AGM Statement
24/04/2002
At today's Annual General Meeting, Mr David Gawler, Chairman & Chief Executive made the following statement:
"The past financial year has seen significant changes at Charter plc. During the year I was appointed Chairman and Chief Executive, the composition of much of the Board changed and the Group's global divisional management teams were strengthened.
You will have seen from the Annual Report for 2001, which we are considering today, that we have initiated a number of measures to restructure our activities. These initiatives included the closure of loss-making businesses and the reduction of the Group's ongoing cost base. A number of business units and plants in both Howden and Esab have been closed, including the latter's headquarters in Atlanta. The new Esab global management team, which was appointed during the fourth quarter, and is based in Europe, has embarked on a programme to improve both efficiency and cost effectiveness.
Whilst the Group incurred substantial exceptional costs last year, I am confident that the initiatives taken will provide a more stable platform for profitable growth and enhanced cash flow in the future. We continue to look for opportunities to streamline the Group's operations.
Whilst the Group's underlying operating profit for the full year ended 31 December 2001 of £37.2 million was down on the previous year, second half underlying operating profit was £23.1 million, 64% up on the first half. The Air and Gas Handling Division, Howden, and the Specialised Engineering Division, both of which reported operating losses in the first half, successfully generated profits sufficient in the second half for both divisions to record an underlying operating profit for the full year.
The complexity of the task to improve the profitability and cash flow of the Group should not be underestimated. The two global Divisions, Esab and Howden, together with the Specialised Engineering businesses, operate through some 130 business units in 25 countries across the world. Additionally, several of these business units are only partly owned, two subsidiaries are listed separately on local stock exchanges and certain interests are held through joint venture arrangements.
The management of such a diverse organisation is a major challenge. Consequently, we have invested in a major upgrade of our worldwide financial and management information systems. This programme, which is substantially complete, will provide the necessary information to effectively manage and monitor the underlying performance of the Group's activities.
The Group has made a reasonable start in the first quarter of 2002 with each Division trading profitably, but economic trading conditions remain uncertain, particularly in our key markets in the Americas. On balance, however, we continue to look forward to further steady progress in the current year."
BOARD CHANGES
As previously announced in the Preliminary Results released on 5 March 2002, Mr Martin Taylor and Mr Neil Johnson retired as Non-Executive Directors, at the conclusion of today's Annual General Meeting.
Mr Taylor was Deputy Chairman, Senior Independent Non-Executive Director and Chairman of the Funding & Audit, Remuneration and Nominations Committees and has been succeeded in these roles by Mr Homi Mullan who joined the board in December 2001.
Contact
Andrew Fenwick, Pamela Small, Brunswick +44 (0) 20 7404 5959