RNS Number:4125O
Deltron Electronics PLC
10 December 2001
The issuer advise that the following replaces the final results announcement
released today at 7.00am under RNS number 3988O.
The changes appear in the Group Profit and Loss Account and the notes to the
accounts, note 3 on dividends:
Group Profit and Loss Account changes:
The figure for Operating Profit: Continuing operations under the column
heading 2001 Before Goodwill and exceptional items #000 has changed from 2,975
to 3,475. The figure for Operating Profit: Continuing operations under the
column heading 2001 Goodwill and exceptional items Note 2 #000, has changed
from (296) to (597). The figure for Operating Profit: Continuing operations
under column heading 2001 Total #000 has changed from 2,679 to 2,878.
The figure for Operating profit: Acquisitions under the column heading 2001
Before Goodwill and exceptional items #000, has changed from 1,310 to 810.
The figure for Operating profit: Acquisitions under the column heading 2001
Goodwill and exceptional items Note 2 #000 has changed from (752) to (451) and
the figure for Operating profit: Acquisitions under the column 2001 Total #000
has changed from 558 to 359
The notes to the accounts, note 3 on Dividends change:
The interim cash dividend should read 1.7p per ordinary share was declared
during the year and paid on 17 August 2001 and not 1.0p per ordinary share as
previously stated.
All other details remain unchanged and the full amended text appears below.
FOR IMMEDIATE RELEASE 10 December 2001
DELTRON ELECTRONICS plc
Preliminary Audited Results for the year ending 30 September 2001
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 2001.
Financial Highlights:
* 20% increase in turnover to #64.9m (2000 : #54.3m)
* 10.4% decrease in operating profit (before interest, tax and
amortisation of goodwill) to #4.3m (2000 : #4.8m). Earnings per share 9.1p
(2000 : 13.2p)
* Exceptional item of #529,000 for restructuring charges relating to
acquisitions and interest charge of #761,000 with interest cover of 5.6 times
earnings
* Final dividend of 2.0p taking total for the year up by 5.36% to
3.17p (2000 : 3.0p)
* Order book constant at two and half months
Business Highlights:
* Strong growth in first half, downturn in second six months - current
trading indicates bottom of cycle has been reached
* Downturn which originated in US and telecoms was exaggerated by an
inventory clear out
* Six acquisitions for a total of #13.9m - company now operates in
nine countries - makes Deltron attractive to customers and suppliers
* 10,000 active customers typically receiving designed-in solutions
Paul Gourmand, Chairman of Deltron, commented:
"The upturn when it comes could be as sudden as the downturn. Deltron's robust
business whilst performing well in difficult conditions, will enjoy rapid
improvement in sales, profit and margins when economic growth takes off.
"Earlier this year we set ourselves the objective of doubling the size of
Deltron over two years. Providing there is no further deterioration in the
European economy, the Board still sees this as a realistic objective."
- 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
The trading conditions of the past 12 months have gone from one extreme to the
other. In March 2001, at the end of the first six months of the current
financial year, your Board expected this statement would be dealing with a
second record performance. By the time we reported our interim results in May
we felt it necessary to strike a note of caution.
This was reinforced by two subsequent statements on trading conditions. First,
in July and later at the beginning of October when our full year performance
was clear. The results for the first six months were encouraging but the
second six months have been a disappointment.
In summary, these are:-
#'m 6 mths to 6 mths to 12 mths 12 mths
31 March 30 Sept 2001 2001 2000
2001
Turnover 32.7 32.2 64.9 54.3
Margin 10.6 10.5 21.1 18.5
32.4% 32.6% 32.5% 34.1%
Profit before interest, taxation,
exceptional items
& goodwill amortisation 2.6 1.7 4.3 4.8
This has also been a period of strong operational cash flow as follows
Cash flow from operations
0.4 3.0 3.4 4.3
The Group's performance is inevitably affected by the overall economic
conditions. The downturn which originated in telecomms and other technology
sectors in the US, has progressively pulled back Deltron's performance. Its
impact has spread across Europe. The effect in our industry has been magnified
by a build up of inventory, which many manufacturers saw as essential in a
period of rapid expansion when lead times for deliveries were long. The very
rapid change of attitude in our sector has been exaggerated by an inventory
clear out by customers and in many cases, a reduction in lead times of
suppliers.
Deltron's performance during the past year has been supported by the
underlying strategy of the Group. This strategy is to maintain our specialist
profile in the sale of electromechanical (e-mech) components, and to extend
this specialist profile across Europe to create a full pan-European business.
This strategy has strengthened our relationships with both customers and
suppliers which, in turn, supports our performance at a time when trading
conditions are poor.
We believe that the specialist pan-European profile of the group places
Deltron in a strong position to benefit more rapidly when economic conditions
improve.
The indications from the field suggest that the downward trend of the past
five months may be flattening out. The difficulty with this view is that
despite our useful order book, which remains about 2.5 months, forward
visibility of the longer-term plans of our customers remains unclear.
The Group's strategy led us to the placing of new ordinary shares which raised
#7.7m in December 2000. This has enabled the Group to carry through the very
active acquisition programme of the past 12 months during which we have
strengthened our business in some countries and extended it into other new
ones. Expenditure on acquisitions totalled #13.9m and, in addition, there were
costs of rationalisation and integration.
At the time of the placing, we stated the intention of doubling the size of
the Group. With the acquisition of Hawnt Electronics Ltd in the UK and the
Camax Group in Italy (both in July), we have made useful progress with this
intention. The other transactions in Denmark, France, Austria and the
Netherlands were smaller but strategically important. The financial year to
September does not reflect a fair contribution from these new businesses given
the short periods and the reorganisation required.
Deltron now operates in 9 countries in Western Europe and represents an
increasingly attractive business partner to both customers and suppliers. This
has been reflected in a number of new pan-European franchise agreements during
the year but is also allowing us to make some economies in overheads and
eliminate duplication.
In summary, we believe that the events of the past 12 months have created a
stronger group, with improved operational gearing, that is well positioned to
benefit when economic conditions bounce back. We have 10,000 active customers,
none of whom represents more than 4% of turnover and our components are
typically designed in to our customer's products; all of which support our
confident but cautious view of the future.
People
As noted above, our business strategy is to develop our specialist e-mech
business across Europe. Part of this strategy is based on the concept of
components being 'designed-in' to our customer's products. People are critical
to this method of operating. Our customers expect support from our staff and
we believe they receive it in a way that is not readily available elsewhere in
Europe. This means giving authority to local national staff to deal with their
customers, but with the benefit of Deltron's pan-European reach and
International connections. This makes a strong combination for the long term
development of the Group.
Dividend
The Board recommends a final dividend of 2.0p, the same as last year, to be
paid on 1 March 2002 to shareholders on the register on 25 January 2002. This
will increase the total for the year by 5.7% to 3.17p (2000 : 3.0p). The
recommendation reflects our strong cash generation and the Board's view that
the Group is expected to expand sales and profit rapidly when the economic
climate turns.
Prospects
The upturn when it comes could be as sudden as the downturn. Inventory
overhangs of customers are being cleared. Deltron's robust business whilst
performing well in difficult conditions, will enjoy rapid improvement in
sales, profit and margins when economic growth takes off.
Earlier this year we set ourselves the objective of doubling the size of
Deltron over two years. Providing there is no further deterioration in the
European economy, the Board still sees this as a realistic objective. We now
have a pan-European business with the resources to capitalise on expanding
markets. The whole Group is determined to double in size over a very short
period, while delivering maximum shareholder value.
P R Gourmand
Chairman
7 December 2001
Group Profit and Loss Account
for the year ended 30 September 2001
2001 2001 2000 2000
Before Goodwill Before Goodwill
Goodwill and Goodwill and
and exceptional and exceptional
exceptional items 2001 exceptional items 2000
items Note 2 Total items Note 2 Total
#000 #000 #000 #000 #000 #000
Sales:
Continuing 57,803 - 57,803 54,279 - 54,279
operations
Acquisitions 7,130 - 7,130 - - -
64,933 - 64,933 54,279 - 54,279
Gross profit:
Continuing 18,805 - 18,805 18,503 - 18,503
operations
Acquisitions 2,293 - 2,293 - - -
21,098 - 21,098 18,503 - 18,503
Operating
Expenses:
Selling & (6,080) - (6,080) (4,802) - (4,802)
distribution
Administration (10,733) (1,048) (11,781) (8,919) (242) (9,161)
(16,813) (1,048) (17,861) (13,721) (242) (13,963)
Operating
profit:
Continuing 3,475 (597) 2,878 4,782 (242) 4,540
operations
Acquisitions 810 (451) 359 - - -
4,285 (1,048) 3,237 4,782 (242) 4,540
Interest (814) - (814) (711) - (711)
payable
Interest 53 - 53 22 - 22
receivable
Net finance (761) - (761) (689) - (689)
costs
Profit before 3,524 (1,048) 2,476 4,093 (242) 3,851
taxation
Taxation (1,086) 163 (923) (1,227) - (1,227)
Profit after 2,438 (885) 1,553 2,866 (242) 2,624
taxation
Dividends (896) (673)
Profit 657 1,951
retained for
the year
Earnings per 5.8p 12.0p
share - basic
Earnings per 5.8p 11.9p
share -
diluted
Adjusted
Earnings
per share - 9.1p 13.2p
basic
Adjusted
Earnings
per share - 9.1p 13.0p
diluted
There is no difference between profit before taxation and profit for the
financial year on a historical cost basis and that disclosed in the accounts.
Group Statement of Total Recognised Gains and Losses
for the year ended 30 September 2001
2001 2000
#000 #000
Profit for the period 1,553 2,624
Exchange adjustments 103 (372)
Total gains and losses recognised during the year 1,656 2,252
Group Balance Sheet
as at 30 September 2001
2001 2000
#000 #000
Fixed assets
Tangible assets 5,480 5,296
Intangible assets 16,207 5,525
21,687 10,821
Current assets
Stocks 10,750 7,688
Debtors 17,340 13,620
Cash 5,617 2,729
33,707 24,037
Creditors: amounts falling due within one year (21,578) (21,358)
Net current assets 12,129 2,679
Total assets less current liabilities 33,816 13,500
Creditors: amounts falling due after more than one year (18,228) (6,302)
Deferred income (188) (221)
Net assets 15,400 6,977
Capital and reserves
Called up share capital 1,407 1,108
Reserves 13,993 5,869
Equity shareholders' funds 15,400 6,977
The accounts were approved by the Board of Directors on 7 December 2001 and
were signed on its behalf by:
C J Sawyer
R E Tozer
Directors
Group Cash Flow Statement
For the year ended 30 September 2001
2001 2000
#000 #000
Cash flow from operating activities 3,346 4,300
Returns on investment and servicing of finance
Interest received 53 31
Interest paid (626) (812)
Interest element of finance lease rental payments (53) (35)
(626) (816)
Taxation (1,353) (735)
Capital expenditure
Purchase of tangible fixed assets (691) (750)
Sale of tangible fixed assets 294 62
(397) (688)
Acquisitions net of cash acquired (13,937) (3,500)
Equity dividend paid (777) (439)
Cash outflow before financing (13,744) (1,878)
Financing (inclusive of #7.7m (2000: #1.3m) from issue of 18,254 2,503
shares)
Change in cash 4,510 625
Reconciliation of cash flow to movement in net debt
Net debt at 1 October (8,585) (7,154)
Change in cash 4,510 625
Cash from change in debt and lease financing (10,592) (1,882)
Change in net debt resulting from cash flows (6,082) (1,257)
Acquired with acquired businesses - -
Inception of finance leases (483) (158)
Amortisation of issue costs (17) (10)
Exchange differences 4 (6)
Movement in net debt (6,578) (1,431)
Net debt at 30 September (15,163) (8,585)
Notes to the Accounts
1. Basis of Preparation
The financial information for the years ended 30 September 2000 and 2001 is
derived from the statutory accounts for those years. The statutory accounts
for the year ended 30 September 2000 have been filed with the Registrar of
Companies. The statutory accounts for the year ended 30 September 2001 will
be delivered to the Registrar of Companies following the Company's Annual
General Meeting proposed to be held in February 2002.
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 2001 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 #1,553,000 (2000 : #2,624,000) and 26,863,004 (2000 :
21,791,437) 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 26,863,004 (2000 : 22,086,168) shares after allowing for exercise
of options. The changes in share price has meant that there is no dilution.
An adjusted earnings per share value is shown after adding back the
amortisation of goodwill and the exceptional item, net of taxation.
3. Dividends
An interim cash dividend of 1.7p per ordinary share was declared during the
year and paid on 17 August 2001. The directors recommend payment of a final
dividend of 2.0p per ordinary share, to be paid on 1 March 2002 to
shareholders on the register on 25 January 2002. This will bring the total
dividend for the year to 3.17p per ordinary share.
4. Net cash inflow from operations
2001 2000
#000 #000
Operating profit 3,237 4,540
Release of government grant (33) (89)
Amortisation of issue costs 17 10
Amortisation of goodwill 519 242
Depreciation 1,075 851
Profit/(loss) on disposal of fixed assets (5) 3
Changes in
Stocks (41) (1,634)
Debtors 1,925 (3,518)
Creditors (3,348) 3,895
3,346 4,300
5. Acquisitions
During the year ended 30th September 2001, the Group made 6 acquisitions.
These are listed below:-
Name Location Acquiring Company Company or Date
Asset Purchase
Sensortech Denmark Deltron Conelec A/S Asset January
C & K Austria GmbH Austria Deltron Electronics plc Company January
Discomp Group France Deltron EUROiNDustrie SA Company March
Radikor Holland Deltron Electronics plc Asset May
Hawnt Electronics Ltd UK Deltron Electronics plc Company June
Camax Group Italy Deltron Electronics plc Company July
All of these transactions have been accounted for as acquisitions.
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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