annual report 2005 metalrax group plc engineering specialists
business at a glance
highlights 1
chairman’s statement 2
chief executive’s review 6
financial review 12
corporate and social responsibility 13
directors and advisers 14
report of the directors 16
corporate governance 18
directors’ remuneration report 20
consolidated income statement 22
consolidated statement of recognised 
income and expenses 23
consolidated balance sheet 24
parent company balance sheet 25
consolidated cash flow statement 26
accounting policies 27
notes to the accounts 29
report of the independent auditors 42
five year record 43
financial calendar 43
notice of meeting 44
group companies 45
contents
metalrax group plc
metalrax is a broadbased manufacturing and marketing group
of businesses exporting to over 50 countries
precision manufacturing activities provide supplies to automotive
telecommunications offroad vehicles and bar display markets
engineering and support services provide surface coated metals
architectural steelwork mezzanine flooring and storage equipment
housewares operations produce and market the majority of
bakeware sold in great britain together with associated ranges of
kitchen tools
exports up
from 14 to 27
2004
2005
14
27 1 highlights annual report 2005
highlights
results in brief
2005 2004
£’000 £’000
revenue 100255 95167
group profit before taxation 7408 11406
group profit from 
continuing operations 5231 7964
earnings per 5p ordinary 
share 368p 761p
dividends per 5p ordinary 
share 540p 540p
operating profit 
£74m
revenues
£1003m 2 metalrax group plc engineering specialists
in december 2005 the group issued a trading update
which indicated that as with other businesses operating
in similar sectors we had been experiencing a tough and
competitive trading and economic environment
particularly from within our housewares activities where
we witnessed an adverse impact on volume and margin
subsequently our preliminary results for the year ended
31 december 2005 disclosed that performance reflected
analysts’ revised forecasts with revenue increasing to £1003
million producing a profit before taxation of  £74 million
during 2005 the engineering and storage products
division performed in line with expectations but as
reported a downturn in consumer spending and the
consequent decline in retail footfall impacted directly on
the housewares division as a result the business did not
see the level of sales upturn normally experienced in the
last quarter of the financial year and as shareholders will
be aware the operational gearing of the housewares
division is such that lost sales rapidly diminish profit
margins and bottom line results
across the group as a whole the downturn in united
kingdom revenue was more than compensated by
substantial increases achieved in europe north america
and other international markets
the year in review
the implementation of the strategic review conducted at
the end of 2004 coincided with what proved to be an
extremely disappointing year for a number of reasons
including having to contend with the demise of mg rover
and whilst the debt write off had been successfully
mitigated in time the subsequent loss of turnover was
not quickly replaced within the engineering and storage
products division despite these events the group’s
planned reorganisation continued throughout the year as
we strengthened the foundations on which to build the
new group structure
as part of the housewares division reorganisation the
second quarter of the year saw the termination of
manufacture of occasional furniture and accessories and
the business transformed into a design and sourcing
operation distributing and selling different ranges of
products to both the retail sector and direct via the
internet in the third quarter of the year we completed
our planned exit from manufacture in the volatile plastic
injection moulded products market with the sale of the
business in the final quarter of the year the bathroom
furniture business was closed
our two pressure diecasting foundry operations were
successfully consolidated onto one site during the third
quarter with expected benefits flowing through into
2006 the coil coating business acquired at the beginning
of the year has performed ahead of expectations and the
antivandal cabin manufacturing operation that we
purchased at the end of the year has made a promising
start with the group
we have recently announced the amalgamation of two of
our larger automotive component manufacturing facilities
that will bring significant economies of scale in the
second half of 2006 similarly we have commenced the
consolidation of our bearings company onto our site at
bordesley green where we shall significantly improve the
use of group assets the coil coating operations have also
now been brought together under a common management
team and we expect to realise further benefits in due course
strategic planning
the group strategic plan is regularly updated and was
reviewed by the board in january the next phase
implemented at the beginning of 2006 includes dividing
the group into three reporting segments


Summary:
 2 metalrax group plc engineering specialists
in december 2005 the group issued a trading update
which indicated that as with other businesses operating
in similar sectors we had been experiencing a tough and
competitive trading and economic environment
particularly from within our housewares activities where
we witnessed an adverse impact on volume and margin
subsequently our preliminary results for the year ended
31 december 2005 disclosed that performance reflected
analysts’ revised forecasts with revenue increasing to £1003
million producing a profit before taxation of  £74 million
during 2005 the engineering and storage products
division performed in line with expectations but as
reported a downturn in consumer spending and the
consequent decline in retail footfall impacted directly on
the housewares division as a result the business did not
see the level of sales upturn normally experienced in the
last quarter of the financial year and as shareholders will
be aware the operational gearing of the housewares
division is such that lost sales rapidly diminish profit
margins and bottom line results
across the group as a whole the downturn in united
kingdom revenue was more than compensated by
substantial increases achieved in europe north america
and other international markets
the year in review
the implementation of the strategic review conducted at
the end of 2004 coincided with what proved to be an
extremely disappointing year for a number of reasons
including having to contend with the demise of mg rover
and whilst the debt write off had been successfully
mitigated in time the subsequent loss of turnover was
not quickly replaced within the engineering and storage
products division despite these events the group’s
planned reorganisation continued throughout the year as
we strengthened the foundations on which to build the
new group structure
as part of the housewares division reorganisation the
second quarter of the year saw the termination of
manufacture of occasional furniture and accessories and
the business transformed into a design and sourcing
operation distributing and selling different ranges of
products to both the retail sector and direct via the
internet in the third quarter of the year we completed
our planned exit from manufacture in the volatile plastic
injection moulded products market with the sale of the
business in the final quarter of the year the bathroom
furniture business was closed
our two pressure diecasting foundry operations were
successfully consolidated onto one site during the third
quarter with expected benefits flowing through into
2006 the coil coating business acquired at the beginning
of the year has performed ahead of expectations and the
antivandal cabin manufacturing operation that we
purchased at the end of the year has made a promising
start with the group
we have recently announced the amalgamation of two of
our larger automotive component manufacturing facilities
that will bring significant economies of scale in the
second half of 2006 similarly we have commenced the
consolidation of our bearings company onto our site at
bordesley green where we shall significantly improve the
use of group assets the coil coating operations have also
now been brought together under a common management
team and we expect to realise further benefits in due course
strategic planning
the group strategic plan is regularly updated and was
reviewed by the board in january the next phase
implemented at the beginning of 2006 includes dividing
the group into three reporting segments