. We continue to seek larger transformational deals although we will consider smaller opportunities in the sector, like Identica, which have good synergies and growth potential, as well as expanding our offer.
Writtle repeated a share trading opportunity for shareholders in May 2017 with a record £1.26m changing hands in matched bargains for Writtle shares. Once again, we have been able to create a market for those who wish to buy or sell shares without the significant costs associated with formal markets.
I am pleased to report that the strong first half trading has continued into the second half and I look forward to reporting further progress in due course.
28 September 2017