RNS Number:2791A
Eleco PLC
12 March 2001
12 March 2001
ELECO PLC
INTERIM RESULTS FOR THE SIX MONTHS TO
31 DECEMBER 2000
CHAIRMAN'S STATEMENT
Despite the interruptions to our businesses in November and December, caused
by the fuel blockade and the unusually adverse weather conditions in that
period, the Group achieved an increase in turnover in the six months ended 31
December 2000 to #13,867,000 (1999: #12,335,000) of which #296,000 (1999: nil)
was attributed to acquisitions made in the period. Operating profits were
adversely affected by these special circumstances and amounted to #694,000
(1999: #737,000), including #102,000 from the newly acquired software systems
businesses. After deducting net interest payable of #127,000 (1999: #60,000),
profit on ordinary activities before tax for the six months was to #567,000
(1999: #677,000). Earnings per share amounted to 1.27p (1999: 1.45p).
The Board has declared an interim dividend of 0.35p per share (1999: 0.35p),
which will be payable on 9 May 2001 to shareholders on the register on 27
April 2001. The interim dividend is covered 3.5 times by earnings.
Net borrowings during the period rose by #2,171,000. This movement included #
713,000 in respect of acquisitions and #324,000 in respect of capital
expenditure. Stocks and work in progress and other working capital at the end
of the period had risen by more than the anticipated seasonal increase. This
was caused mainly by weather related disruptions to our customers' activities
in November and December and has since been largely reversed.
I am pleased to be able to report on a number of commercial and other
developments.
1. We acquired MBA Computing and Forma Communications. MBA Computing is a
leading developer of AutoCAD based detailed design software for the house
building industry and includes among its clients a number of the leading
UK house builders. Forma Communications is a web related design and
software developer, serving the education field and the construction
industry. Its clients include the Department of Education and Redbus
Interhouse. It also produced the well received SpeedDeck Designer 2
software.
2. The Vitesse composite panel production line has been fully brought into use
at SpeedDeck and the first contracts using this new product have been
completed.
3. Gang-Nail Systems has successfully introduced its Ecojoist flooring system,
which is now backed up by design and engineering software developed by MBA
Computing.
4. We have entered into an agreement with Zeta-Tech Associates Inc. of New
Jersey, USA for the distribution of Zeta-Tech's range of railway track
maintenance software.
Trading Review
Building Systems
Bell & Webster Concrete, Gang-Nail Systems and SpeedDeck Building Systems were
all to a greater or lesser degree affected by the disruption to their
customers' businesses in November and December. Indications from their
customers are that the normal flow of business is returning and orders are
expected to improve. Stramit Industries made solid progress.
Our South African nail plate business continued to make excellent progress. In
contrast, our German nail plate business faired less well and performed
significantly below last year's level due mainly to price pressures in that
market.
Software Systems
MBA computing, which was acquired on 8 September 2000, has made a very
encouraging contribution in its first reporting period as a member of the
Group. Forma Communications was only acquired on 15 December 2000, had little
opportunity to do likewise but I am delighted by the way both businesses have
integrated into the Group and I fully expect them to be earnings enhancing in
the current year.
Rail & Marine
Our rail and marine businesses suffered from a continuing shortage of orders
particularly from the Ministry of Defence but there has been an increase in
activity in the last two months. We continue to seek to add to the Abtus range
of products. However, following its less than satisfactory performance over
the past year, we are conducting a comprehensive review of Abtus' operations.
Outlook
The investment, which has been put in place in the past two years, has
equipped Eleco to respond well to opportunities in its markets. Therefore, the
key to our performance for the remainder of the year will be the extent to
which our customers are able to make up the backlog of work that developed
during the final two months of last year.
John Ketteley
Executive Chairman
9 March 2001
Enquiries to:
John Ketteley, Executive Chairman 01992 440 311
Eleco plc
David Dannhauser, Finance Director 01992 440 311
Eleco plc
David Millham / Tarquin Edwards 020 7256 5756
Millham Communications
Eleco plc
Consolidated profit and loss account
(Unaudited) (Audited)
Half year ended Year ended
31 December 30 June
2000 1999 2000
#'000 #'000 #'000
Turnover
Continuing operations 13,571 12,335 27,549
Acquisitions (Note 1) 296 - -
13,867 12,335 27,549
Operating profit
Continuing operations 592 737 1,719
Acquisitions (Note 1) 102 - -
694 737 1,719
Profit/(loss) on disposal of tangible assets - - (53)
Profit on ordinary activities before interest 694 737 1,666
Net interest payable (127) (60) (147)
Profit on ordinary activities before tax 567 677 1,519
Tax on ordinary activities (61) (115) (131)
Profit on ordinary activities after tax 506 562 1,388
Dividend on ordinary shares (Note 3) (143) (135) (387)
Retained profit 363 427 1,001
Dividends per share 0.35p 0.35p 1.00p
Earnings per share (Note 4) 1.27p 1.45p 3.59p
Diluted earnings per share (Note 5) 1.25p 1.43p 3.53p
Notes
1. On 8 September 2000, the group acquired the entire share capital of MBA
Computing Limited. Goodwill on acquisition of #682,000 has been
capitalised and included within fixed assets. #100,000 of the total
consideration of #549,000 was settled by the issue of 333,330 new
ordinary shares with the balance paid in cash.
On 15 December 2000, the group acquired the entire share capital of Forma
Communications Limited. Goodwill on acquistion of #699,000 has been
capitalised and included within fixed assets. #546,000 of the total
consideration of #681,000 was settled by the issue of 1,820,000 new
ordinary shares with the balance paid in cash.
2. The interim results have been prepared on the basis of the accounting
policies adopted for the year ended 30 June 2000, as set out in the
Company's Annual Report and Accounts, except as modified by the adoption
of the following standards:
FRS 17 - Retirement Benefits
FRS 18 - Accounting Policies
The adoption of these standards has no effect on the results reported in
either the current or previous period.
3. The dividend will be payable on 9 May 2001 to shareholders on the
register on 27 April 2001.
4. Based on the profit attributable to shareholders and a weighted average
of 39,937,219 ordinary shares (Dec 1999 - 38,629,731 and Jun 2000 -
38,631,517).
5. Based on the profit attributable to shareholders and a fully diluted
weighted average of 40,600,754 ordinary shares (Dec 1999 - 38,228,643 and
Jun 2000 - 39,325,776). The dilution is caused by outstanding share
options.
6. The comparative figures for the year to 30 June 2000 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 9 March 2001, are available from the registered office of the
Company, which is at Belcon House, Essex Road, Hoddesdon, Herts EN11 0DR.
Eleco plc
Summarised consolidated balance sheet
(Unaudited) (Audited)
31 December 30 June
2000 1999 2000
#'000 #'000 #'000
Fixed assets (Note 1) 9,112 6,418 7,724
Current assets
Stocks 2,349 1,644 2,107
Debtors 6,860 6,010 6,307
Cash and bank balances 572 666 469
9,781 8,320 8,883
Creditors falling due within one year
Bank loans and overdrafts (2,823) (1,161) (905)
Obligations under finance leases (205) (107) (154)
Other creditors (5,766) (5,630) (6,740)
Net current assets 987 1,422 1,084
Creditors falling due after more than one year
Bank loans (1,340) (743) (1,073)
Obligations under finance leases (232) (125) (194)
Net assets 8,527 6,972 7,541
Capital and reserves
Called up share capital 4,084 3,863 3,864
Share premium account 4,869 4,434 4,435
Merger reserve 367 367 367
Profit and loss account (793) (1,692) (1,125)
Equity shareholders' funds 8,527 6,972 7,541
Reconciliation of movement in equity shareholders' funds
Profit for the period 506 562 1,388
Dividends (143) (135) (387)
Other recognised losses (31) (20) (27)
Proceeds from issue of ordinary shares 8 - 2
Issue of ordinary shares on acquisition of subsidiaries 646 - -
Net increase in equity shareholders funds 986 407 976
Opening equity shareholders' funds 7,541 6,565 6,565
Closing equity shareholders' funds 8,527 6,972 7,541
Eleco plc
Consolidated cash flow statement
(Unaudited) (Audited)
Half year Year
ended ended
31 December 30 June
2000 1999 2000
#'000 #'000 #'000
Net cash (outflow)/ inflow from operating activities (540) 938 2,557
Returns on investment and servicing of finance
Net interest paid (127) (60) (147)
Net cash outflow from returns on investment and servicing (127) (60) (147)
of finance
Taxation (12) (96) (193)
Capital expenditure and financial investment
Purchase of fixed assets (324)(1,333) (2,816)
Sale of tangible fixed assets and investments 4 11 15
Net cash outflow from capital expenditure and financial (320)(1,322) (2,801)
investment
Acquisitions and disposals
Purchase of subsidiaries (713) - -
Net cash outflow from acquisitions and disposals (713) - -
Equity dividends paid (252) (309) (444)
Net cash outflow before financing (1,964) (849) (1,028)
Financing
New bank loans 500 - 500
Repayment of principal under finance leases (110) (72) (164)
Repayment of bank loans (123) (545) (615)
Issue of ordinary shares 8 - 2
Net cash inflow/ (outflow) from financing 275 (617) (277)
Decrease in cash in the period (1,689)(1,466) (1,305)
Reconciliation of operating profit to net cash flow from
operating activities
Operating profit 694 737 1,719
Depreciation charge 504 311 689
Amortisation of intangible assets 18 3 9
Profit on sale of fixed assets (1) (4) (7)
Working capital (increase)/decrease (1,755) (109) 147
(540) 938 2,557
Reconciliation of net cash flow to movement in net debt
Decrease in cash in the period (1,689)(1,466) (1,305)
Cash (inflow)/outflow from (increase)/decrease in debt (267) 617 279
and lease financing
Increase in net debt resulting from cash flows (1,956) (849) (1,026)
New finance leases (191) (104) (312)
Finance lease obligations acquired with subsidiaries (10) - -
Translation difference (14) (15) (17)
Increase in net debt in the period (2,171) (968) (1,355)
Opening net debt (1,857) (502) (502)
Closing net debt (4,028)(1,470) (1,857)
Eleco plc
Segmental analysis
Group turnover and profits were attributable
as follows
External sales Profit/(loss)
(Unaudited) (Audited) (Unaudited) (Audited)
Half year ended Year Half year Year
ended ended ended
31 December 30 June 31 December 30 June
2000 1999 2000 2000 1999 2000
#'000 #'000 #'000 #'000 #'000 #'000
Continuing activities
Building systems 12,937 11,300 25,369 984 875 2,277
Rail and marine 634 1,035 2,180 37 102 134
Software systems 296 - - 102 - -
Corporate - - - (429) (240) (692)
Total continuing 13,867 12,335 27,549 694 737 1,719
Exceptional losses - - (53)
Profit before interest 694 737 1,666
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