- Email: [email protected]
McLeod Russel Holdings Plc, UK
Filtration
April 2000
Industry Analyst
McLeod Russel Holdings Plc, UK Profile McLeod Russel Holdings Plc is an international
company that manufactures and sells air filtration
Analysis For the year ended 30 September 1999, McLeod Russel Holdings Plc’s operating profit, before exceptional items, totalled &7.9 million, compared with fl 1.4 million, which it posted for the previous financial year. Total profit before taxation amounted to &7.4 million, compared with &l 1.5 million. These results were achieved on turnover of ElO7.2 million, against &I 14.1 million; the reduction arising mainly through the disposal of Bancrofts during May 1998. Group operating profitsto-sales, a key ratio for the group, was 7.4%, compared with its target level of 10%. Excluding the North American results, this ratio would have been 9.1%. The downturn in pre-tax preexceptional profits was broadly in line with expectations, at the time of the interim results announcement. As anticipated, the second half of the year showed a stronger performance, although the year as a whole continued to suffer from difficult trading conditions in both of the company’s core divisions. The international Clean Air business has been adversely affected by excess filter manufacturing capacity. This relates particularly to the lower value general commercial applications. According to the company, this has occurred because of the low barriers to entry in some markets and the growth of facilities management companies, which has contributed to a changed pattern of filter life cycles. Against this background, McLeod Russel’s strategy is to continue to launch new Key Figures (f million) McLeod Russel Holdings
Operating
Profit Before
Operating
Profit After Exceptional
Profit on Ordinary
Activities
Profit for the Financial Retained
Exceptional
Items Items
After Taxation
Year
Profit
Net Assets Earnings ‘Except
per Ordinary
per share
Contact Details Zhief Executive: 4ddress:
Share (Basic)
surface
coatings products.
products, to increasingly automate its manufacturing processes and to develop the service elements of its activities.
McLeod Russel Holdings’s results for the year reflect difficult trading conditions in most of the markets in which the group of companies operates. However, by ‘repositioning’ its activities, it is taking steps to develop the income stream from its business, improve profitability and counteract weak market demand. While this has been a difficult year for the company’s clean air sector, the successful disposal of its North American business, combined with the resultant focus on the integration and development of its European activities, place the division in a better position to take advantage of future opportunities in what remains a long-term growth market. The acquisition of Vokes should allow McLeod Russel to consolidate and strengthen its position in the UK clean-air market. The filtration industry is consolidating, and the combination of Vokes and McLeod Russel, through the Interfilta subsidiary, should create a strong player in the European air and liquid filtration sectors. n
1999
1998
Year ended 1997
107.2
114.1
7.9
Plc
Turnover
and
30.9 1996
1995
117.1
111.8
118.1
11.4
12.2
10.6
9.1
7.9
10.5
12.2
10.6
9.1
5.9
9.2
8.2
7.2
6.8
5.9
9.2
8.2
7.2
6.8
2.3
5.0
4.0
3.3
3.0
35.9
37.7
33.6
33.7
33.3
f0.11
f0.15
f0.14
fO.12
f0.12
data.
Ian Hazlehurst 2 Hitching Court Blacklands Way Abingdon Business Park Abingdon, Oxfordshire OX14 1RG UK
Tel: +44 1235 536677 Fax: +44 1235 536670 Web: www.mcleodrussel.com
Recent Events During September 1999 Mcleod Russel Holdings Plc announced that it had sold the businesses of its North American air filtration companies, Environmental Filter Corp and Environmental Filter Canada Ltd, to Filtration Group Inc of Chicago, Illinois, USA. More recently, the company has agreed the acquisition of the business and assets of Vokes Filtration from Invensys Plc for a cash consideration of f8 million.
l
l
April 2000
Industry Analyst
McLeod Russel Holdings Plc, UK Profile McLeod Russel Holdings Plc is an international
company that manufactures and sells air filtration
Analysis For the year ended 30 September 1999, McLeod Russel Holdings Plc’s operating profit, before exceptional items, totalled &7.9 million, compared with fl 1.4 million, which it posted for the previous financial year. Total profit before taxation amounted to &7.4 million, compared with &l 1.5 million. These results were achieved on turnover of ElO7.2 million, against &I 14.1 million; the reduction arising mainly through the disposal of Bancrofts during May 1998. Group operating profitsto-sales, a key ratio for the group, was 7.4%, compared with its target level of 10%. Excluding the North American results, this ratio would have been 9.1%. The downturn in pre-tax preexceptional profits was broadly in line with expectations, at the time of the interim results announcement. As anticipated, the second half of the year showed a stronger performance, although the year as a whole continued to suffer from difficult trading conditions in both of the company’s core divisions. The international Clean Air business has been adversely affected by excess filter manufacturing capacity. This relates particularly to the lower value general commercial applications. According to the company, this has occurred because of the low barriers to entry in some markets and the growth of facilities management companies, which has contributed to a changed pattern of filter life cycles. Against this background, McLeod Russel’s strategy is to continue to launch new Key Figures (f million) McLeod Russel Holdings
Operating
Profit Before
Operating
Profit After Exceptional
Profit on Ordinary
Activities
Profit for the Financial Retained
Exceptional
Items Items
After Taxation
Year
Profit
Net Assets Earnings ‘Except
per Ordinary
per share
Contact Details Zhief Executive: 4ddress:
Share (Basic)
surface
coatings products.
products, to increasingly automate its manufacturing processes and to develop the service elements of its activities.
McLeod Russel Holdings’s results for the year reflect difficult trading conditions in most of the markets in which the group of companies operates. However, by ‘repositioning’ its activities, it is taking steps to develop the income stream from its business, improve profitability and counteract weak market demand. While this has been a difficult year for the company’s clean air sector, the successful disposal of its North American business, combined with the resultant focus on the integration and development of its European activities, place the division in a better position to take advantage of future opportunities in what remains a long-term growth market. The acquisition of Vokes should allow McLeod Russel to consolidate and strengthen its position in the UK clean-air market. The filtration industry is consolidating, and the combination of Vokes and McLeod Russel, through the Interfilta subsidiary, should create a strong player in the European air and liquid filtration sectors. n
1999
1998
Year ended 1997
107.2
114.1
7.9
Plc
Turnover
and
30.9 1996
1995
117.1
111.8
118.1
11.4
12.2
10.6
9.1
7.9
10.5
12.2
10.6
9.1
5.9
9.2
8.2
7.2
6.8
5.9
9.2
8.2
7.2
6.8
2.3
5.0
4.0
3.3
3.0
35.9
37.7
33.6
33.7
33.3
f0.11
f0.15
f0.14
fO.12
f0.12
data.
Ian Hazlehurst 2 Hitching Court Blacklands Way Abingdon Business Park Abingdon, Oxfordshire OX14 1RG UK
Tel: +44 1235 536677 Fax: +44 1235 536670 Web: www.mcleodrussel.com
Recent Events During September 1999 Mcleod Russel Holdings Plc announced that it had sold the businesses of its North American air filtration companies, Environmental Filter Corp and Environmental Filter Canada Ltd, to Filtration Group Inc of Chicago, Illinois, USA. More recently, the company has agreed the acquisition of the business and assets of Vokes Filtration from Invensys Plc for a cash consideration of f8 million.
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