RNS Number:4707S
Eleco PLC
11 October 2005
For release 11 October 2005
ELECO PLC
The Building Systems and Construction Software Group
PRELIMINARY RESULTS
for Year ended 30 June 2005
Enquiries:
Eleco plc Tel: 01920 443 830
John Ketteley, Executive Chairman john@ketteley.com
David Dannhauser, Finance Director mail@eleco.com
Binns & Co PR Tel: 020 7786 9600
Tarquin Edwards 07879 458 364
"An Excellent Performance"
Highlights
Financial
* Turnover increased by 7.3 % to #48,018,000 (2004: #44,762,000)
* Operating profit grew strongly by 21.6 % to #2,637,000 (2004:
#2,169,000)
* Profit before tax rose by 144.3 % to #2,287,000 (2004: #936,000)
* EPS, adjusting for the post-tax losses of discontinued operations, was
4.5p (2004: 2.8p)
* Positive operating cash flow again this year saw gearing eliminated
Operational
* Building Systems continue to make excellent progress across most
divisions
* Construction Software moving forward steadily
John Ketteley, Executive Chairman of Eleco plc, commented re: Outlook:
"The Group has made a good start to the year and performance for the first
quarter is ahead of the same period the previous year.
The outlook in some of our markets, particularly in the UK, is more uncertain
than it has been for some time and there are some signs that demand may be
weakening in some sectors of the construction industry. That said, builders are
increasingly employing building systems that make use of offsite manufactured
products, supported by effective software technologies and Eleco is well placed
to provide such systems. With its strong financial position, good cash
generation and the benefit to be gained from our continuing investment in new
building systems and software, I have every confidence in the future of the
Eleco Group".
Chairman's Statement
I am pleased to present my statement for the year ended 30 June 2005 and the
outlook for the current year.
Group turnover for the year was #48,018,000 (2004: #44,762,000), an increase of
7.3 per cent.
Group operating profit for the year amounted to #2,637,000 (2004: #2,169,000),
an increase of 21.6 per cent. Profit on ordinary activities before tax amounted
to #2,287,000 (2004: #936,000) after net interest payable of #226,000 (2004:
#237,000).
Group profit for the year after tax was #2,056,000 (2004: #311,000), equivalent
to 4.2p per share (2004: 0.6p per share). Earnings per share of continuing
operations, adjusting for the post-tax losses of discontinued operations,
amounted to 4.5p (2004: 2.8p). The low tax charge for the year reflects the
benefit from utilising brought forward losses for which no deferred tax asset
was previously recognized.
The above results were achieved after #1,254,000 (2004: #964,000) expenditure on
research and development. I consider it a creditable achievement for Eleco to
have been included in the Department of Trade and Industry list of the top 700
UK companies for investment in research and development.
Operating cash flow was again pleasingly strong in the year. As a consequence,
gearing was eliminated. Net funds in hand at 30 June 2005 amounted to #176,000
compared with total net borrowings at 30 June 2004 of #310,000.
All the above performance measures are most encouraging.
Dividend
Having regard to the strong performance of your company over the past year, the
Board has proposed an increased final dividend of 1.00p per share (2004:
0.875p), which, subject to approval by shareholders, will be paid on 9 December
2005 to shareholders on the Register on 25 November 2005. The proposed final
dividend, together with the interim dividend of 0.4p would result in the payment
of total dividends for the year totaling 1.40p per share (2004: 1.25p), an
increase of 12.0 per cent.
OPERATING REVIEW
Building Systems
Overall, the Building Systems operations made excellent progress during the
year. Turnover increased by 5.7 per cent to #42,333,000 (2004: #40,040,000).
Operating profit increased by 8.5 per cent. to #3,725,000 (2004: #3,433,000).
Precast Concrete
As anticipated in my interim statement, Bell & Webster Concrete's performance
was adversely affected by the disruption caused by delays to the Lancaster
University student accommodation project that resulted from the replacement of
the main contractor. However, a new sub-contract for Phase III of the project
was agreed with the new main contractor, Norwest Holst.
Bell & Webster is experiencing continuing firm interest in its FastBuild Rooms
for hotel and student accommodation. Demand for terracing, retaining walls and
ground beam products continues at reasonable levels.
Roofing, and Cladding and Panels
The Roofing and Cladding businesses produced mixed performances in a difficult
market environment. Lower profits of SpeedDeck Building Systems were compensated
by good profits from Prompt Profiles and Downer Cladding. SpeedDeck Building
Systems' sales in the final quarter were adversely affected by on the site of a
major roofing project at Rothley Park.
The newly completed SpeedDeck(R) Designer 3 has now been distributed to our
customers as well as to other interested parties. This roofing design and
specification software tool, which is capable of demonstrating the technical
features of projects in a 3D format, has received excellent reviews in the trade
press.
Eleco Timber Frame was established in Speke at the beginning of the year to
manufacture a patented, engineered timber wall framing system principally used
in the housing sector and I am pleased to report it made a profit in its first
year. Eleco Timber Frame is also a manufacturer of Ecojoist(R), our metal web
floor joist product. Demand for these products has been such that we have
recently established a second production unit in Speke and are currently setting
up another manufacturing unit at Yaxley to complement the operations at Speke.
The expansion of Eleco Timber Frame is being facilitated by the use of enhanced
design software, developed by Eleco Software and M@trix enterprise management
software, developed by Gang-Nail Systems.
Stramit Industries again made a loss as sales of plasterboard partition panels
remained depressed. Sales of Elecofloor(R) acoustic flooring products showed a
useful increase.
Timber Engineering Systems
All the timber engineering systems businesses performed well in the year under
review.
Gang-Nail Systems had another excellent year making a higher contribution to
Group profits despite the impact of higher steel prices. Its results benefited
from a significantly increased volume of orders for nail plates from Eleco
Bauprodukte, which continued to improve its market share in Germany and which
made a useful contribution to profits compared with a small loss in the previous
year.
International Truss Systems delivered another outstanding performance despite
higher steel prices. It has now introduced GN Roof and Truss Windows(R) based
software to its customers in South Africa to replace the original DOS based
design and engineering software. The new program was very well received.
Construction Software
Turnover of our continuing Construction Software operations increased by 28.6
per cent. to #5,503,000 (2004: #4,280,000). The operating loss from these
activities was marginally lower at #1,033,000 (2004: #1,072000). It should be
noted that major new licensing and distribution agreements were agreed during
the latter part of the year under review, from which benefits will flow in
future periods.
We continued to make progress in co-coordinating software development and
marketing activities during the year. Fully expensed spending on software
development and enhancement rose to #835,000 in the year under review from
#550,000 in 2004.
Consultec Sweden produced higher profits for the year whereas Eleco Software in
the UK and in Germany were again loss making, due in part to the incidence of
the fully expensed cost of their respective software development programmes.
In October 2005 we acquired Esign GmbH, a developer of specialised software for
the floor coverings market. Esign has already made a significant impact in the
German market with its catalogue management and visualisation software and its
products have started to penetrate international markets.
Management and Employees
I would like on your behalf to thank all our employees for their efforts during
the year and their contribution to the achievement of these results.
Herman Scopes, who was appointed to the Board in 1998, will be retiring at the
Annual General Meeting. I would like to thank him for his wise counsel and
contribution to the Group's affairs.
Outlook
The Group has made a good start to the year and performance for the first
quarter is ahead of the same period the previous year.
The outlook in some of our markets, particularly in the UK, is more uncertain
than it has been for some time and there are some signs that demand may be
weakening in some sectors of the construction industry. That said, builders are
increasingly employing building systems that make use of offsite manufactured
products, supported by effective software technologies and Eleco is well placed
to provide such systems. With its strong financial position, good cash
generation and the benefit to be gained from our continuing investment in new
building systems and software, I have every confidence in the future of the
Eleco Group.
John Ketteley
EXECUTIVE CHAIRMAN
11 October 2005
Eleco plc
Consolidated Profit and Loss Account (Unaudited)
For the year ended 30 June 2005
Notes 2005 2004
#'000 #'000
Turnover
Continuing operations 3 47,836 44,320
Discontinued operations 182 442
Turnover 48,018 44,762
Operating profit
Continuing operations 3 2,692 2,361
Discontinued operations 3 (55) (192)
Operating profit 2,637 2,169
Loss on termination of discontinued operations (124) (996)
Profit on ordinary activities before interest 2,513 1,173
Net interest payable (226) (237)
Profit on ordinary activities before taxation 2,287 936
Taxation (231) (625)
Profit for the financial year 2,056 311
Dividends 4 (682) (611)
Retained profit/(loss) 1,374 (300)
Dividends per share 4 1.4p 1.25p
Basic earnings per ordinary 10p share 5 4.2p 0.6p
Diluted earnings per ordinary 10p share 5 4.2p 0.6p
Reconciliation of Movement in Equity Shareholders' Funds
(Unaudited)
for the year ended 30 June 2005
2005 2004
#'000 #'000
Profit for the financial year as reported 2,056 311
Other recognised profits relating to the year (78) 47
LTIP expense 203 175
Increase in own shares held by ESOT - (45)
Dividends (682) (611)
Proceeds from issue of ordinary shares 3 68
Net increase in equity shareholders' funds 1,502 (55)
Opening equity shareholders' funds 11,581 11,636
Closing equity shareholders' funds 13,083 11,581
Eleco plc
Summarised Consolidated Balance Sheet (Unaudited)
at 30 June 2005
2005 2004
#'000 #'000
Fixed assets 14,697 14,481
Current assets
Stocks 2,166 2,370
Debtors 10,516 9,140
Cash at bank and in hand 2,707 2,490
15,389 14,000
Creditors: amounts falling due within one year (15,309) (13,628)
Net current assets 80 372
Total assets less current liabilities 14,777 14,853
Creditors: amounts falling due after more than one year (1,409) (2,859)
Provisions for liabilities and charges (285) (413)
Net assets 13,083 11,581
Capital and reserves
Called up share capital 4,911 4,910
Share premium account 6,022 6,020
Merger reserve 367 367
Other reserve (50) (50)
Profit and loss account 1,833 334
Equity shareholders' funds 13,083 11,581
Eleco plc
Consolidated Cash Flow Statement (Unaudited)
for the year ended 30 June 2005
Notes 2005 2004
#'000 #'000
Net cash inflow from continuing operations 7 3,999 5,170
Net cash inflow/(outflow) from discontinued operations 7 56 (291)
Net cash inflow from operating activities 7 4,055 4,879
Returns on investment and servicing of finance
Interest received 196 130
Interest paid (401) (342)
Interest element of finance lease rentals (32) (22)
Net cash outflow from returns on investment and servicing (237) (234)
of finance
Net cash outflow from taxation (532) (773)
Capital expenditure and financial investment
Purchase of fixed assets (1,269) (1,259)
Disposal of tangible fixed assets 100 103
Purchase of investments (217) (154)
Net cash outflow from capital expenditure and financial (1,386) (1,310)
investment
Acquisitions and disposals
Purchase of subsidiary undertakings (333) (363)
Cash acquired with subsidiary undertakings 163 735
Net cash (outflow)/inflow from acquisitions and disposals (170) 372
Equity dividends paid (621) (597)
Net cash inflow before financing 1,109 2,337
Financing
New bank loans 150 500
Repayment of principal under finance leases (293) (225)
Repayment of bank loans (746) (685)
Issue of ordinary shares 3 68
Own shares purchased by Employee Share Ownership Trust - (45)
Net cash outflow from financing (886) (387)
Increase in cash in the year 8 223 1,950
Eleco plc
Notes
1. The financial information in this announcement does not constitute statutory accounts
within the meaning of section 240 of the Companies Act 1985. Statutory accounts of the
Company, on which the Auditors will report, will be delivered to the Registrar of
Companies and posted to shareholders on 21 October 2005. The comparative figures for
the year to 30 June 2004 have been taken from, but do not constitute, the Company's
statutory financial statements for that financial year. Those financial statements
have been reported on by the Auditors and delivered to the Registrar of Companies. The
Report of the Auditors was unqualified and did not contain a statement under s237(2)
or (3) of the Companies Act 1985.
2. The information herein has been prepared on the basis of the accounting policies
adopted for the year ended 30 June 2005, as set out in the Company's Annual Report and
Accounts.
3. Turnover and Segmental analysis
Group turnover and profits were attributable as follows
Turnover Operating profit/
(loss)
2005 2004 2005 2004
#'000 #'000 #'000 #'000
Continuing operations
Building Systems 42,333 40,040 3,725 3,433
Software Systems 5,503 4,280 (1,033) (1,072)
Total continuing 47,836 44,320 2,692 2,361
Discontinued operations
Software Systems 182 442 (55) (192)
Total discontinued 182 442 (55) (192)
Total 48,018 44,762 2,637 2,169
4. A dividend of #195,000 (0.4p per share) was declared at the interim stage. A final
dividend representing 1.00p per share is being proposed and, if approved at the
Annual General Meeting, will be payable on 9 December 2005 to shareholders on the
register on 25 November 2005.
5. The calculation of basic earnings per share is based on the profit attributable to
equity shareholders of #2,056,000 (2004: #311,000) and on 48,680,560 ordinary
shares (2004: 48,350,144), being the weighted average number of ordinary shares in
issue during the year.
The calculation of diluted earnings per share is based on the profit attributable
to equity shareholders of #2,056,000 (2004: #311,000) and on 48,700,519 ordinary
shares (2004: 48,417,491), being the weighted average diluted number of ordinary
shares in issue during the year.
The earnings per share from continuing operations is 4.5p (2004: 2.8p), which gives
a clearer guide to the underlying performance in the period. The calculation is
based upon the profit on continuing operations attributable to equity shareholders
of #2,181,000 (2004: #1,354,000) and on 48,680,560 (2004: 48,350,144) ordinary
shares, being the weighted average number of ordinary shares in issue during the
year.
6. Reconciliation of operating profit to net cash flow from
operating activities
Continuing Discontinued
2005 2004 2005 2004
#'000 #'000 #'000 #'000
Operating profit 2,692 2,361 (55) (192)
Termination costs and losses - - (124) (230)
Depreciation charge 1,334 1,229 13 40
Amortisation of intangible assets 545 352 - -
Amortisation of LTIP awards 203 175 - -
(Profit)/loss on sale of fixed assets (5) (3) 3 9
Working capital (increase) / decrease (770) 1,056 219 82
Net cash inflow/(outflow) from 3,999 5,170 56 (291)
operating activities
7. Reconciliation of net cash flow to movement in net
debt
2005 2004
#'000 #'000
Increase in cash in the year 223 1,950
Cash flow from movements in debt and lease 889 410
financing
Increase in net debt resulting from cash flows 1,112 2,360
Other non-cash items:
New finance leases (555) (281)
Effects of changes in foreign exchange rates (71) 16
Decrease in net debt in the year 486 2,095
Opening net debt (310) (2,405)
Closing net funds/(debt) 176 (310)
8. The Annual General Meeting of Eleco plc will be held at The London Capital Club, 15
Abchurch Lane, London EC4N 7BB at 12:00 noon on 16 November 2005.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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