RNS Number:5164U
Deltron Electronics PLC
22 November 2000
For Immediate Release 22nd November 2000
Deltron Electronics Plc
Preliminary Audited Results for the year ending 30 September 2000
Deltron Electronics Plc ("Deltron"), the specialist Pan-European distributor
of electromechanical components and solutions, announces its Preliminary
Audited Results for the year ending 30 September 2000.
Key Points:
* 42.3% increase in turnover to #54.3m (1999: #38.1m)
* 225% increase in profits (before tax and amortisation of goodwill) to
#4.1m (1999: #1.26m)
* 230% increase in earnings per share (before goodwill amortisation)
to 13.2p per share (1999: 4.0p)
* 53% growth in order intake to #60.4m
* Contributory factors to Deltron's growth include:
* Development of Pan-European focus - now active in 75% of the European
Union and the 4th largest distributor of electromechanical components
* Design-in relationships with customers allows Deltron to remain close to
clients and anticipate demand over the longer-term
* Five Pan-European agreements in 12 months, where Deltron is responsible
for the development in the appropriate European markets and also manages their
product distribution
* 'Bolt-on' acquisitions have improved capability of existing businesses
* Manufacturing activities making steady progress with improved
productivity and cost-controls
Paul Gourmand, Chairman of Deltron, commented:
"A year ago, I predicted that 2000 would take Deltron to significant new
heights and I am delighted to report that the Company has indeed enjoyed a
record year's trading. We have made excellent progress across all our
business divisions and we are extremely pleased with our development. We now
possess the infrastructure that will enable us to manage our ever expanding
Pan-European portfolio and explore new opportunities for innovation and
investment.
I remain confident that our progress will continue and that our business will
go from strength to strength. I look forward to another successful year."
- ENDS -
For further information, please contact:
Deltron Electronics plc Tel: 01638 561156
Christopher Sawyer, Edward Tozer
Buchanan Communications Tel: 020 7466 5000
Tim Anderson/Bobbie Swanson
CHAIRMAN'S STATEMENT
I am very pleased to be able to report that Deltron has enjoyed a record
year's trading:
* Turnover up 42.3% to #54.3m.
* Profits before tax and amortisation of goodwill up 225% to #4.1m.
* Earnings per share (before goodwill amortisation) up 230% to 13.2p per
share.
Order intake grew to #60.4m up 53% leading to a strong order book at the year
end.
Deltron entered a phase of major expansion across its product range
approximately a year ago. I am delighted to report that this trend is
continuing and the strength of our order book points to an improving position
leaving us enthusiastic about Group prospects.
We consider our markets are experiencing a period of growth due to increasing
use of our electromechanical products in applications such as the
infrastructure for telecommunications (base stations) and internet
developments. Against this background, Deltron has developed its business to
maximise potential from these exciting growth markets. The main factors
contributing to this development are:
1. We are steadily becoming more pan-European. Over the last year we
acquired or established companies in Germany, France and Ireland. We are now
active in 75% of the applicable European markets making Deltron the 4th
largest distributor of electromechanical components in the EU.
2. We have design-in relationships with customers where Deltron is
included in the product design, a process that keeps us close to customers and
one which enables the Group to see demand over a longer term horizon. The
acquisition of C & K Components Vertriebsgesellschaft fur Elektronische
Bauelemente mbH (now Deltron Components GmbH) in Germany increased this
strength whilst further significantly improving our geographic reach.
3. Five pan-European agreements over the last 12 months have been won
where Deltron has become responsible for the development of the market for the
companies concerned throughout Europe and manages pan-European
product distribution for these companies. This is considered to be welcome by
manufacturers who, we believe, prefer to have a European interface reporting a
consolidated picture of figures in a single language, and customers which also
expect a focused, informed service.
4. 'Bolt-on' acquisitions which improve the capability of our existing
businesses. One good example is RAB SA in France which joined the Group in
April 2000. This extends to the planned acquisition of the Danish sensor
business of Sensortech A/S, scheduled for completion in December 2000 which
is addressed in the Prospectus being sent to shareholders at the time of this
preliminary announcement of the results for 2000.
5. Our manufacturing activities have continued to make steady
progress. Very considerable effort has gone into improving productivity and
controlling costs which have produced a very useful result.
In view of the increasingly close-knit structure of the Group it is invidious
to select particular operating units for mention but the performance of
Deltron Conelec A/S has been of special note, even in a year of good overall
results. I am delighted to record that as a result Niels K Nielsen, the
Managing Director, is due to receive the full amount of his agreed earn out
payment in February 2001.
Following the year end we are announcing plans for a fund-raising exercise by
way of a placing to raise some #7.5m (after expenses) for the Group, so as to
maintain our development and acquisition strategy. We have also announced
plans, subject to shareholders' approval, to acquire a distribution company in
Austria, and the specialist sensor business in Denmark mentioned above.
Information Technology
The results described for the year are struck after a significant investment
in information technology which will continue. We now have a specialist
internal group which has already made a big difference to Deltron's ability to
operate as one pan-European group. The total IT expense during the year will
have been in excess of #600k which has been fully expensed, and represents a
vital part of our plans for the future.
Financial Condition
The financial condition of the Group has strengthened during the past year.
Even after the acquisitions in Germany and France, interest cover was 6.6
times for the year. Net debt at the end of the year end was #8.6m (1999: #
7.2m), with a gearing ratio of 123% (1999: 175%). Cash flow from operating
activities during the year was a positive #4.3 m (1999: #1.9m).
The Board is proposing to recommend a final dividend for the year of 2.0p per
share to be paid on 28th February 2001 to shareholders on the register on 8th
December 2000. This will bring the total for the year to 3.0p (1999: 1.5p).
This is covered 3.9 times by earnings.
Since the year end we have announced plans for the fundraising noted above. I
will report on the results of this and the associated acquisitions in more
detail at the Annual General Meeting in January 2001.
Employees
Last year I mentioned the significance of the new management appointments in
Sweden, UK and France. These appointments have clearly had a useful impact on
the Group's performance, although there remains much still to be achieved.
However, these people would not have been able to make the progress which has
been achieved without the strong support of staff at all levels throughout the
Group. The Board is most grateful for their application and endeavours in a
very hectic period.
Prospects
It is gratifying to record that the prospects we looked forward to last year
have been fulfilled. The results for the year, in line with expectations
after two upgrades in forecast, nonetheless, represent only one further step
in the Group's development. With the current strong order books and helpful
trading climate we expect to make further progress in the next twelve months.
P.R. Gourmand
CHAIRMAN
22nd November 2000
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEARS ENDED 30 SEPTEMBER
2000 1999
Notes #'000 #'000
Turnover
Continuing operations 43,065 38,146
Acquisitions 11,214 -
54,279 38,146
Cost of sales (35,776) (24,550)
Gross profit
Continuing operations 15,076 13,596
Acquisitions 3,427 -
18,503 13,596
Selling and distribution costs (4,802) (4,443)
Administrative costs (8,919) (7,116)
Exceptional costs - (205)
Operating profit
Continuing operations 3,712 1,832
Acquisitions 1,070 -
4,782 1,832
Interest payable (711) (596)
Interest receivable 22 22
Profit on ordinary activities before tax and goodwill 4,093 1,258
amortisation
Goodwill amortisation (242) (20)
Profit before tax 3,851 1,238
Taxation (1,227) (474)
Profit on ordinary activities after tax 2,624 764
Dividends 3 (673) (311)
Profit retained for the financial year 1,951 453
Earnings per share - basic 2 12.0p 3.9p
Earnings per share - diluted 2 11.9p 3.8p
Earnings per share - basic before goodwill 2 13.2p 4.0p
amortisation
Earnings per share - diluted before goodwill 2 13.0p 3.9p
amortisation
GROUP BALANCE SHEET
AS AT 30 SEPTEMBER
2000 1999
#'000 #'000
Fixed assets 5,296 5,120
Tangible assets 5,525 1,018
Intangible assets 10,821 6,138
Current assets
Stocks 7,688 5,412
Debtors 13,620 9,782
Cash 2,729 1,727
24,037 16,921
Creditors: amounts falling due within one year (21,358) (14,503)
Net current assets 2,679 2,418
Total assets less current liabilities 13,500 8,556
Creditors: amounts falling after more than one year (6,302) (4,165)
Deferred income (221) (310)
Net assets 6,977 4,081
Capital and reserves
Called up share capital 1,108 1,102
Reserves 5,869 3,069
Equity shareholders' funds 6,977 4,081
GROUP CASH FLOW STATEMENT
FOR THE YEARS ENDED 30 SEPTEMBER
2000 1999
Notes #'000 #'000
Cash flow from operating activities 4 4,300 1,858
Returns on investment and servicing of finance
Interest received 31 22
Interest paid (812) (522)
Interest element of finance lease rental payments (35) (41)
(816) (541)
Taxation (735) (1,160)
Capital expenditure
Purchase of tangible fixed assets (750) (634)
Sale of tangible fixed assets 62 113
(688) (521)
Acquisitions net of cash acquired (3,500) (1,956)
Equity dividend paid (439) (551)
Cash (outflow) before financing (1,878) (2,871)
Financing 2,503 (818)
Increase/(decrease) in cash 625 (3,689)
Reconciliation of cash flow to movement in net debt
Net debt at 1 October (7,154) (4,141)
Change in cash 625 (3,689)
Cash inflow from increase in debt and lease financing (1,882) 805
Change in net debt resulting from cash flows (1,257) (2,884)
Acquired with acquired businesses - (61)
Inception of finance leases (158) (168)
Amortisation of issue costs (10) (30)
Exchange differences (6) 130
Movement in net debt (1,431) (3,013)
Net debt at 30 September (8,585) (7,154)
NOTES TO PRELIMINARY ANNOUNCEMENT
1. BASIS OF PREPARATION
The financial information for the years ended 30 September 1999 and 2000 is
derived from the statutory accounts for those years. The statutory accounts
for the year ended 30 September 1999 have been filed with the Registrar of
Companies. The statutory accounts for the year ended 30 September 2000 will
be delivered to the Registrar of Companies following the Company's Annual
General Meeting proposed to be held in January 2001.
The auditors reports on the statutory accounts for both years was unqualified
and did not contact a statement under Section 237 of the Companies Act 1985.
The preliminary announcement does not constitute statutory accounts within the
meaning of Section 240 of the Companies Act 1985.
2. EARNINGS PER SHARE
Earnings per share for the year ended 30 September 2000 have been calculated
in accordance with Financial Reporting Standard 14 and comparative figures
have been restated accordingly. The calculation of earnings per share is
based on profit attributable to equity shareholders of #2,624000 (1999-#
764,000) and 21,791,437 (1999-19,577,389) 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 22,086,168 (1999-19,960,303) shares
after allowing for exercise of options.
An adjusted earnings per share value is shown after adding back the goodwill
amortisation.
3. DIVIDENDS
An interim cash dividend of 1.0p per ordinary share was declared during the
year and paid on 18 August 2000. The directors recommend payment of a final
dividend of 2.0p per ordinary share, to be paid on 28 February 2001 to
shareholders on the register on 8 December 2000. This will bring the total
dividend for the year to 3.0p per ordinary share. The new ordinary shares to
be issued pursuant to the placing and open offer announced today will not rank
for the recommended final dividend.
4. NET CASH FROM OPERATIONS
2000 1999
#'000 #'000
Operating profit after goodwill amortisation 4,540 1,812
Release of government grant (89) (14)
Amortisation of issue costs 10 30
Amortisation of goodwill 242 20
Depreciation 851 670
(Profit)/loss on disposal of fixed assets 3 11
Changes in
Stocks (1,634) (69)
Debtors (3,518) (1,189)
Creditors 3,895 587
4,300 1,858
5. ACQUISITIONS
On 11 November 1999 Deltron acquired a German distribution business C & K
Components Vertriebsgesellschaft fur Elektronische Bauelemente mbH (a
privately held company), now Deltron Components GmbH, from its owner. On 2
April 2000 Deltron, via its French subsidiary Deltron EUROiNDustrie SA,
acquired the assets of RAB SA, a French distribution business based in Paris.
Both of these transactions have been accounted for as acquisitions. In
addition, during the year some additional fair value adjustments have been
made in respect of the acquisition of the Cirkit Distribution Business which
was made during the year ended 30 September 1999.
6 COMPANY INFORMATION
Copies of this statement are being sent to all shareholders and are also
available from the Company Secretary, Deltron Electronics plc, Suffolk House,
Fordham Road, Newmarket, Suffolk, CB8 7AA.
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