RNS Number:3097K
Deltron Electronics PLC
10 May 2000
Deltron Electronics plc
Interim Results for the six months ended 31 March 2000
Deltron Electronics plc ("Deltron"), one of the leading
electromechanical component solution providers in Europe,
is delighted to announce record pre-tax profits for the
half year to 31 March 2000.
Financial Highlights 2000 1999
Turnover* #25.2 million #17.4 million
Pre-tax profits (pre-
(pre-amortisation) #1.7 million #0.219 million
Earnings per share
(pre-amortisation) 5.3 pence 0.8 pence
Interim dividend 1.0 pence 0.5 pence
Cashflow from op.
Activities #2.3 million #0.4 million
* Acquisitions contributed sales of #4.05 million
Key Points
- Buoyant market conditions being experienced across
Europe
- Supplier to communications and e-commerce
infrastructure builders
- CEM sector is the fastest growing, and Deltron's
largest, market segment
- Heavy investment in IT facilities to support
suppliers and customers
- Pan European expansion continues
Paul Gourmand, Chairman of Deltron said.... "We believe
we have now entered a period of major expansion for the
Group's products and it is an opportunity that we intend
to fully exploit. With ten operations across Europe -
covering some 70% of the EU market by value - we have
become a leading player in a specialised area of the
market. We will continue to build on that success."
For further information contact:
Christopher Sawyer 020 7466 5000 (today)
Chief Executive, Deltron Electronics plc 01638 561156 (thereafter)
Andy Yeo/Kirsty Robeson 020 7466 5000
Buchanan Communications
Chairman's Statement
Introduction
The first half of this year has proved to be an
exceptionally busy and successful period for Deltron. Not
only have we recovered from the lows of last year, but
today report record interim profits before tax and
goodwill amortisation of #1.7m (1999: #0.2m). We also
completed our first acquisition in Germany, concluded our
first Pan-European master distribution agreement and
commenced direct operations in Ireland.
Results
Looking at organic growth, sales on continuing operations
of #21.1 million (1999: #17.4m) rose 21%, reflecting the
buoyant market conditions currently being experienced
across Europe. Indeed, even though these Sterling growth
figures are excellent, it still substantially understates
the level of growth achieved outside the UK. On a
comparable basis, order intake has risen by 45% in Euro's
compared to only 29% in Sterling.
One of our key actions last year was to re-organise the
priorities of the business. We continued to make focused
investments in new products, infrastructure and people
and this has materially improved service and productivity
levels. The initial benefits of this can be clearly seen
in the Interim numbers. In the first half of 1999, our
SG&A (selling, distribution and admin.) expenses stood at
32.7% of sales. In the first half of 2000, this has
reduced to 26.4%.
The combined effect of strong sales growth, broadly
maintained gross margins and reduced SG&A expenses, has
produced operating margins of 8.0% - more than double the
level of H1 1999 and 60% higher than the full year.
Pre-tax profits (pre-amortisation of goodwill) stood at
#1.7 million (1999: #0.2m), a substantial improvement
over last year. Our goodwill amortisation charge in the
first half was #86,000 (1999: nil). We have continued to
generate cash from operations and despite spending over
#1.8m on acquisitions, our net debt position of #7.7m at
31 March is not materially higher than at the year end.
With shareholders funds at #6.4 million, gearing has been
substantially reduced from 248% at March 1999 to 121%,
with interest cover a solid 6.6 times.
Dividend
As a result of our return to more normal levels of
profitability, and as a sign of confidence for the
future, the directors have declared an interim dividend
of 1.0p. This is double last year's level of 0.5p. It
will be paid on 18 August 2000 to shareholders on the
register at 14 July 2000.
Trading Outlook
As a sector, the electronic component distributors are
enjoying their best trading conditions for many years and
whilst we too are experiencing a major improvement in
trading performance, the dynamics driving the
electromechanical and passive component sector are based
on subtly different, but related factors.
We have no exposure to semiconductors and therefore we
have not enjoyed the direct benefit of rising prices and
volumes, over recent months, as the demand for digital
products has surged. However, we are a major intermediate
supplier of electromechanical and passive components to
the communications and e-commerce infrastructure
builders. Hence the rising demand for products and
services in mobile telecommunications and investment in
Internet infrastructure has been and continues to be of
direct and substantial benefit to us.
There has also been a marked increase in the level of
activity amongst the Contract Electronic Manufacturers
(CEMs) as the global move towards outsourcing and vendor
reduction continues. We already have long and well
established relationships with the Original Equipment
Manufacturers who are parcelling out the outsourcing
contracts and some 80% of our sales are designed-in for
individual products and applications. In addition, as a
truly Pan-European solutions provider, we are uniquely
able to support these CEMs wherever they choose to build
their products. The CEM sector is now the fastest growing
segment of the electronic components market and is likely
to account for up to a quarter of Deltron's sales in the
current year.
All of the major Continental European economies are
enjoying positive and sustainable levels of economic
growth and so Deltron is benefiting from the increase in
industrial activity. Whilst the current level of Sterling
versus the Euro is generally unhelpful in UK terms, this
has been more than offset by the fact that Deltron now
generates only around 40% of its sales in the UK.
To ensure that Deltron is able to capitalise on its
position as one of the leading electromechanical
component solution providers in Europe we have been
investing heavily in information technology facilities to
support our suppliers and customers. An IT pilot, which
provides a common platform for all of our operating
companies, went live in April and the intention is to
offer a business to business capability by the year end
to all of our suppliers and customers. This will feature
logistics support, stock information, EDI, Internet and
other e-commerce features.
Summary
We believe we have now entered a period of major
expansion for the Group's products and it is an
opportunity that we intend to fully exploit. With ten
operations across Europe - covering some 70% of the EU
market by value - we have become a leading player in a
highly specialised area of the market. We will continue
to build on that success.
Group Profit and Loss Account (unaudited)
for the six months ended 31 March
Year ended
30 September
2000 1999 1999
Note #000 #000 #000
Turnover:
Continuing operations 21,132 17,402 38,146
Acquisitions 4,050 - -
------- ------- --------
25,182 17,402 38,146
Cost of sales (16,520) (11,145) (24,550)
------- ------- --------
Gross profit:
Continuing operations 7,473 6,257 13,596
Acquisitions 1,189 - -
------- ------- --------
8,662 6,257 13,596
Selling and
distribution costs (2,340) (1,862) (4,443)
Administrative costs (4,314) (3,461) (7,116)
Exceptional costs 4 - (195) (205)
------- ------- --------
Operating profit:
Continuing operations 1,742 559 1,832
Acquisitions 266 - -
------- ------- --------
2,008 559 1,832
Interest payable (314) (340) (596)
Interest receivable 9 22
-
------- ------- --------
Profit before tax and 1,703 219 1,258
goodwill amortisation
Goodwill amortisation (86) - (20)
------- ------- --------
Profit before tax 1,617 219 1,238
Taxation 2 (577) (71) (474)
------- ------- --------
Profit on ordinary
activities after tax 1,040 148 764
Dividends (231) (97) (311)
------- ------- --------
Profit retained for the
financial period 809 51 453
===== ===== =====
Earnings per share - 3 4.9p 0.8p 3.9p
basic
Earnings per share -
diluted 3 4.8p 0.8p 3.8p
Adjusted earnings per 3 5.3p 0.8p 4.0p
share - basic
===== ===== =====
Dividends per share 1.0p 0.5p 1.5p
===== ===== =====
Total Recognised Gains and Losses (unaudited)
for the six months ended 31 March
Year ended
30 September
2000 1999 1999
#000 #000 #000
Profit for the period 1,040 148 764
Exchange differences 141 (76) (227)
------- ------- --------
Total gains and losses
recognised during the period 1,181 72 537
===== ===== =====
Movement in Shareholders' Funds (unaudited)
for the six months ended 31 March
Year ended
30 September
2000 1999 1999
#000 #000 #000
Opening shareholders' funds 4,081 2,350 2,350
------- ------- --------
Profit for the period 1,040 148 764
Dividends (231) (97) (311)
Share capital issued 1,317 252 1,136
Goodwill - 3 369
Exchange differences 141 (76) (227)
------- ------- --------
Increase/(decrease) in
shareholders' funds for the 2,267 230 1,371
period
------- ------- --------
-- -- -
Closing shareholders' funds 6,348 2,580 4,081
===== ===== =====
Group Balance Sheet (unaudited)
as at 31 March
As at
30 September
2000 1999 1999
#000 #000 #000
Fixed assets
Intangible assets 4,510 - 1,018
Tangible assets 5,262 4,874 5,120
------- ------- --------
9,772 4,874 6,138
Current assets
Stocks 5,690 4,672 5,412
Debtors 11,891 8,204 9,782
Cash 1,560 2,024 1,727
------- ------- --------
19,141 14,900 16,921
Creditors:
Amounts falling due within
one year (15,527) (11,936) (14,503)
------- ------- --------
Net current assets 3,614 2,964 2,418
------- ------- --------
Total assets less current
liabilities 13,386 7,838 8,556
Creditors:
Amounts falling due after
more than one year (6,729) (4,949) (4,165)
Deferred income (309) (309) (310)
------- ------- --------
6,348 2,580 4,081
===== ===== =====
Capital and reserves
Called up share capital 1,108 966 1,012
Reserves 5,240 1,614 3,069
------- ------- --------
Equity shareholders' funds 6,348 2,580 4,081
===== ===== =====
Group Cash Flow Statement (unaudited)
for the six months ended 31 March
Year ended
30 September
2000 1999 1999
Note #000 #000 #000
Cash flow from operating 5 2,284 383 1,858
activities
Returns on investment
and servicing of finance (340) (304) (541)
Taxation (708) (684) (1,160)
Capital expenditure (395) (197) (521)
Acquisitions 6 (1,802) (1,025) (1,956)
Equity dividend paid (217) (450) (551)
------- ------- --------
Cash flow before (1,178) (2,377) (2,871)
financing
Financing 2,028 (502) (818)
------- ------- --------
Change in cash 850 (2,879) (3,689)
===== ===== =====
Reconciliation of cash
flow to movement in net
debt
Opening net debt (7,154) (4,141) (4,141)
------- ------- --------
Change in cash 850 (2,879) (3,689)
Cash flow from change in
debt (1,242) 675 805
------- ------- --------
Change in net debt (392) (2,204) (2,884)
Acquired with subsidiary - - (61)
Inception of finance
leases (118) (86) (168)
Amortisation of issue
costs - - (30)
Exchange differences (16) 29 130
------- ------- --------
Movement in net debt (526) (2,261) (3,013)
------- ------- --------
Closing net debt (7,680) (6,402) (7,154)
===== ===== =====
Review Report by the Auditors to Deltron Electronics plc
Introduction
We have been instructed by the company to review the
financial information set out on pages 4 to 7 and 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.
Directors' responsibilities
The interim report, including the financial information
contained therein, is the responsibility of, and has been
approved by the directors. The listing rules of the
London Stock Exchange 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.
Review work performed
We conducted our review in accordance with guidance
contained in Bulletin 1999/4 issued by the Auditing
Practices Board. A review consists principally of making
enquiries of group 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 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
Goodwill amortisation has been disclosed separately on
the Group Profit and Loss Account but it has not been
accounted for within Operating Profit in accordance with
Financial Reporting Standard 10. However, the profit
before tax is not affected.
On the basis of our review, with the exception of the
matter described in the preceding paragraph, 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 2000.
Morgan Brown & Spofforth
Chartered Accountants & Registered Auditors
82 St John Street
London EC1M 4JN
Notes to the Interim Accounts
1. Basis of preparation
The financial information for the year ended 30 September
1999 is derived from the statutory accounts filed with
the Registrar of Companies. The auditors' report on the
statutory accounts was unqualified and did not contain a
statement under Section 237 of the Companies Act 1985.
The interim accounts do not comprise statutory accounts
within the meaning of Section 240 of the Companies Act
1985 but have been reviewed by the Auditors, whose report
is included.
2. Taxation
The taxation charge is based on the estimated effective
rate for the year ending 30 September 2000.
3. Earnings per share
Earnings per share have been calculated using Financial
Reporting Standard 14. The calculation of earnings per
share, for the half year is based on profit attributable
to equity shareholders of #1,040,000 (1999 #148,000) and
21,421,556 (1999 19,117,607) shares being the daily
average of the number of shares in issue during the
period. The diluted earnings per share is based on a
weighted average of 21,807,291 (1999 19,584,663) shares
after allowing for the exercise of options.
An adjusted earnings per share value is presented after
adding back the amortisation of goodwill.
4. Exceptional costs
These represent redundancy and other related costs
resulting from the reorganisation and restructuring of
the UK businesses, primarily in Manufacturing, which was
carried out in 1999.
5. Net cash flow from operations
Year ended
30 September
2000 1999 1999
#000 #000 #000
Operating profit 2,008 559 1,832
Release of government grant - (14) (14)
Amortisation of issue costs - - -
Depreciation 377 384 650
Loss/(profit) on disposal of (8) 7 11
fixed assets
Changes in:
Stocks 189 121 (69)
Debtors (1,363) (695) (1,189)
Creditors 1,081 21 637
------- ------- --------
2,284 383 1,858
===== ===== =====
6. Acquisitions
The cash outflow shown of #1,802,000 represents the
acquisition in November 1999 of the whole of the issued
share capital of C & K Components GmbH net of cash
acquired with the business. The consideration comprised:
issue of ordinary shares of #460,000, cash of #1,702,000
excluding expenses of #313,000, a loan note for #459,000
and deferred consideration of #1,263,000. The exact
amount of deferred consideration depends on the pre tax
profits attained during the period from the date of
acquisition until 30 September 2002.
7. Company information
Copies of this statement will be sent to all shareholders
and are will also be available from the Company
Secretary, Deltron Electronics plc, Suffolk House,
Fordham Road, Newmarket, Suffolk, CB8 7AA.
END
IR ILFSTELIAIII
Debts.Co.Uk (LSE:DET)
Historical Stock Chart
From May 2024 to Jun 2024
Debts.Co.Uk (LSE:DET)
Historical Stock Chart
From Jun 2023 to Jun 2024
