RNS Number:0712T
Centurion Electronics PLC
10 December 2003
Embargoed until: 07:00, Wednesday 10 December 2003
MAIDEN PRELIMINARY RESULTS
SIGNIFICANT GROWTH CONTINUES
Centurion Electronics plc ("Centurion" or the "Company"), the UK market leader
in the field of in-car audio-visual entertainment, is pleased to announce its
preliminary results for the year ended 30 September 2003.
Financial highlights for the year ended 30 September 2003
* 171% increase in profit on ordinary activities before taxation to
#1.18 million (2002: #435,000)
* 50% increase in turnover to #6.25 million (2002: #4.14 million)
* 59% increase in basic earnings per share to 4.45p (2002: 2.80p)
* 102% increase in diluted earnings per share to 4.27p (2002: 2.11p)
Operational highlights for the year ended 30 September 2003
* Successful in securing new research and supply agreements with
leading motor manufacturers including Nissan and Kia
* Signed first major pan-European contract with Toyota Europe
* Since launch in June 2003, new generation Plug & PlayTM has
become the biggest selling in-car multimedia product in the UK. Distribution
agreements now in place in Europe
* Ongoing development of new products and post year end launch of
Plug & Play BlueTM and ViewTechTM, focused on usability and affordability
Steven Cunningham, Chairman of Centurion, commented "The year to 30 September
2003 has been a time of major development, expansion, and innovation at
Centurion. We have consolidated our position as the UK's leading supplier of
in-car audio-visual entertainment systems, our professional range, CenturionTM,
has been extremely well received by some of the major names in the motor
manufacturing industry and we have signed our first major pan-European contract
with Toyota Europe. We have also made significant progress with our retail
offering and, in particular, our launch of Plug & Play BlueTM will potentially
give us access to a whole new customer base."
For further information please visit: www.ceplc.net or contact:
Steven Cunningham, Rosie Brown
Chairman Melissa Hubbard
Centurion Electronics Tavistock Communications
Tel: 01707 330550, Tel: 020 7920 3150
steven@ceplc.net rbrown@tavistock.co.uk
High resolution images are available for the media to view and download free of
charge from www.vismedia.co.uk
CHAIRMAN'S STATEMENT
INTRODUCTION
The year to 30 September 2003 has been a time of major development, expansion,
and innovation at Centurion. Since our admission to the Alternative Investment
Market (AIM) in December 2002 when we raised #2.30 million, we have consolidated
Centurion's position as the UK's leading designer and supplier of in-car
audio-visual entertainment systems. We have strengthened our relationships with
car manufacturers, franchise motor dealer groups, and leading multiple retailers
while establishing significant new ones.
In August 2003, Centurion raised a further #1.20 million, before expenses, by
way of a Placing of 1,904,761 new Ordinary Shares at a price of 63p with new and
existing institutional investors. In particular, these additional funds are
being used to support expansion into Europe and to provide working capital for
research and development to capitalise on successes with pan-European car
manufacturers.
RESULTS
In the year to 30 September 2003, turnover increased by 50% from #4.14 million
to #6.25 million whilst profit on ordinary activities before taxation grew by
171% from #435,000 to #1.18 million. The satisfactory outcome of an insurance
claim relating to the theft of stock in the prior year resulted in an
exceptional gain of #160,000 in the year. The growth in profit on ordinary
activities before taxation without this exceptional gain was 134%.
Basic earnings per share grew by 59% from 2.80p to 4.45p, and diluted earnings
per share by 102% from 2.11p to 4.27p.
These results, along with the capital raised at the time of the flotation and
issue of shares during the year, have strengthened the balance sheet with
shareholders' funds rising 358% to over #4.30 million.
During the year, the Company used net cash of #1.08 million to fund its
operating activities. At 30 September 2003, the Company had cash balances of
#1.71 million in addition to undrawn-down facilities of #4.20 million provided
by its principal bankers. It is the Board's present intention to finance
working capital from internally generated funds supported by the guaranteed
facilities from its bankers.
As a result of the year's satisfactory trading and the confidence with which the
Directors view the future, the Board is recommending a maiden final dividend for
the year of 0.8p per share, which, if approved, will be paid on 13 February 2004
to shareholders on the register at 16 January 2004.
SALES CHANNELS
During the year, our multi-channel sales strategy has achieved growth across the
Company. Most significant has been our success in securing new research and
supply agreements with leading motor manufacturers for our bespoke CenturionTM
systems. This is our professional range, available as a factory and dealer-fit
option and featuring our state of the art TFT LCD monitors designed for rear
seat entertainment.
In April, we signed a contract with Nissan to supply the 2003 model Nissan Micra
with an in-car DVD system, now available in all of Nissan's 229 dealerships in
the UK and in August, we began the supply of vehicle specific systems to Kia
Motors for their MPV range of vehicles. To date, over 300 systems have been
supplied to Kia, with sales increasing month on month.
Our second major product stream, Plug & PlayTM, is a portable retail system,
designed to plug into a car power socket. We have continued to expand the
number and range of its sales outlets and, through our concerted targeting of
franchised motor groups, Plug & PlayTM is now available from more than 400 car
dealerships. In December 2002, we signed an agreement with the second largest
car dealership group in the UK, CD Bramall Plc, adding it to the established
relationship we already have with the UK's largest car dealership group,
Pendragon Group Plc. Following the period end, Centurion was also named a
preferred supplier by Arnold Clark Automobiles Ltd, the UK's largest privately
owned motor group and Hartwell Plc, which has 46 dealerships, has agreed to
feature six of our products in its new "store in store" sites which showcase
accessories.
Equally importantly, we have sought to increase the visibility of Plug & PlayTM
on the high street. Plug & PlayTM has been reselected for Argos' autumn/ winter
catalogue and, in response to strong demand, Halfords increased the number of
its stores from which the Plug & PlayTM range is sold from 100 to 250. Since
its launch in January 2003, our "second generation" Plug & PlayTM has become
the biggest selling in-car multimedia product in the UK (source: GFK Marketing
Services).
EUROPEAN EXPANSION
The next stage of development for Centurion is the selective rollout of its
products into the wider European market. As previously stated, the Directors
believe that Europe remains approximately two years behind that of the UK and,
as such, represents enormous opportunities for the Company.
In January, we signed our first major pan-European contract with Toyota Europe
for the research, development, and supply of an integrated system for the Toyota
Avensis. This system is the first in an important programme of design and
development, currently including a number of new models for both Toyota and
Lexus, to be launched during 2004 and 2005. As an example, the system for the
Avensis will comprise a twin-screen system (screens in both headrests), a DVD
player in the car boot and games-compatible sockets for a Playstation. We
anticipate a market penetration of 4% with the Avensis, which has annual sales
of 167,000 in Europe, and an estimated take-up of 10-15% with some of the other
more expensive Toyota models, including Lexus.
We also continue to expand our existing relationships with motor manufacturing
customers, Fiat, Mazda and Alfa Romeo, as they launch our products into Europe
in 2004 and beyond.
Similarly, during the second half of the period, we made considerable progress
in generating market awareness of Plug & PlayTM in Europe, receiving orders
from Germany, Ireland, Belgium, France, Spain, and Holland. Going forward, we
plan to target further distributors in these countries and also expand our reach
into other European countries.
TECHNOLOGY AND PRODUCT DEVELOPMENT
Centurion has continued to maintain its competitive advantage through constant
innovation in terms of the design and performance of its core LCD TFT products.
This, together with unique patented designs relating to the integration of its
systems in an automotive environment, has, as I have already outlined, led to
significant new opportunities, particularly with motor manufacturers.
Product development is central to Centurion's growth strategy, and we continue
to focus on reducing the overall size of our system components whilst maximising
screen size and performance. Our "second generation" products, on the market
since January 2003, have larger screens and are the first to offer wireless
headphones. These are competitively priced but still "top of the range"
systems and since the year end, we have launched two exciting new products
focused on usability and affordability: Plug & Play BlueTM and ViewTechTM.
Plug & Play BlueTM is our first fully integrated carry bag DVD system which
plays DVD, VCD, SVCD, and CD. It has been available from the end of November
2003 and retails at #249. We have signed two new distribution agreements for
this system with Costco Wholesale UK Limited, the "member only" cash and carry
operator, and T2 retail (formerly Tandy electronic stores), which focuses on
solutions for the traveling consumer and is located in 15 motorway service
stations and within the John Lennon Airport Complex, in Liverpool.
ViewTechTM is a range of products featuring a 7 inch roof-mounted TFT LCD
screen with remote control, available since November 2003 and costing #399. This
range of products is designed for professional value-for-money installation and
will be supplied through, amongst others, over 300 independent
Centurion-supplied retailers with fitting capabilities.
During the period, we have strengthened our engineering team with the
appointment of Senior Product Engineers and a CAD Design Engineer in order to
concentrate on the research and development for motor manufacturer projects. An
additional 8,000 square feet of our new facility has been dedicated to research
and development, housing vehicle and component level test facilities for
environmental and electronic purposes.
NEW HEAD OFFICE
Centurion is now settled into its new Head Office facility in Welwyn Garden
City. The move, in May of this year, enabled us to bring our sales and
marketing, warehousing operation, engineering department, and research and
development laboratory under one roof, and it gives us the necessary space for
anticipated future growth. We have appointed a Head of Operations responsible
for all aspects of product logistics, warehousing, and purchasing, and, in order
to capitalise on increased business development opportunities, we have grown our
marketing and sales divisions.
Centurion also has an office in Taiwan, opened in November 2002, which is
responsible for liaison with suppliers, quality control, and research and
development throughout the Far East.
INDUSTRY RECOGNITION
Following on from our successes over the past twelve months, Centurion was again
named a Deloitte & Touche Technology Fast 50 award winner in the Eastern Region
and was also shortlisted as a "Best Newcomer" at the AIM Awards in October 2003.
COMPANY NOMINATED ADVISER AND STOCKBROKER
In October 2003, Centurion appointed Charles Stanley & Co. Ltd as its Nominated
Adviser and Stockbroker.
OUTLOOK
The last year has been one of major expansion for Centurion. Our professional
range, CenturionTM, has been extremely well received by some of the major names
in the motor manufacturing industry and we have signed our first major
pan-European contract with Toyota Europe.
We have made significant progress with our retail offering and, in particular,
our launch of Plug & Play BlueTM will potentially give us access to a whole new
customer base.
Looking forward, Centurion has received orders across its product range during
the first two months of the current financial year in excess of #3.5 million.
Furthermore, in addition to the motor manufacturer agreements already stated,
the Company is at an advanced stage of negotiations with several other
significant motor manufacturers for the development and supply of bespoke
systems. With the success of our UK business model firmly established, we now
believe that the time is right for Centurion to develop its business objective
to become the leading company for in-car audio-visual entertainment throughout
Europe.
I would like to thank the entire team at Centurion for their contribution to the
Company's achievements. I would also like to thank our shareholders, customers,
and business partners for their continued support.
Steven Cunningham
Chairman
Profit and loss account for the year ended 30 September 2003
Note 2003 2002
# #
Turnover 6,248,945 4,138,221
Cost of sales 3,165,886 2,316,764
Gross profit 3,083,059 1,821,457
Administrative expenses 1,803,641 1,277,539
Operating Profit 2 1,279,418 543,918
Interest payable and similar charges 3 (99,889) (108,827)
Profit on ordinary activities
before taxation 1,179,529 435,091
Taxation on profit on ordinary activities 4 308,401 115,759
Profit on ordinary activities after
taxation for the year 871,128 319,332
Dividends (including non-equity) 5 184,078 56,817
Retained profit for the financial year 687,050 262,515
Earnings per share 6
Basic 4.45p 2.80p
Diluted 4.27p 2.11p
All amounts relate to continuing activities.
All recognised gains and losses for the year are included in the profit and loss
account.
Balance sheet at 30 September 2003
2003 2003 2002 2002
# # # #
Fixed assets
Tangible assets 595,347 196,949
Current assets
Stocks 2,262,160 727,788
Debtors:
Trade debtors subject to financing 2,277,927 1,085,604
Less: non-returnable proceeds (898,599) (701,659)
1,379,328 383,945
Other debtors 376,484 261,883
Cash at bank and in hand 1,712,784 157,485
5,730,756 1,531,101
Creditors: amounts falling due
within one year 1,806,651 612,299
Net current assets 3,924,105 918,802
Total assets less current liabilities 4,519,452 1,115,751
Creditors: amounts falling due
after more than one year 141,863 161,969
Provisions for liabilities and charges 59,915 11,317
201,778 173,286
4,317,674 942,465
Capital and reserves
Called up share capital 219,676 340,000
Share premium account 3,348,483 270,000
Capital redemption reserve 130,000 -
Profit and loss account 619,515 332,465
Shareholders' funds 4,317,674 942,465
Analysis of shareholders' funds
Equity 4,317,674 342,465
Non-equity - 400,000
Convertible -equity - 200,000
Shareholders' funds 4,317,674 942,465
Cash flow statement for the year ended 30 September 2003
Note 2003 2003 2002 2002
# # # #
Net cash (outflow)/inflow from
operating activities 7 (1,083,269) 70,549
Returns on investments and
servicing of finance
Interest paid (99,889) (108,827)
Dividends paid (15,193) (41,624)
Finance lease interest (5,720) -
Net cash outflow from returns on
investments and servicing
of finance (120,802) (150,451)
Taxation
UK corporation tax paid (100,171) (54,752)
Capital expenditure and financial
investment
Purchase of tangible fixed assets (447,873) (86,825)
Sale of tangible fixed assets 14,261 11,000
(433,612) (75,825)
Cash outflow before financing (1,737,854) (210,479)
Financing
Short term import loans 670,025 77,736
Bank loans paid (27,083) (71,561)
Capital element of finance lease
rental payments (37,948) (18,825)
Share issues 3,056,659 500,000
Share options exercised 31,500 -
Redemption of preference shares (400,000) -
3,293,153 487,350
Increase in cash 8 1,555,299 276,871
Notes forming part of the financial statements for the year ended 30 September
2003
1 Basis of preparation and financial information
The financial information set out in this preliminary announcement has been
prepared on the same basis as the accounting policies used in the Company's 2002
statutory accounts.
The information shown for the years ended 30 September 2003 and 30 September
2002 does not constitute statutory accounts within the meaning of S240 of the
Companies Act 1985 and has been extracted from the full accounts for the years
ended 30 September 2003 and 30 September 2002 respectively.
The reports of the auditors on those accounts were unqualified and did not
contain a statement under either S237(2) or S237(3) of the Companies Act 1985.
The accounts for the year ended 30 September 2002 have been filed with the
Registrar of Companies. The accounts for the year ended 30 September 2003 will
be delivered to the Registrar of Companies in due course.
2 Operating profit
This is arrived at after charging/(crediting) 2003 2002
# #
Depreciation of tangible fixed assets 90,493 30,194
Auditors' remuneration - audit services 10,000 10,000
Exceptional items (see below) (160,000) 238,167
Operating leases - other 96,482 20,000
The exceptional item of #160,000 in the year ended 30 September 2003 is the
insurance proceeds relating to the theft of stock written off in the prior year
amounting to #238,167.
3 Interest payable and similar charges
2003 2002
# #
Loan interest 9,971 26,836
Discounting charges 62,540 63,450
Bank interest 27,378 18,541
99,889 108,827
4 Taxation on profit on ordinary activities
2003 2002
# #
Current tax
UK corporation tax on profits of the year 280,105 102,000
Adjustment in respect of previous years (20,302) 2,442
Total current tax 259,803 104,442
Deferred tax
Origination and reversal of timing difference 51,767 11,317
Adjustment in respect of previous years (3,169) -
Taxation on profit on ordinary activities 308,401 115,759
The tax assessed for the year is lower than the standard rate of corporation tax
in the UK. The differences are explained below:
2003 2002
# #
Profit on ordinary activities before taxation 1,179,529 435,091
Profit on ordinary activities at the standard rate of
corporation tax in the UK of 30% (2002 : 30%) 353,859 130,527
Effects of:
Expenses (allowable)/disallowable for tax purposes (7,721) (3,458)
Depreciation for year in excess of capital allowances (51,767) 1,201
Adjustment to tax charge in respect of previous years (20,302) 2,442
Loss on disposal of fixed assets - 2,200
Marginal relief (14,266) (28,470)
Current tax charge for year 259,803 104,442
5 Dividends
2003 2002
# #
Ordinary shares of 0.1p each
Paid #nil (2002 N/a) per share - -
Proposed 0.8p (2002 N/a) per share 184,078 -
Cumulative Convertible participating
preferred ordinary shares of #1 each
Paid #N/a (2002 : 5.4p) per share - 10,751
Proposed #N/a (2002 : 3.4p) per share - 6,855
184,078 17,606
Preference shares
Paid - 30,873
Proposed - 8,338
- 39,211
184,078 56,817
6 Earnings per share
Earnings per ordinary share have been calculated using the weighted average
number of shares in issue during the relevant financial periods. The weighted
average number of shares in issue for each period has been adjusted to take into
account the share split of 1,000 ordinary shares of 0.1 pence for every #1
ordinary share that took place on 4 November 2002. The weighted average number
of shares in issue for each period has also been adjusted to take account of the
reclassification of 200,000 Preferred ordinary shares as 196,667 Deferred shares
of #1 each and of the remaining 3,333 Preferred ordinary shares as 3,333,000
ordinary shares of 0.1 pence each. The weighted average number of shares in
issue has also been adjusted to reflect share issues in the year.
The weighted average number of equity shares in issue for the basic earnings per
share calculation is 19,576,108 (2002 10,000,000) and the earnings, being profit
after tax and preference dividends, are #871,128 (2002 #280,121).
The numerator for the diluted earnings per share disclosure is the same as the
basic earnings per share numerator.
The denominator for the diluted earnings per share disclosure is as follows:
2003 2002
Basic earnings per share denominator ordinary shares
of 0.1pence 19,576,108 10,000,000
Weighted average number of cumulative convertible
participating preferred ordinary shares
(prior to conversion) 319,603 3,259,948
Dilutative effect of company share option schemes 510,179 -
20,405,890 13,259,948
7 Reconciliation of operating profit to net cash (outflow)/inflow
from operating activities
2003 2002
# #
Operating profit 1,279,418 543,918
Depreciation 90,493 30,194
(Profit)/loss on sale of fixed assets (1,262) 7,334
Interest on finance leases 5,720 -
Increase in stocks (1,534,372) (236,115)
Increase in debtors (1,109,984) (347,068)
Increase in creditors 186,718 72,286
Net cash (outflow)/inflow from operating activities (1,083,269) 70,549
8 Reconciliation of net cash (outflow)/inflow
to movement in net funds/(debt) 2003 2003 2002 2002
# # # #
Increase in cash in the year 1,555,299 276,871
Cash (inflow)/outflow from changes
in debt and lease financing (604,994) 12,650
Change in net debt resulting from cash flows 950,305 289,521
New finance leases (54,017) (58,560)
Non-cash consideration in respect of
share issue - 60,000
Movement in net debt in the year 896,288 290,961
Net debt at start of year (128,337) (419,298)
Net funds/(debt) at end of year (note 9) 767,951 (128,337)
9 Analysis of net debt
At Other At
1 October Cash non-cash 30 September
2002 flow changes 2003
# # # #
Cash in hand and at bank 157,485 1,555,299 - 1,712,784
Debt due after 1 year (108,333) 27,083 - (81,250)
Debt due within 1 year (102,736) (670,025) - (772,761)
Obligations under finance leases (74,753) 37,948 (54,017) (90,822)
Total (128,337) 950,305 (54,017) 767,951
10 Copies of this announcement are available from the Company's offices at
Satellite House, City Park, Welwyn Garden City, Herts. AL7 1LY.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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