RNS Number:4073X
Deltron Electronics PLC
18 June 2002
The Issuer advises that the following replaces the Interim Results announcement
released 18 June 2002 at 07:00 under RNS number 3744X.
This dividend will be paid on 16th August 2002 to shareholders on the register
on 10th July 2002. This was not previously stated.
All other details remain unchanged, and the full amended text appears below.
For Immediate Release 18th June 2002
DELTRON ELECTRONICS plc
Unaudited Interim Results for the six months ending 31st March 2002
Deltron Electronics plc ("Deltron"), the specialist Pan-European distributor of
electromechanical components and solutions, announces its Unaudited Interim
Results for the six months ending 31st March 2002.
Financial Highlights:
• Turnover maintained at £32.6m (2001 : £32.7m) - Increased share of
depressed market
• Gross margins remain strong at 32.6%
• Profit before tax, goodwill amortisation and exceptionals - £0.5m
(2001 : £2.3m )
Loss after tax, goodwill amortisation and exceptionals -£0.985m (2001 : £1.3m
profit )
• £800,000 integration costs following six acquisitions in 2001 -
Expected to generate £1.5m benefit in next financial year
• Loss per share (basic) 3.5p (2001 : 5.0p earnings)
Adjusted Earnings per share (basic) 0.8p (2001 : 5.8p)
• Operating Cash flow robust at £1.9m (2001 : £0.4m)
• Interim dividend of 0.585p (2001 : 1.17p) - Reflecting long-term
prospects
Business Highlights:
• European market reach increased by 25% and design-in capability makes
Deltron attractive as lead pan-European distributor for major manufacturers. Six
agreements in place, four under discussion.
• Strong operational gearing means sales increases turn into a
disproportionate increase in profit
• Meeting revised market expectations in tough industry conditions
Paul Gourmand, Chairman of Deltron, commented:
"Deltron is strong geographically, by product and by supplier. It is currently
incurring the costs of expansion without the benefit of volume. It is generally
acknowledged the recovery will come, but its timing remains uncertain and the
Board is running the business accordingly. What is certain is that when it
comes, Deltron has never been in better shape to enjoy the upturn."
- 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 - Deltron Electronics
Results for the six months to 31st March 2002
It has been a tough six months with the electronics industry's activity having
fallen circa 30%. In the six month period to March 2002, Deltron achieved
turnover of £32.6m (2001: £32.7m) and pre-tax profits (before exceptional items
and goodwill amortisation) of £0.5m (2001: £2.3m). These results are in line
with revised market expectations and represent the benefit of acquisitions made
during the last financial year. Without these acquisitions, turnover was 21.7%
lower, demonstrating that Deltron has improved its market share compared with
the industry decline of 30%.
Having made six acquisitions during 2001 we continue to integrate these
businesses and take out duplication and cost. In addition, we are integrating
our two UK manufacturing operations into one. Integration costs totalled
£800,000 net of tax during our first half. This substantial charge reflects an
aggressive approach to overhead control. In 2001, excluding acquisitions, group
overheads on an annualised basis were £15.6m. Immediately post the six
acquisitions in 2001 they had risen to £21.2m. Already they are down to £19.2m
and our target is to reach £18.2m by 2003. Next year we estimate the overall
effect of the restructuring in the present trading climate will produce a
benefit of £1.5m without requiring any recovery in turnover.
Group gross margins remain robust at 32.6% compared to 32.5% a year ago.
Deltron's electro-mechanical expertise, provided across Europe, delivers a
value-added service which is the key to this success. What we lack is volume
which is a common complaint across the electronic components distribution sector
at this time. Manufacturers are simply delaying expenditure on new product
development.
Deltron's market
Industry experts believe that the broad electronic components market has already
started its recovery. Most analysis centres on the semiconductor market and,
although the Group doesn't distribute semiconductors, this is normally a good
proxy for our markets.
As I said at our AGM at the end of February, if we were to meet stock market
expectations, a strong recovery from April was needed. When it was apparent the
upturn had not started we revised down our expectations. In the current
climate, we are managing the business to maximise our performance in these
continuing difficult conditions across Europe, whilst ensuring we are in the
best possible position to fulfil our potential when markets turn.
Deltron's position in the market
Deltron operates in nine countries up from just six in 2001. We have more
products than ever before as we win new franchises and introduce both new and
existing brands across our European network.
Our European market reach increased 25% by our 2001 acquisitions and continues
to attract suppliers wanting to appoint us as their lead specialist distributor
for Europe. We have six such agreements and are currently talking to four more
suppliers which potentially want Deltron to become their lead specialist
distributor for Europe. They are attracted by Deltron's design-in/demand
creation and customer support capabilities which also keep us apart from
commodity pricing pressures.
As sales rise the Group's structure will ensure strong operational gearing which
should turn an increase in sales into a disproportionate increase in profit. In
the meanwhile our sales teams and customer support managers are aggressively
obtaining as much of the depressed demand as possible.
Financial results
In the six months to 31st March, turnover achieved in businesses which were part
of the Group before the acquisitions in 2001, fell by 21.7% to £24.5m. However,
this was compensated by the contribution from acquired companies resulting in
flat turnover at £32.6m for the period ended 31st March 2002 (2001: £32.7m).
Gross margins remain strong at 32.6%. The increase in overheads and exceptional
items however depresses our bottom line, exactly as anticipated in our statement
in April. Profit before tax, goodwill amortisation and exceptionals was £0.5m.
After exceptionals, amortisation of goodwill and before tax, we incurred a loss
of £0.866m. Operating cash flow was robust at £1.9m (£0.4m) reflecting close
control on working capital. Notwithstanding the reported loss, the Board have
approved a dividend of 0.585p (2001: 1.17p). It will be paid on 16th August
2002 to shareholders on the register at 10th July 2002.
Prospects
Deltron is strong geographically, by product and by supplier. It is currently
incurring the costs of expansion without the benefit of volume. It is generally
acknowledged the recovery will come, but its timing remains uncertain and the
Board is running the business accordingly. What is certain is that when it
comes, Deltron has never been in better shape to enjoy the upturn.
P R Gourmand
Chairman
18th June 2002
GROUP PROFIT AND LOSS ACCOUNT (unaudited)
Sterling
For 6 months ended 31 March
2002 2002 2002 2001 2001 2001 Year
before Goodwill Total before Goodwill Total ended
Goodwill and and Goodwill and and 30 Sept
exceptional exceptional exceptional exceptional 2001
items items items items
Note £000 £000 £000 £000 £000 £000 £000
Turnover 32,622 - 32,622 32,708 - 32,708 64,933
Cost of sales (21,974) - (21,974) (22,082) - (22,082) (43,835)
Gross profit 10,648 - 10,648 10,626 - 10,626 21,098
Selling and (4,245) - (4,245) (2,805) - (2,805) (6,080)
distribution
costs
Administrative 2 (5,337) (1,326) (6,663) (5,209) (198) (5,407) (11,781)
costs
Operating 1,066 (1,326) (260) 2,612 (198) 2,414 3,237
(loss)/profit
Interest (625) - (625) (361) - (361) (814)
payable
Interest 19 - 19 35 - 35 53
receivable
(Loss)/profit
on ordinary 460 (1,326) (866) 2,286 (198) 2,088 2,476
activities
before tax
Taxation 4 (237) 118 (119) (814) - (814) (1,186)
(Loss)/profit
on ordinary 223 (1,208) (985) 1,472 (198) 1,274 1,290
activities after
tax
Dividends (165) - (165) (341) - (341) (896)
(Loss)/profit
retained for 58 (1,208) (1,150) 1,131 (198) 933 394
the financial
period
(Loss)/earnings 5 -3.5p 5.0p 4.8p
per share -
basic
(Loss)/earning 5 -3.5p 4.9p 4.8p
per share -
diluted
Adjusted 5 0.8p 5.8p 8.1p
earnings per
share - basic
Adjusted 5 0.8p 5.7p 8.1p
earnings per
share - diluted
Dividend per 0.585p 1.17p 3.17p
share
As a result of implementing Financial Reporting Standard 19, all comparative
figures have been restated (see note 3)
All activities derive from continuing operations
GROUP PROFIT AND LOSS ACCOUNT (unaudited)
Euro
For 6 months ended 31 March
2002 2002 2002 2001 2001 2001 Year
before Goodwill Total before Goodwill Total ended
Goodwill and and Goodwill and and 30 Sept
exceptional exceptional exceptional exceptional 2001
items items items items
Note EUR000 EUR000 EUR000 EUR000 EUR000 EUR000 EUR000
Turnover 53,174 - 53,174 52,758 - 52,758 105,582
Cost of sales (35,818) - (35,818) (35,618) - (35,618) (71,277)
Gross profit 17,356 - 17,356 17,140 - 17,140 34,305
Selling and (6,919) - (6,919) (4,525) - (4,525) (9,886)
distribution costs
Administrative 2 (8,699) (2,161) (10,860) (8,402) (319) (8,721) (19,156)
costs
Operating 1,738 (2,161) (423) 4,213 (319) 3,894 5,263
(loss)/profit
Interest payable (1,019) - (1,019) (582) - (582) (1,323)
Interest receivable 31 - 31 56 - 56 86
(Loss)/profit on
ordinary activities 750 (2,161) (1,411) 3,687 (319) 3,368 4,026
before tax
Taxation 4 (386) 192 (194) (1,313) - (1,313) (1,929)
(Loss)/profit on
ordinary activities 364 (1,969) (1,605) 2,374 (319) 2,055 2,097
after tax
Dividends (269) - (269) (550) - (550) (1,457)
(Loss)/profit
retained for the 95 (1,969) (1,874) 1,824 (319) 1,505 640
financial period
(Loss)/earnings per 5 -5.7c 8.1c 7.8c
share - basic
(Loss)/earning per 5 -5.7c 7.9c 7.8c
share - diluted
Adjusted earnings 5 1.3c 9.4c 13.2c
per share - basic
Adjusted earnings 5 1.3c 9.2c 13.2c
per share - diluted
Dividend per share 1.0c 1.9c 5.2c
As a result of implementing Financial Reporting Standard 19, all comparative
figures have been restated (see note 3)
All activities derive from continuing operations
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES (unaudited)
For 6 months ended 31 March
2002 2001 Year 2002 2001 Year
ended ended
30 Sept 30 Sept
2001 2001
£000 £000 £000 EUR000 EUR000 EUR000
(Loss)/Profit for the period as restated (985) 1,274 1,290 (1,605) 2,055 2,097
(see note 3)
Exchange differences 269 75 103 438 121 167
Total Gains and Losses recognised during (716) 1,349 1,393 (1,167) 2,176 2,264
period
As a result of implementing Financial Reporting Standard 19, all comparative
figures have been restated (see note 3)
MOVEMENT IN SHAREHOLDERS' FUNDS (unaudited)
For 6 months ended 31 March
2002 2001 Year
ended
30 Sept
2001
£000 £000 £000
Opening shareholders' funds 15,137 6,977 6,977
(Loss)/Profit for the period as restated (985) 1,274 1,290
(see note 3)
Dividends (165) (341) (896)
Share capital issued - 7,658 7,663
Exchange differences 269 75 103
Increase/(decrease) in shareholders' funds (881) 8,666 8,160
for the period
Closing shareholders' funds 14,256 15,643 15,137
As a result of implementing Financial Reporting Standard 19, all comparative
figures have been restated (see note 3)
GROUP BALANCE SHEET (unaudited)
As at 31 March
2002 2001 As at 2002 2001 As at
Total Total 30 Sept Total Total 30 Sept
2001 2001
£000 £000 £000 EUR000 EUR000 EUR000
Fixed Assets:
Tangible assets 5,185 5,421 5,480 8,463 8,728 8,884
Intangible assets 16,057 9,930 16,207 26,210 15,987 26,155
21,242 15,351 21,687 34,673 24,715 34,999
Current Assets:
Stocks 9,422 9,145 10,750 15,830 14,723 17,348
Debtors 15,941 16,428 17,340 26,020 26,449 27,983
Cash at bank and in hand 2,419 3,586 5,617 3,949 5,773 9,065
27,782 29,159 33,707 45,349 46,945 54,396
Creditors:
Amounts falling due within one year (17,714) (19,017) (21,609) (28,915) (30,617) (34,873)
Net Current Assets 10,068 10,142 12,098 16,434 16,328 19,523
Total assets less current liabilities 31,310 25,493 33,785 51,107 41,043 54,522
Creditors:
Amounts falling due after more than one year (17,054) (9,850) (18,648) (27,837) (15,859) (30,097)
14,256 15,643 15,137 23,270 25,184 24,425
Capital and Reserves:
Called up share capital 1,407 1,407 1,407 2,297 2,265 2,271
Reserves 12,849 14,236 13,730 20,973 22,919 22,154
Equity Shareholders' funds 14,256 15,643 15,137 23,270 25,184 24,425
As a result of implementing Financial Reporting Standard 19, all comparative
figures have been restated (see note 3)
GROUP CASH FLOW STATEMENT (unaudited)
For 6 months ended 31 March
2002 2001 Year 2002 2001 Year
Total Total ended Total Total ended
30 Sept 30 Sept
2001 2001
Note £000 £000 £000 EUR000 EUR000 EUR000
Cash flow from operating 6 1,918 434 3,346 3,126 700 5,450
activities
Returns on investment and servicing of (584) (317) (626) (952) (511) (1,018)
finance
Taxation (1,071) (919) (1,353) (1,746) (1,482) (2,200)
Capital expenditure (436) (285) (397) (711) (460) (646)
Acquisitions 7 (465) (4,057) (13,937) (758) (6,544) (22,661)
Equity dividend paid (562) (447) (777) (916) (721) (1,263)
Cash flow before financing (1,200) (5,591) (13,744) (1,957) (9,018) (22,338)
Financing (1,634) 8,380 18,254 (2,663) 13,517 29,681
Change in Cash: (2,834) 2,789 4,510 (4,620) 4,499 7,343
NOTE TO THE GROUP CASH FLOW STATEMENT (unaudited)
Reconciliation of cash flow to movement
in net debt:
Opening net debt (15,163) (8,585) (8,585) (24,475) (14,423) (14,423)
Change in Cash: (2,834) 2,789 4,510 (4,620) 4,499 7,343
Cash flow from change in debt 1,634 (722) (10,592) 2,663 (1,165) (17,164)
Change in net debt (1,200) 2,067 (6,082) (1,957) 3,334 (9,821)
Acquired with subsidiary - (3) - - (5) (5)
Inception of finance leases (47) (252) (483) (77) (406) (785)
Amortisation of issue costs (16) (6) (17) (26) (10) (28)
Exchange differences 91 101 4 (129) 758 587
Movement in net debt: (1,172) 1,907 (6,578) (2,189) 3,671 (10,052)
Closing net debt: (16,335) (6,678) (15,163) (26,664) (10,752) (24,475)
INDEPENDENT REVIEW REPORT TO DELTRON ELECTRONICS plc
Introduction
We have been instructed by the company to review the financial information
presented in sterling for the six months ended 31 March 2002, which comprises
the profit and loss account, the total recognised gains and losses, the balance
sheets, the cash flow statement and related notes 1 to 8 together with the
movement in shareholders' funds. 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 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.
Review work performed
We conducted our review in accordance with the 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 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 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, expressed in sterling, as presented
for the six months ended 31 March 2002.
In our opinion, the financial information expressed in euros, has been properly
translated on the bases described in note 1.
Deloitte & Touche
Chartered Accountants
Leda House
Station Road
Cambridge CB1 2RN
17th June 2002
Notes to the interim accounts
1. Basis of preparation
The financial information for the year ended 30 September 2001 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 on page 9.
The translation of the financial information into euros is included solely for
convenience and they are stated, as a matter of arithmetical computation only,
on the following bases as applied to the sterling primary statements:
* the balance sheet is translated at the closing rate of exchange at the period
end.
* the profit and loss account, the statement of total recognised gains and
losses and the cash flow statement are translated at the average rate of
exchange during the period.
The translation should not be construed as meaning that the sterling amounts
actually represent, or have been or could be converted into, euros.
2. Goodwill and exceptional items
Included within administration costs is a charge of £432,000 in respect of the
amortisation of goodwill for the period. The comparative values were £198,000
for the interim and £519,000 in the full year.
The exceptional items relate to redundancy and relocation costs. These
predominantly are for the closure and relocation of elements of the activity
Deltron Hawnt Ltd and the provision for the same of Deltron EMCON Ltd, which
will happen during the second half.
3. Deferred tax
In accordance with the UK Listing Authority (Listing Rules 12.47) the company
has produced this interim report using the accounting policies adopted in the
last full annual report. It should be noted however that Financial Reporting
Standard 19 is effective for this interim period and represents a change in the
accounting policy for deferred tax.
Deferred tax is provided in full on timing differences which result in an
obligation at the balance sheet date to pay more tax, or a right to pay less
tax, at a future date, at rates expected to apply when they crystallise based on
current tax rates and law. Timing differences arise from the inclusion of items
of income and expenditure in taxation computations in periods different from
those in which they are included in financial statements. Deferred tax is not
provided on timing differences arising from the revaluation of fixed assets
where there is no commitment to sell the asset, or on unremitted earnings of
subsidiaries and associates where there is no commitment to remit these
earnings. Deferred tax assets are recognised to the extent that that it is
regarded more likely than not that they will be recovered. Deferred tax assets
and liabilities are not discounted.
The effect on the current year profits resulting from the implementation of FRS
19 is to create an additional credit of £48,000. The prior year comparatives
have been restated for the impact of FRS 19 in accordance with FRS 3. The
effect on the interim prior period profit and loss account was to charge an
amount of £132,000. The effect on the prior full year period profit and loss
account was to charge an amount of £263,000. The opening reserves have been
restated accordingly by a reduction of £263,000.
4. Taxation
The taxation charge is based on the estimated effective rate for the year ending
30 September 2002.
5. 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 the loss
attributed to equity shareholders of £985,000 (2001: profit of £1,274,000) and
28,149,522 (2001: 25,569,417) shares being the daily average of the number of
shares in issue during the period. The diluted earnings per share are based on
a weighted average of 28,149,522 (2001: 26,015,790) shares after allowing for
the exercise of options.
An adjusted earnings per share value is presented after adding back the
amortisation of goodwill and the exceptional item, net of taxation, as disclosed
in note 2.
6. Net cash flow from operations
2002 2001 Year ended 30 Sept
2001
£000 £000
£000
Operating (loss) / profit (260) 2,414 3,237
Release of government (16) (17) (33)
Amortisation of issue costs 16 6 17
Amortisation of goodwill 432 198 519
Depreciation 542 445 1,075
Loss/(profit) on disposal of fixed 1 2 (5)
assets
Changes in Stocks 1,306 (1,027) (41)
Debtors 1,202 (2,083) 1,925
Creditors (1,305) 496 (3,348)
TOTAL 1,918 434 3,346
7 Acquisitions
The cash outflow shown of £465,000 is the payment of additional consideration
and costs in respect of the acquisitions made in 2001 of Hawnt Electronics Ltd
and the Camax group. The consideration was not due until the final agreement on
the valuation of the net assets.
8 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.
This information is provided by RNS
The company news service from the London Stock Exchange
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