RNS Number:9936S
Eleco PLC
14 March 2007
For release 7.00am 15 March 2007
ELECO PLC
The Building Systems and Software Group
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2006
Enquiries to:
John Ketteley, Executive Chairman Tel: 01920 443 830
Eleco plc john.ketteley@eleco.com
David Dannhauser, Finance Director Tel: 01920 443 830
Eleco plc david.dannhauser@eleco.com
Richard Thompson/Philip Davies Tel: 020 7149 6457
Charles Stanley Securities (Nomad)
Tarquin Edwards Tel: 07879 458 364
Adventis Financial PR Tel: 020 7034 4758
"Continued strong growth by this specialist provider of offsite building systems
and software solutions"
Highlights
* Turnover increased 9.2% from #26.5m to #28.9m
* Profit before tax increased by 16.9% to #2.25m (2005: #1.93m)
* Increase of 15.6% in EPS to 3.3p from 2.9p
* Interim dividend increased by 16.7% to 0.7p (2005: 0.6p), 4.4 times
covered
* Software interests significantly strengthened by the acquisition of Asta
Development, a leader in the provision of project and resource management
software to the UK construction and engineering industries.
John Ketteley, Executive Chairman of Eleco plc, commented:
"The level of enquiries received by our offsite building systems businesses
remains strong and our UK order position remains healthy; we have strengthened
considerably our software interests with the acquisition of Asta Development, a
leader in project management software; and the Group maintains its sound
financial position. For these reasons, I remain confident in the prospects for
Eleco going forward".
Chairman's Statement
I am pleased to present my statement for the half year ended 31 December 2006.
The Group's performance in the period under review as measured by the key
performance indicators as set out below is again encouraging.
Performance Summary
Group turnover in the six months ended 31 December 2006 amounted to #28,926,000
(2005: #26,499,000), an increase of 9.2 per cent. Group operating profit was
11.1 per cent higher at #2,243,000 (2005: #2,019,000) after higher goodwill
amortisation costs of #221,000 (2005: #183,000).
Profit on ordinary activities before tax was #2,250,000 (2005: #1,925,000), an
increase of 16.9 per cent after accounting for net interest receivable of #7,000
(2005: payable of #94,000).
Group profit for the year after tax was up 19.5 per cent to #1,661,000 (2005:
#1,390,000) equivalent to earnings of 3.3p per share (2005: 2.9p per share), an
increase of 15.6 per cent.
Net funds in hand at 31 December 2006 decreased to #1,418,000 compared with
total net funds in hand at 30 June 2006 of #4,682,000. This is after taking into
account the cash impact, net of cash acquired, of #2,587,000 expended on the
acquisition of Asta Development in December 2006.
Dividends
The Board has declared an interim dividend of 0.70p per share (2005: 0.60p per
share), an increase of 16.7 per cent, which will be paid on 13 April 2007 to
shareholders on the Register on 23 March 2007.
The interim dividend is covered 4.4 times by earnings (2005: 4.8 times).
Review of Business Activities
ELECO BUILDING SYSTEMS
Turnover of our Building Systems operations increased by 6.6 per cent to
#24,951,000 (2005: #23,412,000). The operating profit increased by 17.7 per cent
to #2,685,000 (2005: #2,282,000).
Our Building Systems operations in the UK are involved principally in the
design, manufacture and supply of offsite manufactured building products and
systems in precast concrete, metal and timber. We also provide timber
engineering systems in the UK, Germany and South Africa, involving the supply of
engineering design and CADCAM software, related support services and components
used in the product manufacturing process. Eleco Precast and Eleco Timber
Engineering Systems delivered period on period improvements in performance with
Eleco Building Components' performance being disappointingly behind that of the
equivalent period last year.
Eleco Precast
Continuing demand for its FastBuild Room system for hotels and student
accommodation projects enabled Bell & Webster Concrete to achieve higher
turnover and operating profits in the period. Bell & Webster Concrete's
strengthened management team is working to enhance productivity on the Grantham
manufacturing site as well as exploring opportunities that may lead to
establishing additional production capacity on another site.
Eleco Timber Engineering Systems
Our timber engineering businesses in the UK, Germany and South Africa performed
well in the period under review, with sales activity ahead of the equivalent
period in all regions. Operating profit growth was however held back due to
increased input prices and continuing restrictions in steel availability.
Eleco Building Components
The performance of our roofing and cladding and ElecoFrame(R) businesses were
somewhat adversely affected by workflow continuity issues. These resulted from a
combination of planning delays on projects, for which capacity was reserved in
our works and adverse weather conditions, particularly rain and high winds in
the latter part of the period. Such conditions render installation difficult on
some occasions, impossible on others.
SOFTWARE
Turnover of our Software operations increased by 28.8 per cent to #3,975,000
(2005: #3,087,000) including a first time contribution of #324,000 from Asta
Development. Although the headline operating loss was higher at #442,000 (2005:
#263,000), the operating loss before goodwill amortisation charges was closer to
the previous year at #237,000 (2005: #96,000) including a first year profit
contribution from Asta Development of #66,000. In the equivalent period last
year, we enjoyed the start up benefit from revised arrangements established in
the French and German markets for the distribution of our ArCon(R) software.
As indicated in my last full-year report, we have undertaken a thorough strategic
review of our Visualisation Software businesses and actions have now been taken
with a view to obtaining the desired improvement in their performance. Dan
Naylor has been appointed Chief Executive of our Visualisation Software interests.
ACQUISITION
Asta Development
The major event in the period under review was the acquisition of Asta
Development in December 2006 for a consideration of #7.65 million.
Asta Development is a leading provider of project and resource management
software applications and support services principally to the UK Construction
and Engineering sectors and also to Information Technology and Professional
Services organisations. Its Powerproject software is used by 43 out of the top
50 main contractors in the UK by turnover and by 9 out of the top 10 UK house
builders by turnover. Asta Development is also active in Germany, Holland and
Sweden. It has an experienced management team, led by its Managing Director
Michael McCullen.
Further details of the acquisition are to be found on the Eleco website at
www.eleco.com and in the notes accompanying this statement. Additional
information on Asta Development can be found on its website at www.astadev.com.
Following the acquisition, Michael McCullen has been appointed to the Board of
Eleco as Chief Executive of our construction software interests which comprises
the Asta Development and Consultec construction software brands.
I would like to take this opportunity to welcome all employees of Asta
Development into the Eleco Group and to report that the integration of Asta
Development is progressing well.
OUTLOOK
The level of enquiries received by our offsite building systems businesses
remains strong and our UK order position remains healthy; we have strengthened
considerably our software interests with the acquisition of Asta Development, a
leader in project management software; and the Group maintains its sound
financial position. For these reasons, I remain confident in the prospects for
Eleco going forward.
John Ketteley
EXECUTIVE CHAIRMAN
15 March 2007
Eleco plc
-----------
Consolidated Profit and Loss Account
--------------------------------------
(Unaudited) (Audited)
Half year ended Year ended
31 December 30 June
2006 2005 2006
(Restated) (Restated)
#'000 #'000 #'000
-------------------------------------- ------ -------- --------
Turnover
Continuing operations 28,602 26,499 55,197
Acquisitions 324 - -
-------------------------------------- ------ -------- --------
Total Continuing operations 28,926 26,499 55,197
-------------------------------------- ------ -------- --------
Operating profit
Continuing operations 2,177 2,019 4,474
Acquisitions 66 - -
Impairment of investment - - (358)
-------------------------------- ------ -------- --------
Total Continuing operations 2,243 2,019 4,116
Profit on disposal of tangible fixed - - 476
assets
-------------------------------------- ------ -------- --------
Profit on ordinary activities before
interest and taxation 2,243 2,019 4,592
Net interest receivable/(payable) 28 (91) (114)
Other finance
charges (21) (3) (42)
----------------------------------- ------ -------- --------
Profit on ordinary activities
before taxation 2,250 1,925 4,436
Taxation (589) (535) (1,103)
----------------------------------- ------ -------- --------
Profit for the period 1,661 1,390 3,333
----------------------------------- ------ -------- --------
Earnings per share (Note 3) 3.3p 2.9p 6.8p
Diluted earnings per share (Note 4) 3.2p 2.9p 6.7p
----------------------------------- ------ -------- --------
Notes
1. The interim results, which are unaudited, have been prepared on the basis
of the accounting policies adopted for the year ended 30 June 2006, as set
out in the Company's Annual Report and Accounts, except as described in
note 7 below. These interim accounts do not constitute the Company's
statutory accounts for the period.
2. An interim dividend of 0.70p has been declared and will be payable on 13
April 2007 to shareholders on the Register on 23 March 2007.
3. Based on the profit attributable to shareholders and a weighted average of
50,164,945 ordinary shares (Dec 2005: 48,683,868 and Jun 2006: 48,961,869).
4. Based on the profit attributable to shareholders and a diluted weighted
average of 51,206,595 ordinary shares (Dec 2005: 48,726,345 and Jun 2006:
50,003,519). The dilution is caused by outstanding share options.
5. On 15 December 2006, the Group acquired Asta Group Limited and subsidiaries
for a consideration of #7.65 million. The consideration comprised the
payment of #3,229,871 in cash, satisfied from the Group's existing
resources, the placing of 3,750,000 of new ordinary shares to raise
#3,000,000 and the issue to the vendors of #1,420,129 of new ordinary
shares.
Goodwill on acquisition of #7,305,000 has been capitalised and included
within fixed assets. Cash amounting to #1,382,000 was acquired.
6. The comparative figures for the year ended 30 June 2006 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. The Company has adopted the following accounting standards in the year. The
comparative figures at 31 December 2005 and 30 June 2006 have been
restated.
FRS 20 Share-based payments - requires that the fair value of
equity-settled, share-based payments, determined at the date of the grant,
be expensed over the vesting period based on the Group's estimate of the
options that will eventually vest.
The Group has taken advantage of the transitional provisions of FRS 20 and
has only applied FRS 20 to equity-settled options and awards granted after
7 November 2002 that had not vested on or before 1 July 2006.
The effect of implementing FRS 20 is to increase profit before tax for the
six months ended 31 December 2006 by #25,000 (Dec 2005: #12,000 and the
year ended 30 June 2006 by #57,000) with related decreases in equity.
8. Copies of this interim statement and results, which were approved by the
Board on 14 March 2007 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
2006 2005 2006
(Restated) (Restated)
#'000 #'000 #'000
------------------------------------- ------ -------- -------
Profit for the period 1,661 1,390 3,333
Translation differences on foreign (125) 165 (125)
currency net investments
------------------------------------- ------ -------- -------
Actuarial gain on retirement benefit - - 1,354
scheme
Associated deferred tax on retirement - - (406)
benefit scheme
------------------------------------- ------ -------- -------
Total recognised gains for the period 1,536 1,555 4,156
-------- -------
Prior year adjustment (8)
------------------------------------- ------
Total recognised gains since last annual 1,528
report
---------------------------------- ------
Reconciliation of Movement in Shareholders' Equity
----------------------------------------------------
(Unaudited) (Audited)
Half year ended Year ended
31 December 30 June
2006 2005 2006
(Restated) (Restated)
#'000 #'000 #'000
------------------------------------- ------ -------- --------
Profit for the period 1,661 1,390 3,333
Other recognised (losses)/gains relating (125) 165 823
to the period
Share-based payments net of vesting 79 61 (126)
charge
Increase in own shares held by ESOT - - (52)
Dividends (750) (487) (786)
Proceeds from issue of ordinary shares 4,420 1 324
------------------------------------- ------ -------- --------
Increase in shareholders' equity 5,285 1,130 3,516
------------------------------------- ------ -------- --------
Opening shareholders' equity as 12,210 8,677 8,677
previously reported
Prior year adjustments:
FRS 20 Share-based payments (25) (8) (8)
------------------------------------- ------ -------- --------
Opening shareholders' equity as restated 12,185 8,669 8,669
Increase in shareholders' equity 5,285 1,130 3,516
------------------------------------- ------ -------- --------
Closing shareholders' equity 17,470 9,799 12,185
------------------------------------- ------ -------- --------
Eleco plc
-----------
Summarised Consolidated Balance Sheet
---------------------------------------
(Unaudited) (Audited)
31 December 30 June
2006 2005 2006
(Restated) (Restated)
#'000 #'000 #'000
---------------------------------------- -------- -------- --------
Fixed assets
Intangible assets 12,658 6,217 5,625
Tangible assets 8,431 8,505 8,310
---------------------------------------- -------- -------- --------
21,089 14,722 13,935
---------------------------------------- -------- -------- --------
Current assets
Stocks 3,902 2,433 2,821
Debtors 13,462 9,661 9,891
Cash at bank and in hand 3,089 3,382 6,852
---------------------------------------- -------- -------- --------
20,453 15,476 19,564
Creditors: amounts falling due within one
year (19,668) (14,360) (16,394)
---------------------------------------- -------- -------- --------
Net current assets/(liabilities) 785 1,116 3,170
---------------------------------------- -------- -------- --------
Total assets less current liabilities 21,874 15,838 17,105
Creditors: amounts falling due after more
than one year (473) (1,365) (954)
Provisions for liabilities and charges (509) (210) (425)
---------------------------------------- -------- -------- --------
Net assets excluding retirement
benefit liability 20,892 14,263 15,726
Retirement benefit liability (3,422) (4,464) (3,541)
---------------------------------------- -------- -------- --------
Net assets 17,470 9,799 12,185
---------------------------------------- -------- -------- --------
Capital and reserves
Called up share capital 5,570 4,911 5,033
Share premium account 10,107 6,023 6,024
Merger reserve 367 367 367
Other reserve (102) (50) (102)
Profit and loss account 1,528 (1,452) 863
---------------------------------------- -------- -------- --------
Shareholders' equity 17,470 9,799 12,185
---------------------------------------- -------- -------- --------
Eleco plc
-----------
Consolidated cash flow statement
----------------------------------
(Unaudited) (Audited)
Half year ended Year ended
31 December 30 June
2006 2005 2006
(Restated) (Restated)
#'000 #'000 #'000
---------------------------------------------- -------- -------- --------
Net cash inflow from operating activities 1,372 3,547 7,975
---------------------------------------------- -------- -------- --------
Returns on investment and servicing of
finance
Net interest received/(paid) 28 (96) (119)
---------------------------------------------- -------- -------- --------
Net cash inflow/(outflow) from returns on
investment and servicing of finance 28 (96) (119)
---------------------------------------------- -------- -------- --------
Net cash outflow from taxation (477) (409) (494)
---------------------------------------------- -------- -------- --------
Capital expenditure and financial investment
Purchase of fixed assets (635) (729) (1,384)
Disposal of tangible fixed assets and 11 56 930
investments
Purchase of investment - (37) (29)
---------------------------------------------- -------- -------- --------
Net cash outflow from capital expenditure
and financial investment (624) (710) (483)
---------------------------------------------- -------- -------- --------
Acquisitions and disposals
Purchase of subsidiary undertakings (2,587) (1,092) (1,118)
net of cash acquired
---------------------------------------------- -------- -------- --------
Net cash outflow from acquisitions
and disposals (2,587) (1,092) (1,118)
---------------------------------------------- -------- -------- --------
Equity dividends paid (750) (487) (786)
---------------------------------------------- -------- -------- --------
Net cash (outflow)/inflow before financing (3,038) 753 4,975
---------------------------------------------- -------- -------- --------
Financing
New bank loans - 650 650
Repayment of principal under finance (160) (149) (321)
leases
Repayment of bank loans (445) (445) (885)
Issue of ordinary shares - 1 31
Own shares purchased by Employee Share - - (52)
Ownership Trust
---------------------------------------------- -------- -------- --------
Net cash (outflow)/inflow from financing (605) 57 (577)
---------------------------------------------- -------- -------- --------
(Decrease)/increase in cash in the period (3,643) 810 4,398
---------------------------------------------- -------- -------- --------
Eleco plc
-----------
Consolidated cash flow statement - reconciliations
----------------------------------------------------
Reconciliation of operating profit to net cash flow from operating activities
Continuing
(Unaudited) (Audited)
Half year ended Year ended
31 December 30 June
2006 2005 2006
(Restated) (Restated) (Restated)
#'000 #'000 #'000
-------------------------------------- -------- -------- --------
Operating profit 2,243 2,019 4,116
Depreciation charge 712 699 1,373
Amortisation of intangible assets 301 234 894
Profit on sale of tangible fixed assets (2) (7) (17)
Share-based payments 79 61 167
Retirement benefit liability (191) (95) (139)
Working capital (increase)/decrease (1,770) 636 1,581
-------------------------------------- -------- -------- --------
Net cash inflow from operating activities 1,372 3,547 7,975
-------------------------------------- -------- -------- --------
Reconciliation of net cash flow to movement in net funds
(Unaudited) (Audited)
Half year ended Year ended
31 December 30 June
2006 2005 2006
#'000 #'000 #'000
-------------------------------------- -------- -------- --------
(Decrease)/increase in cash in the period (3,643) 810 4,398
Cash flow from movements in debt and 605 (56) 556
lease financing
-------------------------------------- -------- -------- --------
(Decrease)/increase in net funds (3,038) 754 4,954
resulting from cash flows
New finance leases (51) (220) (414)
Finance lease obligations acquired with (57) - -
subsidiary undertakings
Effects of changes in foreign exchange (118) 87 (34)
rates
-------------------------------------- -------- -------- --------
(Decrease)/increase in net funds (3,264) 621 4,506
Opening net funds 4,682 176 176
-------------------------------------- -------- -------- --------
Closing net funds 1,418 797 4,682
-------------------------------------- -------- -------- --------
Segmental analysis
Group turnover and profits were attributable as follows
External sales
-----------------------------------------------
(Unaudited) (Audited)
Half year ended Year ended
31 December 30 June
2006 2006 2006 2005 2006
Continuing Acquisitions
#'000 #'000 #'000 #'000 #'000
------------------- -------- -------- ------ -------- ---------
Continuing activities
Building systems 24,951 - 24,951 23,412 48,544
Software 3,651 324 3,975 3,087 6,653
------------------- -------- -------- ------ -------- ---------
Total continuing 28,602 324 28,926 26,499 55,197
------------------- -------- -------- ------ -------- ---------
Profit
-----------------------------------------------
(Unaudited) (Audited)
Half year ended Year ended
31 December 30 June
2006 2006 2006 2006 2005 2006
Prior to goodwill Goodwill
Continuing Acquisitions charges (Restated) (Restated)
#'000 #'000 #'000 #'000 #'000 #'000
----------- -------- -------- -------- ------- -------- ---------
Continuing
activities
Building 2,701 - (16) 2,685 2,282 5,418
systems
Software (303) 66 (205) (442) (263) (1,302)
----------- -------- -------- -------- ------- -------- ---------
Total 2,398 66 (221) 2,243 2,019 4,116
continuing
----------- -------- -------- -------- ------- -------- ---------
Profit on
disposal of
tangible
fixed assets - - 476
----------- -------- -------- -------- ------- -------- ---------
Profit before
interest and
taxation 2,243 2,019 4,592
----------- -------- -------- -------- ------- -------- ---------
This information is provided by RNS
The company news service from the London Stock Exchange
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