RNS Number:5141Y
Centurion Electronics PLC
11 May 2004
Embargoed until 07.00, Tuesday 11 May 2004
Centurion Electronics plc
Interim results for the six months ended 31 March 2004
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
interim results for the six months ended 31 March 2004.
Highlights for the six months ended 31 March 2004
* 60% increase in turnover to #4.43m (2003: #2.76m)
* Operating profits before exceptional items up 29% to #566,000 (2003: #440,000)
* Operating profits including the exceptional receipt of #470,000 keyman
insurance proceeds were #1.04m
* 81% increase in earnings per share to 3.01p (2003: 1.66p)
* #1.17m raised (after expenses) by way of a placing to new institutional
investors
* Successful launch of Plug & Play BlueTM and ViewtechTM ranges
* Post period end agreement with Kia Motors UK Ltd to supply rear seat
entertainment systems to their entire range of vehicles
Brian Hendon, Chairman of Centurion commented: "The in-car rear seat
entertainment market continues to expand rapidly and we believe that Centurion
is well positioned and structured to achieve further substantial growth across
all market sectors.
"We remain committed to our strategy of creating and supporting innovative
products to provide our customers with high quality, cost-effective solutions
and are currently working on the development of entertainment systems for a
number of motor manufacturers and vehicle models with launch dates extending
beyond the current year. With good visibility of earnings from motor
manufacturers and retail groups we are confident that the results for the second
half of the year will demonstrate continuing strong progress."
For further information please visit www.ceplc.net or contact:
Brian Hendon Russell Cook Jeremy Carey / Claire Melly
Centurion Electronics Charles Stanley & Co. Ltd Tavistock Communications
Tel: 01707 330550 Tel: 020 7739 8200 Tel: 020 7920 3150
Chairman's statement
This is my first statement since being appointed Chairman on 26 January 2004
following the sudden death of Steven Cunningham. On behalf of the Board of
Directors, our employees and investors I wish to extend our condolences to his
wife and family. Under his guidance as Chairman and Chief Executive, Centurion
developed from a small vehicle security company to the UK's leading supplier of
in-car entertainment equipment.
During the last six months to 31 March 2004, I am pleased to report that
Centurion has developed and expanded its business in all areas. New products
have been launched into the market, new sales channels have been opened in the
UK and Europe and relationships with existing customers have been extended.
We have made a significant financial investment in both people and
infrastructure to ensure that the Company is well placed to deliver on existing
contracts and win further new business.
Results
In the six months to 31 March 2004, turnover increased by 60% to #4.43 million
compared to #2.76 million for the corresponding period last year. Operating
profits increased from #439,592 to #1.04 million. Included in operating profits
is exceptional operating income of #470,000 being the net proceeds of a keyman
insurance policy for Steven Cunningham. The growth in operating profits
excluding the exceptional income is 29%.
While basic earnings per share grew by 81% to 3.01 pence per share for the six
months to 31 March 2004 compared with 1.66 pence for the six months to 31 March
2003, earnings per share before receipt of the keyman insurance and related
costs were 1.53 pence. Diluted earnings per share rose 83% to 2.92 pence from
1.60 pence.
In March 2004 Centurion raised a further #1.21 million before expenses by way of
a placing of 1,100,000 Ordinary Shares at a price of 110p to new institutional
investors.
The Directors have not declared an interim dividend.
Product Development
We remain highly committed to research and development for both our retail and
OEM offerings and we continue to make substantial investment in our new product
pipeline. In March 2004 we formed a partnership with a new research and
development company based in Taiwan and we will work with them to continue to
push the boundaries of in-car audio-visual entertainment, adding new features
and improving functionality. The design of new products continues to meet the
EU regulations for safety and end-of-life vehicle laws.
In December 2003 we launched the Plug & Play BlueTM and ViewtechTM ranges
designed to complement our existing product offerings and compete in the mass
market. Both have exceeded management's expectations and, in particular, Plug &
Play BlueTM has enabled us to win new retail customers.
Later this year we also plan to launch a range of products for the portable home
and leisure market. These will incorporate the latest in technology and design
and will be available to meet the Christmas demand from retailers.
Sales Channels
OEM
The Company announced on 26 April 2004 that we have extended our relationship
with Kia Motors UK Ltd and will be supplying rear-seat entertainment systems to
their entire range of vehicles. Kia currently has a special promotion running
whereby all of its Sedona models sold between April and the end of June are
fitted with a Centurion roof-mounted DVD system as standard. Kia is supporting
this promotion through a national newspaper advertising campaign featuring the
Sedona and our system.
Another of our key customers, Toyota Motor Marketing Europe NV/SA, is currently
running a national television advertising campaign for the Corolla Verso which
is also based around the inclusion of a Centurion twin-headrest-screen DVD
system. Our system is fitted as standard on the top specification model of the
Corolla Verso in the UK and is available as a vehicle option Europe wide.
We expect both of these campaigns to raise the profile of in-car entertainment
systems in general and of our systems in particular.
Retail
As stated at the time of our Annual General Meeting on 10 February 2004, our
business with key retailers was slower than expected over the Christmas period
and retail margins continue to be under pressure; however, current indications
are that, with the launch of our new generation 6.5-inch screen and other
products in the second half of the year, the retail business will continue to
grow. Our new 8-inch Plug & Play BlueTM will be in the Argos Autumn Winter
catalogue, which will now feature two Centurion products compared with only one
previously.
Plug & PlayTM is also doing well with motor dealer groups. We have benefited in
our dealings with motor manufacturers by our ability to provide 'after market'
products as well as designing bespoke systems. Motor manufacturers selling Plug
& PlayTM products throughout their dealerships include Kia Motors UK Ltd and
Fiat UK Ltd.
Infrastructure
Building
Our new facility in Welwyn Garden City has recently been expanded to incorporate
vehicle development bays, a new research and development laboratory a quality
testing laboratory and a bespoke designed pick and pack area. This capital
investment meets the high quality standards required by motor manufacturers and
further demonstrates our commitment to growing our market share of OEM business.
People
Investment in high quality personnel and processes is key to supporting our
future growth strategy. Over the past few months, senior management has been
strengthened in all areas of the business. A new position of Head of Human
Resources was created in February leading to the recruitment of additional
quality, project, engineering and sales managers with particular skill-sets and
experience of OEMs.
Quality
The Company is now a first-tier supplier into the motor manufacturers and we
have developed quality systems throughout the business to support this and are
currently implementing ISO9001:2000.
Europe
Following a review of our European strategy, we have now appointed a specialist
European sales consultancy to develop a network of manufacturers representatives
located in key cities across Europe. These representatives will be responsible
for directly marketing our products to improve both the speed and the
effectiveness of their take-up.
We have also designed and packaged a range of products especially for the
European market, which was launched at the Sinsheim Car Sound show in Germany at
the end of April. The trade response was extremely encouraging.
Outlook
The in-car rear-seat entertainment market continues to expand rapidly and
Centurion is well positioned and structured to achieve further substantial
growth across all market sectors.
We remain committed to our strategy of creating and supporting innovative
products to provide our customers with high quality, cost effective solutions
and we are currently working on the development of entertainment systems for a
number of motor manufacturers and vehicle models with launch dates extending
beyond the current year.
The Board has increased the level of investment both of infrastructure and, in
particular, staffing across the Company. We anticipate that this increased
level of investment will secure Centurion's position as the UK's leading
supplier of in-car audio-visual entertainment equipment and will leave the
Company well positioned to take advantage of the various opportunities which
continue to present themselves, both in the UK and abroad. With good visibility
of earnings from motor manufacturers and retail groups, we are confident that
the results for the second half of the year will demonstrate continuing strong
progress.
I would like to thank the team at Centurion for their hard work over the last
few months. They have demonstrated, under difficult circumstances, their
commitment to the continued success of the Company and to retaining its leading
position in the field of automotive audio-visual entertainment.
Finally, I would also like to thank our customers, business partners and
investors for their continued support over the last six months. We look forward
to working together with them to achieve our goals.
Profit and loss account for the six months ended 31 March 2004
Note Unaudited Unaudited Audited
6 months to 6 months to Year to
31 March 31 March 30 September
2004 2003 2003
As restated
# # #
Turnover 4,425,971 2,761,496 6,248,945
Cost of sales 2,480,398 1,526,409 3,165,886
Gross profit 1,945,573 1,235,087 3,083,059
Administrative expenses (1,379,555) (795,495) (1,963,641)
Exceptional item - Other
operating income 2 470,000 - 160,000
Operating Profit 2 1,036,018 439,592 1,279,418
Interest payable and similar charges (80,006) (41,700) (99,889)
Profit on ordinary activities
before taxation 956,012 397,892 1,179,529
Taxation on profit on ordinary
activities 257,000 103,896 308,401
Profit on ordinary activities
after taxation 699,012 293,996 871,128
Dividends - - 184,078
Retained profit for the
financial period 699,012 293,996 687,050
Earnings per share 3
Basic 3.01p 1.66p 4.45p
Diluted 2.92p 1.60p 4.27p
All recognised gains and losses for the period are included in the profit and
loss account.
Balance sheet as at 31 March 2004
Unaudited Unaudited Audited
6 months to 6 months to Year to
31 March 31 March 30 September
2004 2003 2003
# # #
Fixed assets
Tangible assets 774,516 478,909 595,347
Current assets
Stocks 2,892,643 1,465,743 2,262,160
Debtors:
Trade debtors subject to financing 2,787,956 1,688,353 2,277,927
Less: non-returnable proceeds (848,311) (688,434) (898,599)
1,939,645 999,919 1,379,328
Other debtors 877,462 215,790 376,484
Cash at bank and in hand 2,432,136 1,029,491 1,712,784
8,141,886 3,710,943 5,730,756
Creditors: amounts falling due
within one year (2,434,983) (1,296,393) (1,806,651)
Net current assets 5,706,903 2,414,550 3,924,105
Total assets less current liabilities 6,481,419 2,893,459 4,519,452
Creditors: amounts falling due
after more than one year (199,617) (136,319) (141,863)
Provisions for liabilities and charges (59,915) (11,317) (59,915)
6,221,887 2,745,823 4,317,674
Capital and reserves
Called up share capital 220,881 217,667 219,676
Share premium account 4,552,479 2,171,695 3,348,483
Capital redemption reserve 130,000 130,000 130,000
Profit and loss account 1,318,527 226,461 619,515
Shareholders' funds 6,221,887 2,745,823 4,317,674
Cash flow statement for the six months ended 31 March 2004
Note Unaudited Unaudited Audited
6 months to 6 months to Year to
31 March 31 March 30 September
2004 2003 2003
# # #
Net cash outflow from operating
activities 5 (277,741) (243,672) (1,083,269)
Returns on investments and
servicing of finance
Interest paid (80,006) (41,700) (99,889)
Preference dividend paid - (14,219) (15,193)
Finance lease interest (4,227) - (5,720)
Net cash outflow from returns
on investments and servicing
of finance (84,233) (55,919) (120,802)
Taxation
UK corporation tax received/(paid) 18,897 - (100,171)
Capital expenditure and
financial investment
Purchase of tangible fixed assets (185,336) (325,216) (447,873)
Sale of tangible fixed assets - 12,650 14,261
(185,336) (312,566) (433,612)
Equity dividends paid (184,078) - -
Cash outflow before financing (712,491) (612,157) (1,737,854)
Financing
Short term import loans 202,880 - 670,025
Bank loans (paid)/advanced 48,499 (14,583) (27,083)
Capital element of finance lease
rental payments (24,736) (10,616) (37,948)
Share options exercised 31,500 - 31,500
Redemption of preference shares - (400,000) (400,000)
Issue of share capital (net of
expenses) 1,173,700 1,909,362 3,056,659
1,431,843 1,484,163 3,293,153
Increase in cash for the period 6, 7 719,352 872,006 1,555,299
Notes to the interim report
1 Accounting policies
The financial information contained in this interim statement has been prepared
on the basis of the accounting policies set out in the Company's audited
financial statements for the year ended 30 September 2003 which have been
applied consistently.
2 Operating Profit and restatement
Unaudited Unaudited Audited
6 months to 6 months to Year to
31 March 31 March 30 September
As restated
2004 2003 2003
# # #
This is arrived at after
(crediting)/charging:
Exceptional items (see below) (470,000) - (160,000)
The exceptional item in the six months ended 31 March 2004 is included in other
operating income and relates to insurance proceeds from the keyman policy held
on Steven Cunningham which were paid out on his death. Exceptional costs
amounting to #30,000 arising since his death have been set against this income.
The exceptional item of #160,000 in the year ended 30 September 2003 relates to
insurance proceeds arising from the theft of stock written off in 2002. This
was previously included within administrative expenses and is now shown as a
separate item.
3 Earnings per share
Earnings per ordinary share have been calculated using the weighted average
number of shares in issue during the relevant financial periods. These take
into account the issue of 105,000 ordinary shares on 14 October 2003 and the
issue of 1,100,000 ordinary shares on 9 March 2004. The weighted average number
of shares in issue for the periods ending 31 March 2003 and 30 September 2003
have 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 of those two comparative
periods 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 equity shares in issue for the basic earnings per
share calculation is 23,239,207 (2003 19,576,108) and the earnings, being profit
after tax and preference dividends, are #699,012 (2003 #871,128).
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:
Unaudited Unaudited Audited
6 months to 6 months to Year to
31 March 31 March 30 September
2004 2003 2003
# # #
Basic earnings per share
denominator ordinary
shares of 0.1pence 23,239,207 17,704,859 19,576,108
Weighted average number of
cumulative convertible
participating preferred ordinary
shares (prior to conversion) - 640,962 319,603
Dilutive effect of company share
option schemes 714,468 66,595 510,179
23,953,675 18,412,416 20,405,890
4 Taxation
The taxation charge has been calculated on the estimated year end rate.
5 Reconciliation of operating profit to net cash outflow from operating
activities
Unaudited Unaudited Audited
6 months to 6 months to Year to
31 March 31 March 30 September
2004 2003 2003
# # #
Operating profit 1,036,018 439,592 1,279,418
Depreciation 76,877 30,258 90,493
(Profit)/loss on sale of fixed assets - 348 (1,262)
Interest on finance leases 4,227 - 5,720
Increase in stocks (630,483) (737,955) (1,534,372)
Increase in debtors (1,061,295) (569,881) (1,109,984)
Increase in creditors 296,915 593,966 186,718
Net cash outflow from operating activities (277,741) (243,672) (1,083,269)
6 Reconciliation of net cash inflow to movement in net funds/(debt)
Unaudited Unaudited Audited
6 months to 6 months to Year to
31 March 31 March 30 September
2004 2003 2003
# # #
Increase in cash in the year 719,352 872,006 1,555,299
Cash (inflow)/outflow from changes in
debt and lease financing (226,643) 41,539 (604,994)
Change in net debt resulting from
cash flows 492,709 913,545 950,305
New finance leases (70,710) (16,340) (54,017)
Movement in net debt in the period 421,999 897,205 896,288
Net funds/(debt) at start of period 767,951 (128,337) (128,337)
Net funds at end of year (note 7) 1,189,950 768,868 767,951
7 Analysis of net funds
At Other At
1 October Cash non-cash 31 March
2003 flow changes 2004
# # # #
Cash in hand and at bank 1,712,784 719,352 - 2,432,136
Debt due after 1 year (81,250) (28,166) - (109,416)
Debt due within 1 year (772,761) (223,213) - (995,974)
Obligations under finance leases (90,822) 24,736 (70,710) (136,796)
(226,643)
Total 767,951 492,709 (70,710) 1,189,950
8 Non-statutory Accounts
The financial information contained in this report does not constitute full
statutory accounts as defined by section 240 of the Companies Act of 1985.
The financial information in respect of the year ended 30 September 2003 has
been extracted from the statutory accounts for that year which have been filed
with the Registrar of Companies. The auditors report on those accounts was
unqualified.
Copies of this report are being sent to all shareholders and are available from
the Company's offices at Satellite House, City Park, Swiftfields, Welwyn Garden
City, Hertfordshire AL7 1LY.
INDEPENDENT REVIEW REPORT TO CENTURION ELECTRONICS PLC
Introduction
We have been instructed by the Company to review the profit and loss account for
the six months ended 31 March 2004, the balance sheet as at 31 March 2004, the
cash flow statement for the six months ended 31 March 2004, and notes 1 to 8 to
the interim report. We have read the other information contained in the interim
report and considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.
This report is made solely to the Company in accordance with the terms of our
engagement to assist the Company in meeting the requirements of the rules of the
London Stock Exchange for companies trading securities on the Alternative
Investment Market. Our review has been undertaken so that we might state to the
Company those matters we are required to state to it in this report and for no
other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company for our review work, for
this report, or for the conclusions we have reached.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. Where a company
is fully listed, the directors are responsible for preparing the interim report
in accordance with the Listing Rules of the Financial Services Authority which
require that the accounting policies and presentation applied to the interim
figures should be consistent with those applied in preparing the preceding
annual accounts except where any changes, and the reasons for them, are
disclosed. The directors of Centurion Electronics plc have voluntarily complied
with this requirement in preparing the interim report.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of the Company's management and
applying analytical procedures to the financial information and underlying
financial data and, based thereon, assessing whether the accounting policies and
presentation have been consistently applied, unless otherwise disclosed. A
review excludes audit procedures such as tests of controls and verification of
assets, liabilities, and transactions. It is substantially less in scope than
an audit performed in accordance with United Kingdom Auditing Standards and,
therefore, provides a lower level of assurance than an audit. Accordingly, we
do not express an audit opinion on the financial information.
Review conclusion
On the basis of our review, we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 March 2004.
BDO Stoy Hayward LLP
Chartered Accountants
London
10 May 2004
This information is provided by RNS
The company news service from the London Stock Exchange
END
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