RNS Number:2727T
Eleco PLC
20 March 2002
20 March 2002
ELECO PLC
INTERIM RESULTS FOR THE SIX MONTHS TO
31 DECEMBER 2001
"Eleco back on track"
Enquiries to:
John Ketteley, Executive Chairman Tel: 020 7929 5599 (today)
Eleco plc Tel: 01920 443830 (thereafter)
David Dannhauser, Finance Director Eleco plc Tel: 020 7929 5599 (today)
Tel: 01920 443830 (thereafter)
David Millham/Tarquin Edwards Tel: 020 7929 5599
Holborn
CHAIRMAN'S STATEMENT
Profits before tax in the six months ended 31 December 2001 were in line with
those of the first half last year, cash flow was strong and we entered the
second half with higher order books than at 31 December 2000. We are therefore
pleased to be back on track after the difficult trading conditions that affected
performance in the second half of last year.
Turnover of the continuing businesses in the six months ended 31 December 2001
amounted to £14,210,000 (2000: £13,233,000) an increase of 7.4 per cent. Eleco
Building Systems contributed £13,566,000 (2000: £12,937,000), an increase of 4.9
per cent; Eleco Technology (software development and internet solutions)
contributed £644,000 (2000: £296,000), the increase reflecting the full period
contribution of the businesses acquired in the first half of the last financial
year.
Profits before tax and interest for the continuing businesses amounted to
£653,000 (2000: £657,000). Eleco Building Systems contributed £896,000 (2000:
£984,000), Eleco Technology incurred a profit of £20,000 before £37,000 of
goodwill amortisation charges (2000: profit £102,000) and central Corporate
Costs were considerably lower at £226,000 (2000: £429,000).
After interest charges of £81,000 (2000: £127,000), profits on ordinary
activities before tax for the six months were £572,000 (2000: £567,000). The tax
charge for the period was higher at £144,000, due in part to the inclusion of a
charge for deferred tax on the application of FRS 19 (2000: restated £96,000).
As a consequence, earnings after tax amounted to £428,000 (2000: £471,000)
equivalent to 1.0p per share (2000: 1.2p per share).
Net borrowings decreased by £737,000 in the period and at 31 December 2001
amounted to £1,509,000 (2000: £4,028,000), representing gearing of 17.4 per
cent. (2000: 47.7 per cent.). Capital expenditure in the period amounted to
£311,000 (2000 £324,000).
The Board has declared a dividend of 0.35p per share (2000: 0.35p), which will
be payable on 21 May 2002 to shareholders on the Register on 10 May 2002. The
interim dividend is covered nearly 3.0 times by earnings.
A number of commercial and other developments across the Group are beginning to
have an impact on our business and will grow in importance over the next twelve
months.
Bell & Webster Concrete Ltd
Bell & Webster Concrete received a £5.5 million order from Carillion plc to
supply 1601 FastBuild(R) rooms for The University of Hertfordshire, by far the
largest order ever won by Bell & Webster Concrete. In addition, a further
substantial order for student accommodation has been received for 750 FastBuild
(R) rooms for Essex University at a value of £2.7 million. Delivery of these
orders will begin in the current year with completion in the next financial
year. The expansion of the factory facilities at Grantham, completed in May
2000, provided the increase in capacity necessary to enable Bell & Webster
Concrete to take on such major project opportunities and production has recently
reached record levels of 160m3, equivalent to 384 tonnes of concrete a day.
Bell & Webster Concrete also completed the provision of terracing for the new
stands at Charlton, West Ham, Preston North End and has been approved as a
supplier of pre-cast concrete products to Railtrack.
Speeddeck Building Systems Ltd
SpeedDeck Building Systems also received the largest single order in its
history, for the supply of roofing for the Prologis warehousing complex at
Brackmills, Northampton. The order for approximately £1 million is due for
completion before the end of April, 2002.
SpeedDeck Building Systems' Vitesse(R) composite cladding wall panel system has
been selected for a number of projects and market recognition is increasing.
Stramit Industries Ltd
Stramit Industries experienced a difficult six months principally due to the
loss of a major customer. Steps have been taken by management to reduce costs
and restructure the business in line with the reduced volumes.
Gang-Nail Systems Limited
Gang-Nail Systems introduced further enhancements to its GN Truss and GN Roof
software during the period under review. The latest version has been received
with enthusiasm by truss fabricators and has been a key factor in gaining a
number of new clients.
We continue to be encouraged by the continuing market penetration of the
Ecojoist(R) floor joist system, the design software for which was developed in
conjunction with MBA Computing. Sales in the period under review were
encouragingly ahead of budget.
MBA Computing Ltd
MBA Computing's business was badly affected by deferral of orders for its design
software modules as customers have experienced difficulty in recruiting suitably
trained staff, although demand for its software development services was strong.
MBA Computing has therefore sought to broaden its geographic markets and has
recently received a first export order. The order, for timber frame software was
from Centex Corporation, one of the major house builders in the USA, and we are
proud to be associated with them.
Forma Communications Ltd
Forma Communications enjoyed considerable success in developing its
relationships with a number of major corporations, sports associations and
educational institutions. One such relationship is with Sony Computer
Entertainment Europe for whom Forma Communications has developed a number of
interactive websites for Playstation Games. The latest site, for the Sony
Playstation 2 World Rally Championship Game, www.wrc.com/playstation attracted
some 5,000,000 hits on the first weekend and 47,000 registrations.
The Muzantiks educational website for primary school children will be launched
later this year, in conjunction with Sinfonia 21 and Imperial College, London.
The www.keep-up-to-date.tv website for continuing professional development
developed for Redbus CPD was launched in December 2001 and has been nominated
for a number of awards.
For further information about the products and activities of the Group, I
recommend our website www.elecoplc.co.uk, from where there are links enabling
you to browse the websites of all our Group companies if you so wish. The
websites have been designed and maintained by Forma Communications.
OUTLOOK
At this time last year, I was concerned that the backlog of customers' business
due to the adverse weather conditions in the latter part of 2000 and early in
2001, would adversely affect our own businesses in the second half year. In the
event our customers were unable to make up the backlog and our sales suffered
accordingly. I am pleased to note that this situation has not arisen this year
and our markets have remained relatively stable thus far despite a generally
difficult economic climate. In the absence of unforeseen circumstances, given
the strength of our order books and our sound financial position, I view the
outcome for the second half of the year ending 30 June 2002 with some
confidence.
John Ketteley
Executive Chairman
Eleco plc
Consolidated profit and loss account
(Unaudited) (Audited)
Half year ended Year ended
31 December 30 June
2001 2000 2001
(restated) (restated)
£'000 £'000 £'000
Turnover
Continuing operations 14,210 13,233 25,795
Discontinued operations - 634 1,044
14,210 13,867 26,839
Operating profit
Continuing operations 653 657 1,045
Discontinued operations - 37 10
653 694 1,055
Loss on disposal of discontinued operations - - (177)
Profit on ordinary activities before interest 653 694 878
Net interest payable (81) (127) (249)
Profit on ordinary activities before tax 572 567 629
Tax on ordinary activities (Note 2) (144) (96) (108)
Profit on ordinary activities after tax 428 471 521
Dividend on ordinary shares (Note 3) (142) (143) (412)
Retained profit 286 328 109
Dividends per share 0.35p 0.35p 1.00p
Earnings per share (Note 4) 1.0p 1.2p 1.3p
Diluted earnings per share (Note 5) 1.0p 1.2p 1.3p
Notes
1. The interim results have been prepared on the basis of the accounting policies adopted
for the year ended 30 June 2001, as set out in the Company's Annual Report and Accounts,
except as modified by the adoption of Financial Reporting Standard 19 Deferred Tax
(FRS19).
2. Deferred tax unprovided as at 30 June 2001 has been provided for as required by FRS 19
and included as a prior year adjustment by the restatement of the results for the year
ended 30 June 2001.
The current period effect of the adoption of FRS 19 is to increase the tax charge by
£14,000. The effect is to increase the tax charge by £167,000 for the year ended 30 June
2001, and by £35,000 for the six months ended 31 December 2000. The effect on reserves
and net assets at 30 June 2001 was a decrease of £221,000 and at 31 December 2000 a
decrease of £89,000.
The Group has adopted a policy of not discounting deferred tax assets and liabilities, as
permitted by FRS19.
3. The dividend will be payable on 21 May 2002 to shareholders on the register on 10 May
2002.
4. Based on the profit attributable to shareholders and a weighted average of 41,080,957
ordinary shares (Dec 2000 - 39,047,907 and Jun 2001 - 39,940,305).
5. Based on the profit attributable to shareholders and a diluted weighted average of
41,712,205 ordinary shares (Dec 2000 - 40,113,001 and Jun 2001 - 40,834,667). The
dilution is caused by outstanding share options.
6. The comparative figures for the year ended 30 June 2001 have been taken from but do not
constitute the Company's statutory accounts for that financial year and have been
restated as described in note 2 above. 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 20
March 2002, are available from the registered office of the Company, which is at Eleco
House, 15 Gentlemen's Field, Westmill Road, Ware, Herts SG12 0EF.
Eleco plc
Statement of Total Recognised Gains and Losses
(Unaudited) (Audited)
Half year ended Year ended
31 December 30 June
2001 2000 2001
(restated) (restated)
£'000 £'000 £'000
Profit for the period as reported 428 506 688
Restatement - (35) (167)
Profit for the period as restated 428 471 521
Currency translation differences (159) (31) (43)
on foreign currency net
investments
Total recognised gains for the 269 440 478
period
The cumulative effect of the prior period adjustment on the profit and loss account brought forward at 1 July 2001,
occasioned by the adoption of FRS19, was a reduction of £221,000.
Reconciliation of movement in equity shareholders' funds
(Unaudited) (Audited)
Half year ended Year ended
31 December 30 June
2001 2000 2001
(restated) (restated)
£'000 £'000 £'000
Profit for the period 428 471 521
Dividends (142) (143) (412)
Other recognised losses (159) (31) (43)
Proceeds from issue of ordinary 2 8 362
shares
Issue of ordinary shares on - 646 646
acquisition of subsidiary
undertakings
Net increase in equity 129 951 1,074
shareholders' funds
Opening equity shareholders' 8,561 7,487 7,487
funds (Note 2)
Closing equity shareholders' 8,690 8,438 8,561
funds
Eleco plc
Summarised consolidated balance sheet
(Unaudited) (Audited)
31 December 30 June
2001 2000 2001
(restated) (restated)
£'000 £'000 £'000
Fixed assets 8,539 9,112 8,777
Current assets
Stocks 2,218 2,349 1,825
Debtors 5,688 6,860 6,450
Cash and bank balances 368 572 482
8,274 9,781 8,757
Creditors falling due within one year
Bank loans and overdrafts (456) (2,823) (1,111)
Obligations under finance leases (221) (205) (220)
Other creditors (5,878) (5,766) (5,891)
Net current assets 1,719 987 1,535
Creditors falling due after more than one year
Bank loans (1,038) (1,340) (1,189)
Obligations under finance leases (162) (232) (208)
(1,200) (1,572) (1,397)
Provisions for liabilities and (368) (89) (354)
charges
Net assets 8,690 8,438 8,561
Capital and reserves
Called up share capital 4,260 4,084 4,259
Share premium account 5,049 4,869 5,048
Merger reserve 367 367 367
Profit and loss account (986) (882) (1,113)
Equity shareholders' funds 8,690 8,438 8,561
Eleco plc
Consolidated cash flow statement
(Unaudited) (Audited)
Half year ended Year ended
31 December 30 June
2001 2000 2001
£'000 £'000 £'000
Operating activities
Net cash inflow/(outflow) from 723 (510) 1,913
continuing operating activities
Net cash inflow/(outflow) from - (30) 228
discontinued operating activities
Net cash inflow/(outflow) from
operating activities 723 (540) 2,141
Returns on investment and servicing of finance
Net interest paid (81) (127) (249)
Net cash outflow from returns on investment
and servicing of finance (81) (127) (249)
Taxation 28 (12) (132)
Capital expenditure and financial investment
Decrease/(increase) in loans to 61 - (352)
Employee Share Ownership Trust
Purchase of fixed assets (311) (324) (634)
Sale of tangible fixed assets and 3 4 10
investments
Net cash outflow from capital expenditure and
financial investment (247) (320) (976)
Acquisitions and disposals
Purchase of subsidiary - (713) (713)
undertakings net of cash acquired
Sale of subsidiary undertaking's 767 - (64)
operations
Net cash inflow/(outflow) from acquisitions
and disposals 767 (713) (777)
Equity dividends paid (267) (252) (395)
Net cash inflow/(outflow) before financing 923 (1,964) (388)
Financing
New bank loans - 500 500
Repayment of principal under (118) (111) (250)
finance leases
Repayment of bank loans (151) (122) (273)
Issue of ordinary shares 2 8 362
Net cash (outflow)/inflow from financing (267) 275 339
Increase/(decrease) in cash in the period 656 (1,689) (49)
Eleco plc
Consolidated cash flow statement (continued)
(Unaudited) (Audited)
Half year ended Year ended
31 December 30 June
2001 2000 2001
£'000 £'000 £'000
Reconciliation of operating profit to net
cash flow from operating activities
Operating profit 653 694 1,055
Depreciation charge 552 504 1,074
Amortisation of intangible assets 38 18 47
Profit on sale of fixed assets (2) (1) 11
Working capital increase (518) (1,755) (46)
Net cash inflow/(outflow) from 723 (540) 2,141
operating activities
Reconciliation of net cash flow to movement
in net debt
Increase/(decrease) in cash in the 656 (1,689) (49)
period
Cash outflow/(inflow) from 269 (267) 23
decrease/(increase) in debt and
lease financing
Decrease/(increase) in net debt 925 (1,956) (26)
resulting from cash flows
New finance leases (73) (191) (368)
Finance lease obligations disposed - - 47
of on sale of business
Finance lease obligations acquired - (10) (10)
with subsidiary undertakings
Effects of changes in foreign (115) (14) (32)
exchange rates
Decrease/(increase) in net debt 737 (2,171) (389)
Opening net debt (2,246) (1,857) (1,857)
Closing net debt (1,509) (4,028) (2,246)
Eleco plc
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
2001 2000 2001 2001 2000 2001
£'000 £'000 £'000 £'000 £'000 £'000
Continuing
activities
Building 13,566 12,937 24,957 896 984 1,726
systems
Software 644 296 838 (17) 102 105
systems
Corporate - - - (226) (429) (786)
Total 14,210 13,233 25,795 653 657 1,045
continuing
Discontinued
activities
Rail and marine - 634 1,044 - 37 10
Total - 634 1,044 - 37 10
discontinued
Exceptional - - (177)
losses
Profit before 653 694 878
interest
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