RNS Number:9151J
Eleco PLC
18 March 2005
18 March 2005
ELECO PLC
The Building Systems and Construction Software Group
INTERIM RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2004
Enquiries to:
John Ketteley, Executive Chairman Tel: 01920 443 830
Eleco plc john@ketteley.com
David Dannhauser, Finance Director Tel: 01920 443 830
Eleco plc mail@elecoplc.co.uk
Tarquin Edwards/Chris Steele Tel: 07879 458 364 / 07979 604 687
Binns & Co PR Tel: 020 7786 9600
"Building on Technology"
Highlights
*Turnover up 5.9% to #22,882,000 (2003: #21,615,000) following improved
performances in the Building Systems and Software divisions.
*Operating profits of continuing operations improved to #695,000 (2003:
#615,000) benefiting from reduced losses from Software's continuing
operations.
*Higher profits from the Building Products division in the UK and overseas
and together with a better performance by Software have offset the
temporarily constrained performance from Bell & Webster Concrete and have
enabled the results of continuing operations to be marginally ahead of the
corresponding period last year.
*Interim dividend increased by 6.7% to 0.40p per share (2003: 0.375p).
John Ketteley, Executive Chairman of Eleco plc, commented:
"Turnover and operating profits from our continuing operations were ahead of
those for the corresponding period last year. As anticipated at the time of the
Annual General Meeting in November 2004, operational constraints at Bell &
Webster Concrete gave rise to lower pre-tax profits from the Precast activities
than the previous half-year. However, this was more than offset by higher
profits from the other Building Products activities in the UK and overseas
together with a better performance from the Software businesses."
"We now have a proven executive team in place at Precast, Building Products and
Software. Demand for our existing ranges of building products in Germany, South
Africa and the UK is good. We are bringing new building products to market,
backed by innovative supporting software and sales of our software programs are
increasing. "Building on Technology" sums up our corporate strategy and we
continue to put in place a sound base for future growth."
Chairman's Statement
Turnover and operating profits from our continuing operations were ahead of
those for the corresponding period last year. As anticipated at the time of the
Annual General Meeting in November 2004, operational constraints at Bell &
Webster Concrete gave rise to lower pre-tax profits from Precast activities than
the previous half-year. However, this was more than offset by higher profits
from the other Building Products activities in the UK and overseas together with
a better performance from the Software businesses.
Turnover in the six months ended 31 December 2004 was #22,882,000 (2003:
#21,615,000) an increase of 5.9 per cent. over the turnover for the
corresponding period last year. Turnover of Building Systems was #20,174,000
(2003: #19,179,000), an increase of 5.2 per cent., while turnover of Software
was also higher, up 11.1 per cent. at #2,708,000 (2003: #2,436,000), #150,000 of
which was contributed by discontinued operations (2003: #301,000).
Operating profits from continuing operations amounted to #695,000 (2003
#615,000). Losses of discontinued operations amounted to #55,000 (2003: loss
#161,000). Building Systems contributed a profit of #1,528,000, (2003:
#1,588,000); Software's continuing operations incurred a loss of #386,000 (2003:
#543,000) after goodwill amortisation of #135,000 (2003: #129,000).
In December 2003 we reduced the scale of our new media interests in response to
the tightening of market conditions in the UK. In the event conditions continued
to worsen and, accordingly, in December 2004 we decided to take the further step
of closing the Stafford office. After making provision for closure losses of
#155,000 on termination of these discontinued operations that are anticipated to
arise in the second part of the year, the Group profit on ordinary activities
before tax amounted to #343,000 (2003: loss #515,000). Earnings per share were
equivalent to 0.3p (2003: loss per share 1.3p).
The Board has declared an increased interim dividend of 0.40p per share (2003:
0.375p), up 6.7 per cent. which will be payable on 22 April 2005 to shareholders
on the Register on 1 April 2005.
Borrowings increased during the period by #2,248,000 (2003: #1,527,000). The net
outflow from operating activities of #198,000 compares with a net inflow of
#840,000 in the corresponding period. The principal contributing factors to the
higher than seasonal increase in working capital during the period were the
settlement of #662,000 VAT output tax on intra-group property transfers, to
which reference was made in the last full year accounts, and investment in
working capital in starting up operations at Eleco Timber Frame. Interest
charges amounted to #142,000 (2003: #99,000), reflecting both higher borrowings
and higher interest rates over the corresponding period last year.
Building Systems
Precast Concrete
At the AGM in November 2004 I reported that due to contract delays on Phase III
of the Lancaster University Accommodation Project beyond our control, the
recovery in Bell & Webster's profitability would depend on the timing of the
start on production of units for Phase III in the second half of the year. In
the event, the need for the main contractor, Jarvis Group, to divest itself of
its interest in the contract and for a new contractor to assume responsibility
for Phase III gave rise to a greater delay than was anticipated at the time of
the statement to which I refer.
As a consequence Bell & Webster's work on site is now due to begin in March 2005
compared with the original start date of August 2004. This interruption to the
Lancaster University Student Accommodation Project was the principal factor in
Bell & Webster's turnover in the half year being some 13 per cent. lower than
the corresponding period last year.
While this delay is disappointing, It is most encouraging to us that the high
standard of Bell & Webster's product and service resulted in Bell & Webster
being retained for Phase III and we look forward to working with our new
partners on the Project.
Demand and enquiries for Bell & Webster FastBuild(R) rooms and standard precast
concrete products are currently running at a good level and I anticipate a
better performance in the second half year although the delay in starting
production of units for Phase III will mean that the results of Bell & Webster
Concrete for the year as a whole will be lower than those for the previous year.
Building Products
Paul Taylor was appointed Chief Executive of Building Products UK on 1 July
2004.
Roofing, Cladding and Panels
Sales of SpeedDeck Building Systems were 7 per cent. higher than those for the
corresponding period last year. Good progress was made in the period on bringing
together Downer Cladding Systems, Prompt Profiles and SpeedDeck Building Systems
businesses to provide a complete roofing and cladding service to our customers.
At Stramit, ElecoFloor(R) continued to gain acceptance by leading house builders
as an efficient and economical acoustic flooring product.
Eleco Timber Frame commenced production of ElecoFrame(R), a patented timber
structural wall frame system, at Speke at the end of June 2004. This operation
has started well and made a positive contribution to the Group's results in the
period.
Timber Engineering Products
Gang-Nail Systems in the UK performed well in the period although sales were
down 3 per cent. on the corresponding period of the previous year despite having
to accommodate significant increases in raw material prices.
Eleco Bauprodukte in Germany produced an improved performance with sales up 33
per cent. over the corresponding period of the previous year as a consequence of
a good all round service performance.
International Truss Systems in South Africa produced another exceptional
performance with sales up 64 per cent. on the corresponding period.
Software
Centres of excellence in software have been established in Sweden, Germany, and
the UK and in December 2004 we announced the appointment of Nick Caw as Chief
Executive of Eleco Software. The application of fast and efficient software in
the design and production of building products and components is a fundamental
strength of our business. The aim is to establish Eleco Software as a profitable
entity in architectural, constructional timber engineering and 3D visualisation
and compression software and to co-ordinate the development of existing and new
programs through our software development teams. We are making significant
progress towards these objectives.
The copyright dispute relating to our ArCon(R) software was settled at the end
of December 2004 and the benefits of the settlement will make a positive
contribution to results in the second half-year.
In Sweden, Consultec System, Consultec Byggprogram and Consultec A&K, together
produced a sound performance in a difficult market environment. Consultec System
appointed a distributor for its StairCon(R) program in the US, with first sales
achieved.
In the UK, Eleco Software also recorded much improved results compared with the
corresponding period last year. Its new Whole House Engineering program was well
received at 7 introductory seminars in the UK and Ireland.
Eleco Software Germany will shortly release ArCon Version 9 in Germany and also
the latest version of o2c(R) 3D visualisation and compression software.
Outlook
Demand for Eleco's building products has been steady and we do not anticipate
any change in the second half of the year. The launch of Whole House Engineering
software has already helped to create interest in our building products from
potential new customers although it is unlikely that the full benefit of this
development will be felt in the second half year. I anticipate that Software
will produce a better performance in the second half due partly to much lower
legal costs and partly to increased income from ArCon, particularly the retail
version, which is the number one seller in the French and German retail markets.
The uncertainty caused by the contract delays on Phase III of the Lancaster
University Accommodation Project has now been resolved but the effect of the
delay means that the contribution from Precast will be lower than last year.
We now have a proven executive team in place at Precast, Building Products and
Software. Demand for our existing ranges of building products in Germany, South
Africa and the UK is good. We are bringing new building products to market,
backed by innovative supporting software and sales of our software programs are
increasing. "Building on Technology" sums up our corporate strategy and we
continue to put in place a sound base for future growth.
John Ketteley
EXECUTIVE CHAIRMAN
18 March 2005
Eleco plc
-----------
Consolidated Profit and Loss Account
--------------------------------------
(Unaudited) (Audited)
Half year ended Year ended
31 December 30 June
2004 2003 2004
#'000 #'000 #'000
---- -------------------------------- ------ -------- --------
Turnover
Continuing operations 22,732 21,314 44,132
Discontinued operations 150 301 630
---- -------------------------------- ------ -------- --------
22,882 21,615 44,762
---- -------------------------------- ------ -------- --------
Operating profit
Continuing operations 695 615 2,361
Discontinued operations (55) (161) (192)
---- -------------------------------- ------ -------- --------
640 454 2,169
Provision for loss on
termination of
discontinued operations (155) (870) (996)
----------------------------------- ------ -------- --------
Profit / (loss) on
ordinary activities before
interest 485 (416) 1,173
Net interest payable (142) (99) (237)
Profit / (loss) on
ordinary activities before
tax 343 (515) 936
Tax on ordinary activities (190) (118) (625)
Profit / (loss) on
ordinary activities after
tax 153 (633) 311
Dividend on ordinary
shares (Note 2) (195) (184) (611)
Retained loss (42) (817) (300)
----------------------------------- ------ -------- --------
Dividends per share 0.40p 0.375p 1.20p
Earnings / (loss) per
share (Note 3) 0.3p (1.3)p 0.6p
Diluted earnings / (loss)
per share (Note 4) 0.3p (1.3)p 0.6p
----------------------------------- ------ -------- --------
Notes
-------
1. The interim results have been prepared on the basis of the accounting
policies adopted for the year ended 30 June 2004, as set out in the
Company's Annual Report and Accounts. These interim accounts do not
constitute the Company's statutory accounts for the period.
2. The dividend will be payable on 22 April 2005 to shareholders on the
register on 1 April 2005.
3. Based on the profit attributable to shareholders and a weighted average of
48,677,587 ordinary shares (Dec 2003 - 48,038,303 and Jun 2004 -
48,350,144).
4. Based on the profit attributable to shareholders and a diluted weighted
average of 48,695,790 ordinary shares (Dec 2003 - 48,416,682 and Jun 2004 -
48,417,491). The dilution is caused by outstanding share options.
5. On 1 July 2004 the Group acquired the entire issued share capital of Ten
Data AB, the owner of the intellectual property in the Ten Win software,
and the business and certain assets of Ten Win AB, for a total initial
consideration, including acquisition expenses of #234,000. Provision has
been made for #57,000 deferred contingent consideration payable. Both
companies are Swedish.
Goodwill on acquisition of #199,000, based on provisional fair values, has
been capitalised and included within fixed assets. The total initial
consideration of #234,000, including expenses was paid in cash and #146,000
cash was acquired.
The assets and business acquired were immediately transferred to, and
integrated within, Consultec Byggprogram AB.
6. The comparative figures for the year ended 30 June 2004 have been taken
from but do not constitute the Company's statutory accounts for that
financial year. Those accounts have been reported on by the Company's
auditors and delivered to the Registrar of Companies. The report of the
auditors was unqualified and did not contain a statement under section 237
(2) or (3) of the Companies Act 1985.
7. Copies of this interim statement and results, which were approved by the
Board on 17 March 2005, are available from the registered office of the
Company, which is at Eleco House, 15 Gentlemen's Field, Westmill Road,
Ware, Herts. SG12 0EF.
Statement of Total Recognised Gains and Losses
------------------------------------------------
(Unaudited) (Audited)
Half year ended Year ended
31 December 30 June
2004 2003 2004
#'000 #'000 #'000
--- ---------------------------------- ------ -------- -------
Profit / (loss) for the period 153 (633) 311
--- ---------------------------------- ------ -------- -------
Currency translation differences on foreign 34 63 47
--- currency net investments ------ -------- -------
----------------------------------
Total recognised gains / (losses) for the 187 (570) 358
--- period ------ -------- -------
----------------------------------
Reconciliation of Movement in Equity Shareholders' Funds
----------------------------------------------------------
(Unaudited) (Audited)
Half year ended Year ended
31 December 30 June
2004 2003 2004
#'000 #'000 #'000
--- ---------------------------------- ------ -------- --------
Profit / (loss) for the period 153 (633) 311
Other recognised gains 34 63 47
LTIP amortisation expense net of vesting 94 51 175
charge
Decrease in own shares held by ESOT - 37 (45)
Dividends (195) (184) (611)
Issue of ordinary shares 3 39 68
--- ---------------------------------- ------ -------- --------
Net increase / (reduction) in equity 89 (627) (55)
shareholders' funds
Opening equity shareholders' funds 11,581 11,636 11,636
--- ---------------------------------- ------ -------- --------
Closing equity shareholders' funds 11,670 11,009 11,581
--- ---------------------------------- ------ -------- --------
Eleco plc
-----------
Summarised Consolidated Balance Sheet
---------------------------------------
(Unaudited) (Audited)
31 December 30 June
--- --- --- ---
2004 2003 2004
--- --- --- ---
#'000 #'000 #'000
-- ------------------------ ---- ---- -------- ------ -------- --------
Fixed assets
Intangible assets 5,892 5,617 5,935
Tangible assets 8,019 7,579 8,023
Investments 615 474 523
-- ------------------------ ---- ---- -------- ------ -------- --------
14,526 13,670 14,481
-- ------------------------ ---- ---- -------- ------ -------- --------
Current assets
Stocks 2,819 1,998 2,370
Debtors 10,281 9,885 9,140
Cash and bank balances 2,540 2,425 2,490
-- ------------------------ ---- ---- -------- ------ -------- --------
15,640 14,308 14,000
Creditors falling due within one
year
Bank loans and overdrafts (2,965) (4,180) (891)
Obligations under finance (200) (184) (175)
leases
Other creditors (13,204) (10,422) (12,562)
------------------------ ---- ---- -------- ------ -------- --------
Net current
(liabilities)
/ assets (729) (478) 372
------------------------ ---- ---- -------- ------ -------- --------
Creditors falling due after more
than one year
Bank loans (1,184) (1,411) (1,471)
Obligations under finance (277) (255) (263)
leases
Other creditors - - (1,125)
-- ------------------------ ---- ---- -------- ------ -------- --------
(1,461) (1,666) (2,859)
Provisions for
liabilities
and charges (666) (517) (413)
------------------------ ---- ---- -------- ------ -------- --------
Net assets 11,670 11,009 11,581
------------------------ ---- ---- -------- ------ -------- --------
Capital and reserves
Called up share capital 4,911 4,894 4,910
Share premium account 6,022 6,007 6,020
Merger reserve 367 367 367
Other reserve - own shares held (50) (145) (50)
by ESOT
Profit and loss account 420 (114) 334
------------------------ ---- ---- -------- ------ -------- --------
Equity
shareholders'
funds 11,670 11,009 11,581
------------------------ ---- ---- -------- ------ -------- --------
Eleco plc
-----------
Consolidated cash flow statement
----------------------------------
(Unaudited) (Audited)
Half year ended Year ended
31 December 30 June
--- ---
2004 2003 2004
--- ---
#'000 #'000 #'000
-- ------------------------------- ----- ------ -------- --------
Operating activities
Net cash (outflow) / inflow from continuing (198) 840 4,879
operating activities
Net cash outflow from discontinued (20) (91) -
operating activities
-------------------------------- ----- ------ -------- --------
Net cash
(outflow) /
inflow from
operating
activities (218) 749 4,879
-------------------------------- ----- ------ -------- --------
Returns on investment and servicing of
finance
Net interest paid (136) (86) (234)
---------------------------------- ------ -------- --------
Net cash
outflow from
returns on
investment and
servicing of
finance (136) (86) (234)
---------------------------------- ------ -------- --------
Taxation (349) (408) (773)
-------------------------------- ----- ------ -------- --------
Capital expenditure and financial investment
Purchase of fixed assets (548) (671) (1,259)
Sale of tangible fixed assets and 95 70 103
investments
Purchase of investment (92) (105) (154)
---------------------------------- ------ -------- --------
---------------------------------- ------ -------- --------
Net cash
outflow from
capital
expenditure
and financial
investment (545) (706) (1,310)
---------------------------------- ------ -------- --------
Acquisitions and disposals
Purchase of subsidiary undertakings net of (97) (254) 372
cash acquired
-- ------------------------------- ----- ------ -------- --------
Net cash
(outflow) /
inflow from
acquisitions
and disposals (97) (254) 372
---------------------------------- ------ -------- --------
Equity
dividends paid (426) (410) (597)
-------------------------------- ----- ------ -------- --------
Net cash
(outflow) /
inflow before
financing (1,771) (1,115) 2,337
-------------------------------- ----- ------ -------- --------
Financing
New bank loans - - 500
Repayment of principal under finance (88) (126) (225)
leases
Repayment of bank loans (392) (325) (685)
Issue of ordinary shares 3 39 68
Own shares purchased by Employee Share - - (45)
Ownership Trust
-------------------------------- ----- ------ -------- --------
Net cash
outflow from
financing (477) (412) (387)
-------------------------------- ----- ------ -------- --------
(Decrease) /
increase in
cash in the
period (2,248) (1,527) 1,950
-------------------------------- ----- ------ -------- --------
Eleco plc
-----------
Consolidated cash flow statement - reconciliations
----------------------------------------------------
Reconciliation of operating profit to net cash flow from operating activities
Continuing Discontinued
(Unaudited) (Audited) (Unaudited) (Audited)
Half year ended Year ended Half year ended Year ended
31 December 30 June 31 December 30 June
2004 2003 2004 2004 2003 2004
#'000 #'000 #'000 #'000 #'000 #'000
------ -------- -------- ------ -------- --------
Operating profit 695 620 2,335 (55) (166) (166)
Termination costs - - - - - (230)
and losses
Depreciation 669 595 1,249 10 11 20
charge
Amortisation of 171 168 352 - - -
intangible assets
Amortisation of 94 88 175 - - -
LTIP Awards
Loss / (profit) on 3 23 (2) - - 8
sale of fixed
assets
Changes in 88 (134) 42 (88) 134 (42)
intra-group
indebtedness
Working capital (1,918) (520) 1,054 113 (70) 84
(increase) /
decrease
-- ------------------- ------ -------- -------- ------ -------- --------
Net cash (outflow) (198) 840 5,205 (20) (91) (326)
-- / inflow from ------ -------- -------- ------ -------- --------
operating
activities
-------------------
Reconciliation of net cash flow to movement in net
debt
(Unaudited) (Audited)
Half year ended Year ended
31 December 30 June
2004 2003 2004
#'000 #'000 #'000
-- ------------------------------- ------ ------ -------- --------
Decrease in cash in the period (2,248) (1,527) 1,950
Cash flow from movements in debt and lease 480 451 410
-- financing ------ ------ -------- --------
-------------------------------
(Increase) / decrease in net debt (1,768) (1,076) 2,360
resulting from cash flows
New finance leases (145) (174) (281)
Effects of changes in foreign exchange 137 50 16
-- rates ------ ------ -------- --------
-------------------------------
(Increase) / decrease in net debt (1,776) (1,200) 2,095
Opening net debt (310) (2,405) (2,405)
-- ------------------------------- ------ ------ -------- --------
Closing net debt (2,086) (3,605) (310)
-- ------------------------------- ------ ------ -------- --------
Segmental analysis
Group turnover and profits were attributable as
follows
External sales Profit / (loss)
----------------- ------------------
(Unaudited) (Audited) (Unaudited) (Audited)
Half year ended Year ended Half year ended Year ended
31 December 30 June 31 December 30 June
2004 2003 2004 2004 2003 2004
#'000 #'000 #'000 #'000 #'000 #'000
------------------- ------ -------- -------- ------ -------- --------
Continuing activities
Building systems 20,174 19,179 40,040 1,209 1,285 3,433
Software systems 2,558 2,371 4,092 (514) (670) (1,072)
------------------- ------ -------- -------- ------ -------- --------
Total continuing 22,732 21,550 44,132 695 615 2,361
------------------- ------ -------- -------- ------ -------- --------
Discontinued
activities
Software systems 150 301 630 (55) (161) (192)
------------------- ------ -------- -------- ------ -------- --------
Total discontinued 150 301 630 (55) (161) (192)
------------------- ------ -------- -------- ------ -------- --------
Exceptional losses - (155) (870) (996)
discontinued activities
------------------- ------ -------- -------- ------ -------- --------
Profit / (loss) before 485 (416) 1,173
interest ------ -------- -------- ------ -------- --------
-------------------
This information is provided by RNS
The company news service from the London Stock Exchange
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