TIDMELCO
RNS Number : 8964N
Eleco PLC
26 February 2009
+-----------------------------------------+----------------------------------------+
| For Immediate Release | 26 February 2009 |
+-----------------------------------------+----------------------------------------+
("Eleco" or the "Group")
The Building Systems and Software Group
Interim Results for the Six Months Ended 31 December 2008
Financial performance
* Turnover amounted to GBP37.2m (H1 2007: GBP39.4m)
* Group operating profit amounted to GBP225,000 (H1 2007: GBP3.5m)
* Profit before tax amounted to GBP270,000 (H1 2007: GBP3.7m)
* Earnings per share of 0.3p (2007: 4.5p)
* Interim dividend of 0.4p per share (H1 2007: 1.0p)
* Net cash at 31 December 2008 amounted to GBP967,000
* Bank Facilities of GBP14.5 million committed up to 2012
Building Systems
* Turnover amounted to GBP31.0m (H1 2007: GBP33.18m)
* Operating profit amounted to GBP278,000 (H1 2007: GBP3.4m)
* Precast Concrete revenue contribution of GBP17.2m (H1 2007: GBP16.5m) following
2007 acquisition of Milbury Systems.
* Improvement in environmental and quality standards; three precast factories
awarded ISO 14,001 certification
* Solid performance from overseas businesses
Software
* Turnover amounted to GBP6.2m (H1 2007: GBP6.17m)
* Overseas revenues for construction software exceeded expectations
* Launch of Grand Designs 3D product range
* New visualisation software launched in US market; initial sales encouraging
John Ketteley, Executive Chairman of Eleco plc, commented:
"The slowdown in the construction sector challenged the Group significantly.
However, in spite of the difficulties encountered, we remain cautiously
optimistic that Group performance will recover towards the end of 2009.
"Order intake for our building systems businesses has recently increased and
renewal revenues for our construction software businesses have been resilient,
reflecting the strength of our product offering. We have committed bank
facilities of GBP14.5m through to 2012, and the business remains financially
sound.
"We will continue to develop our current product offering. However, in the
current economic climate maintaining a financially sound business will remain
our priority."
For further information please contact:
+---------------------------------------------------------+--------------------------------------+
| Eleco plc | Tel: 01920 443 830 |
+---------------------------------------------------------+--------------------------------------+
| John Ketteley, Executive Chairman | http://www.eleco.com |
| john.ketteley@eleco.com | |
| | |
| Fred Newby, Deputy Chairman | |
| fred.newby@eleco.com | |
+---------------------------------------------------------+--------------------------------------+
| David Dannhauser, Finance Director | |
| david.dannhauser@eleco.com | |
+---------------------------------------------------------+--------------------------------------+
| | |
+---------------------------------------------------------+--------------------------------------+
| Collins Stewart Europe Limited | 020 7523 8350 |
+---------------------------------------------------------+--------------------------------------+
| Bruce Garrow | |
+---------------------------------------------------------+--------------------------------------+
| | |
+---------------------------------------------------------+--------------------------------------+
| Buchanan Communications | 020 7466 5000 |
+---------------------------------------------------------+--------------------------------------+
| Tim Anderson / Isabel Podda / Christian Goodbody | |
+---------------------------------------------------------+--------------------------------------+
Chairman's Statement
The six months period ended 31 December 2008 presented significant challenges
for the Group, as the slowdown in the construction sector accelerated in the
face of deteriorating economic and financial conditions that became markedly
more hostile towards the end of the period.
Financial Performance
Revenue in the six months ended 31 December 2008 amounted to GBP37,160,000
(2007: GBP39,351,000), a decrease of 5.6 per cent. over the corresponding period
last year.
Profit from operations for the period amounted to GBP225,000 (2007:
GBP3,507,000), a substantial reduction from that of the corresponding period
last year.
Profit before tax, including net finance income of GBP45,000 (2007: GBP145,000),
was GBP270,000 (2007: GBP3,652,000). Profit after tax for the period was
GBP197,000 (2007: GBP2,572,000).
Net cash at 31 December 2008 amounted to GBP967,000.
The results achieved reflect the increasingly difficult market conditions
throughout the first half of the financial year with the second quarter being
particularly adversely affected. Background funding issues appeared increasingly
to hamper customers' ability to finalise their supply chain arrangements and
project start dates were delayed, which impacted on our scheduled production.
Pressure on selling prices also intensified for two main reasons, namely
customers seeking cost reductions in anticipation of input cost reductions, that
had not necessarily been reflected in actual input costs experienced, and the
effect of intensified competition for the lower level of project opportunities.
Given difficult market conditions and, despite the overall fall in revenues of
5.6 per cent compared with the same period in the previous year, the resilience
of our businesses and the suitability of our products, which lend themselves to
faster and more cost effective construction, have continued to be demonstrated.
The more recent order intake of those of our Building Systems businesses, where
project orders are confirmed some time in advance, have improved from the
average levels achieved over the period as a whole and the renewal revenues of
our Construction Software businesses have been maintained at close to historic
levels.
The net cash outflow in the period reflects in part the impact of the full year
dividend payment and tax settlements in respect of the last financial year's
strong profits. This also included a sustained level in capital investment of
GBP1.60m and a net outflow of GBP3.58m associated with an increase in working
capital. The latter reflects the impact of the reduced scale of activity from
that of the final quarter of the last financial year, principally in the Precast
business, which had been able previously to operate with negative working
capital. Nevertheless, our overall net cash position of GBP0.97m, still
maintained at 31 December 2008, is encouraging in light of general circumstances
prevailing in the marketplace and our liquidity position remains strong given
the Group's committed bank facilities of GBP15.4m, including GBP14.5m which
extend through to 2012 and beyond.
Earnings per share and Dividend
Earnings per share for the period amounted to 0.3p (2007: 4.5p).
The Board has concluded that it would not be appropriate in the prevailing
circumstances to maintain the dividend at recent levels, but nevertheless,
considers that the performance in the period under review as well as
shorter-term prospects justifies a dividend being declared at the interim stage.
Accordingly, it has declared a dividend of 0.4p a share to be paid on 9 April
2009 to shareholders on the register on 20 March 2009. The interim dividend is
covered 0.8 times by earnings (2007: 4.3 times).
Operational Review
BUILDING SYSTEMS
Revenues of the Building Systems operations decreased by 6.7 per cent. to
GBP30,969,000 (2007: GBP33,180,000). Profits from operations declined sharply to
GBP278,000 (2007: GBP3,356,000).
Precast Concrete
Revenues of Precast Concrete GBP17,210,000 compare with GBP16,493,000 in the
comparative period, when Milbury Systems was acquired in November 2007. Revenues
of Bell & Webster Concrete were 22.9 per cent. down period on period. Operating
profits amounted to GBP19,000 (2007: GBP1,965,000).
The main targeted markets for Bell & Webster's Fastbuild rooms are those of new
build hotel and student accommodation. During the period, there has been
considerable experience of project start dates being affected by developers'
funding constraints. However, indicative market demand is still strong evidenced
by the fact that enquiry and tender levels compare favourably with the previous
year. Since the turn of the year there have also been increasingly encouraging
signs that a number of projects are gaining their funding, for which Bell &
Webster has received letters of intent and is well placed to receive orders.
Progress has also been made in addressing the product to the custodial
accommodation market and Bell & Webster is involved in the preliminary stages of
a number of such project opportunities.
Performance at Milbury Systems in the period has been disappointing given its
performance last year following its acquisition in November 2007. While sales to
agricultural markets in the UK have held up, the contraction in the Irish market
as well as a significant reduction in new business secured in the industrial
market resulted in sales activity below that for which the business was
operationally geared. Necessary actions have been taken to remedy this
situation.
Product development activity has been maintained as has work to enhance further
environmental and quality standards at the three precast factories, which have
now received full certification under ISO 14,001. Bell & Webster are also
awaiting the final audit for OHSAS 18001:2007 accreditation which is recognised
as the leading management system standard within the UK.
Other Building Systems
Revenues were down 17.5 per cent. at GBP13,759,000 (2007: 16,687,000). Operating
profits were GBP259,000 (2007: GBP1,391,000)
Roofing, Cladding and Timber Frame
Market conditions for the roofing and cladding companies were very difficult in
the period. Despite enhanced sales resources being applied and the forward order
book being maintained, previous revenue levels could not be upheld as an
increasing rate of insolvencies in the sector impacted on continuity of business
from previously established customer relationships. Operating costs have been
adjusted to suit the prevailing conditions.
Eleco Timber Frame was positioned to service the private residential market and
has been successful in establishing relationships with an increasing number of
developer clients. While the value of commitments received from developers in
terms of Elecoframe being selected as the product and the number and value of
orders and letters of intent has increased in the period, revenues were affected
by the restriction in new start levels almost entirely due to client funding
issues. The business continues to add further project prospects but timing of
the acceleration in its revenues will be dependent on funding becoming
increasingly available to its customers either through increased sales or bank
lending. During the period, sales activity also encompassed the public authority
and social housing and the rate of initial successes has been encouraging.
Timber Engineering Systems
The UK business is predominantly a timber engineering systems provider to the UK
and Irish companies involved in residential housebuilding markets and was
therefore greatly affected by the very significant fall in new housebuilding
activity in the period. However, owing to our business mix, revenues did not
reduce as much as reported overall market falls. Consultec UK, which offers
software applications primarily to the housebuilding sector, has now been merged
with Gang-Nail Systems, which will enable a better integrated portfolio of
products and software and better customer service to be offered to the
intermediate off-site manufacturers in the housebuilding sector.
In Germany, Eleco Bauprodukte has benefited from its strong relationships in the
supermarket sector and performed well at above previous year levels.
In South Africa, International Truss Systems has been affected by the adverse
change in local economic conditions and its market has also been impacted by a
new entrant to that market. Nevertheless, it has performed generally in line
with expectations.
SOFTWARE
Revenues of the Software operations was up slightly at GBP6,191,000 (2007:
GBP6,171,000). A modest operating loss of GBP53,000 compares with the modest
operating profit of GBP151,000 for the comparative period last year.
Construction Software
Total revenues of Asta Development held up well at only 3.1% down on the
comparable period last year as sales of project management software to the main
contractor market in the UK progressively slowed during the period. The number
of new project starts declined and major contractors sought to consolidate their
positions in the market. Operating costs have been reduced to reflect the
slowdown in demand. Encouragingly however, sales to new customers continued at a
steady rate and renewals of annual maintenance agreements remained high and
close to the historical average. Revenues from services were down but remain
strong. Overseas revenues exceeded expectations and accounted for almost 12% of
revenues during the period.
In January 2009, Asta Development GmbH, the distributor partner for Asta
Powerproject in Germany, was acquired which will enable 100% of the revenue
flows from Germany to accrue for the benefit of the Group.
In Sweden, the Consultec companies have shown remarkable resilience to the
downturn. Demand for estimating and planning software and services remain strong
and revenues increased by 4.7% over those of the comparative the period. In
combination with tight control over costs this resulted in an increase in
profits compared with the comparative period in the previous year.
Visualisation Software
Revenues of Visualisation Software were 4.3% below those of the same period last
year. Although the planned launch of our new Grand Designs 3D product range was
materially affected by the disruption in UK consumer software distribution
caused by the Administration in November 2008 of Entertainment UK Limited, a
subsidiary of Woolworth plc, sales are now building in the UK after we
re-launched the product in January 2009 in order to avoid wholesale discounting
of our products prevalent in UK retail sector around the Christmas period. In
January 2009, the international expansion of our consumer business has been
furthered by the launch of a home design software application in the US market.
We have been able to partner with Atari, a well known brand within our target
demographic and initial sales are encouraging. In addition, although the outlook
for the German economy is currently uncertain, we are confident in the
performance of the German businesses for the remaining period.
Management
I am pleased that we have recently been able to announce the appointment of Fred
Newby as Deputy Chairman of Eleco plc and Chief Executive of our UK Building
Systems interests. He has been a major contributor to the development of our
precast concrete businesses since he joined the Group in 1991 and has been
engaged in the construction industry for the whole of his career. He will be
responsible for ensuring greater cohesion and co-ordination of our building
systems offering in the markets we serve.
Outlook
Clearly, the performance of the Group in months to come will be dependent, to a
significant degree, on an improvement in underlying market conditions for our
products and we are well aware that considerable uncertainty in this regard
still exists. Accordingly, during the year so far, steps have been taken to
reduce our short-term production capacity, where we regarded it as prudent to do
so. Some GBP1.6m of overhead cost reductions on an annual basis were also
actioned by the end of the six month period. Opportunities to reduce further
ongoing operating costs have been identified should the outlook for trading
conditions warrant these. However, in light of more recent progress in order
intake we remain cautiously optimistic for an upturn in performance becoming
increasingly apparent in the latter part of our financial year. Our decision to
pay a dividend reflects this optimism. I believe that the Group will benefit
from the strength of its product offering and its comparatively robust financial
position in these difficult markets. I am also confident that in the medium
term, supply side issues will increase the attraction of off-site building
systems and also software which helps reduce delays and enhance collaborative
working in the build process. We will therefore continue to plan and invest
prudently in the development of new products and software to enhance our current
offering while having full regard in present conditions to the overriding need
to maintain our sound financial position.
John Ketteley
EXECUTIVE CHAIRMAN
26 February 2009
Condensed Consolidated Income Statement
+---------+---------+-----+----+---------+-------+-------------+---+-------------+--+-----------+
| | | | | | | | | | |
+---------+---------------+----+---------+-------+-------------+---+-------------+--+-----------+
| | | | | | 6 months to 31 December | | Year to |
| | | | | | | | 30 June |
+---------+---------------+----+---------+-------+-------------------------------+--+-----------+
| | | | | | 2008 | | 2007 | | 2008 |
+---------+---------------+----+---------+-------+-------------+---+-------------+--+-----------+
| | | | | | (unaudited) | | (unaudited) | | |
+---------+---------------+----+---------+-------+-------------+---+-------------+--+-----------+
| | | | | Notes | GBP'000 | | GBP'000 | | GBP'000 |
+---------+---------------+----+---------+-------+-------------+---+-------------+--+-----------+
| Continuing operations | | | | | | | | |
+-------------------------+----+---------+-------+-------------+---+-------------+--+-----------+
| Revenue | | | | 2 | 37,160 | | 39,351 | | 84,909 |
+---------+---------------+----+---------+-------+-------------+---+-------------+--+-----------+
| Cost of sales | | | | (23,896) | | (22,953) | | (46,090) |
+-------------------------+----+---------+-------+-------------+---+-------------+--+-----------+
| Gross profit | | | | 13,264 | | 16,398 | | 38,819 |
+-------------------------+----+---------+-------+-------------+---+-------------+--+-----------+
| | | | | | | | | | |
+---------+---------------+----+---------+-------+-------------+---+-------------+--+-----------+
| Distribution costs | | | | (1,346) | | (1,790) | | (4,087) |
+-------------------------+----+---------+-------+-------------+---+-------------+--+-----------+
| Administrative expenses | | | | (11,693) | | (11,101) | | (26,710) |
+-------------------------+----+---------+-------+-------------+---+-------------+--+-----------+
| Profit from operations | | | 2,3 | 225 | | 3,507 | | 8,022 |
+-------------------------+----+---------+-------+-------------+---+-------------+--+-----------+
| | | | | | | | | | |
+---------+---------------+----+---------+-------+-------------+---+-------------+--+-----------+
| Finance income | | | | 109 | | 210 | | 475 |
+-------------------------+----+---------+-------+-------------+---+-------------+--+-----------+
| Finance cost | | | | (64) | | (65) | | (273) |
+-------------------------+----+---------+-------+-------------+---+-------------+--+-----------+
| Profit before tax | | | | 270 | | 3,652 | | 8,224 |
+-------------------------+----+---------+-------+-------------+---+-------------+--+-----------+
| Tax | | | | | (73) | | (1,080) | | (2,091) |
+---------+---------------+----+---------+-------+-------------+---+-------------+--+-----------+
| Profit for the period | | | 4 | 197 | | 2,572 | | 6,133 |
+-------------------------+----+---------+-------+-------------+---+-------------+--+-----------+
| | | | | | | | | | |
+---------+---------------+----+---------+-------+-------------+---+-------------+--+-----------+
| Attributable to: | | | | | | | | |
+-------------------------+----+---------+-------+-------------+---+-------------+--+-----------+
| Equity holders of the parent | | | 197 | | 2,572 | | 6,133 |
+------------------------------+---------+-------+-------------+---+-------------+--+-----------+
| | | | | | | | | | |
+---------+---------+----------+---------+-------+-------------+---+-------------+--+-----------+
| Earnings per share (EPS) | | | | | | | |
+------------------------------+---------+-------+-------------+---+-------------+--+-----------+
| - basic | | | | 4 | 0.3 | p | 4.5p | | 10.6p |
+---------+---------+----------+---------+-------+-------------+---+-------------+--+-----------+
| - | | | | 4 | 0.3 | p | 4.5p | | 10.6p |
| diluted | | | | | | | | | |
+---------+---------+----------+---------+-------+-------------+---+-------------+--+-----------+
| | | | | | | | | | |
+---------+---------+-----+----+---------+-------+-------------+---+-------------+--+-----------+
Condensed Consolidated Statement of Recognised Income and Expense
+---------+---------+---------+---------+----+---+-------------+--+-------------+--+-----------+
| | | | | | | | | | |
+---------+---------+---------+---------+--------+-------------+--+-------------+--+-----------+
| | | | | | 6 months to 31 December | | Year to |
| | | | | | | | 30 June |
+---------+---------+---------+---------+--------+------------------------------+--+-----------+
| | | | | | 2008 | | 2007 | | 2008 |
+---------+---------+---------+---------+--------+-------------+--+-------------+--+-----------+
| | | | | | (unaudited) | | (unaudited) | | |
+---------+---------+---------+---------+--------+-------------+--+-------------+--+-----------+
| | | | | | GBP'000 | | GBP'000 | | GBP'000 |
+---------+---------+---------+---------+--------+-------------+--+-------------+--+-----------+
| Actuarial loss on retirement benefit | | - | | - | | (3,992) |
| obligation | | | | | | |
+---------------------------------------+--------+-------------+--+-------------+--+-----------+
| Associated deferred tax on retirement benefit | - | | - | | 986 |
| obligation | | | | | |
+------------------------------------------------+-------------+--+-------------+--+-----------+
| Translation differences on foreign currency | 485 | | 144 | | (57) |
| net investments | | | | | |
+------------------------------------------------+-------------+--+-------------+--+-----------+
| Net income/(expense) recognised directly | | 485 | | 144 | | (3,063) |
| in equity | | | | | | |
+--------------------------------------------+---+-------------+--+-------------+--+-----------+
| | | | | | | | | | |
+---------+---------+---------+--------------+---+-------------+--+-------------+--+-----------+
| Profit for the | | | | 197 | | 2,572 | | 6,133 |
| period | | | | | | | | |
+-------------------+---------+--------------+---+-------------+--+-------------+--+-----------+
| Total recognised income and expense for | | 682 | | 2,716 | | 3,070 |
| the period | | | | | | |
+--------------------------------------------+---+-------------+--+-------------+--+-----------+
| | | | | | | | | | |
+---------+---------+---------+--------------+---+-------------+--+-------------+--+-----------+
| Attributable to: | | | | | | | | |
+-------------------+---------+--------------+---+-------------+--+-------------+--+-----------+
| Equity holders of the | | | 682 | | 2,716 | | 3,070 |
| parent | | | | | | | |
+-----------------------------+--------------+---+-------------+--+-------------+--+-----------+
| | | | | | | | | | |
+---------+---------+---------+---------+----+---+-------------+--+-------------+--+-----------+
Condensed Consolidated Balance Sheet
+-------------+---------+-+--------+---------+-------+-------------+--+-------------+--+-------------+
| | | | | | | | | | |
+-------------+---------+----------+---------+-------+-------------+--+-------------+--+-------------+
| | | | | | 31 December | | 30 June |
+-------------+---------+----------+---------+-------+------------------------------+--+-------------+
| | | | | | 2008 | | 2007 | | 2008 |
+-------------+---------+----------+---------+-------+-------------+--+-------------+--+-------------+
| | | | | | (unaudited) | | (unaudited) | | |
+-------------+---------+----------+---------+-------+-------------+--+-------------+--+-------------+
| | | | | Notes | GBP'000 | | GBP'000 | | GBP'000 |
+-------------+---------+----------+---------+-------+-------------+--+-------------+--+-------------+
| Non-current assets | | | | | | | | |
+-----------------------+----------+---------+-------+-------------+--+-------------+--+-------------+
| Goodwill | | | | | 14,183 | | 14,161 | | 14,174 |
+-------------+---------+----------+---------+-------+-------------+--+-------------+--+-------------+
| Other intangible | | | | 3,560 | | 3,629 | | 3,827 |
| assets | | | | | | | | |
+-----------------------+----------+---------+-------+-------------+--+-------------+--+-------------+
| Property, plant and equipment | | | 12,889 | | 11,193 | | 12,175 |
+----------------------------------+---------+-------+-------------+--+-------------+--+-------------+
| Deferred tax assets | | | | 1,881 | | 922 | | 1,969 |
+-------------------------+--------+---------+-------+-------------+--+-------------+--+-------------+
| Total non-current | | | | 32,513 | | 29,905 | | 32,145 |
| assets | | | | | | | | |
+-------------------------+--------+---------+-------+-------------+--+-------------+--+-------------+
| | | | | | | | | | |
+-------------+-----------+--------+---------+-------+-------------+--+-------------+--+-------------+
| Current assets | | | | | | | | |
+-------------------------+--------+---------+-------+-------------+--+-------------+--+-------------+
| Inventories | | | | | 4,724 | | 3,804 | | 4,599 |
+-------------+-----------+--------+---------+-------+-------------+--+-------------+--+-------------+
| Trade and other receivables | | | 13,748 | | 16,417 | | 16,585 |
+----------------------------------+---------+-------+-------------+--+-------------+--+-------------+
| Cash and cash equivalents | | | 5,867 | | 6,589 | | 6,808 |
+----------------------------------+---------+-------+-------------+--+-------------+--+-------------+
| Total current | | | | 24,339 | | 26,810 | | 27,992 |
| assets | | | | | | | | |
+-----------------------+----------+---------+-------+-------------+--+-------------+--+-------------+
| | | | | | | | | | |
+-------------+---------+----------+---------+-------+-------------+--+-------------+--+-------------+
| Total assets | | | | 56,852 | | 56,715 | | 60,137 |
+-----------------------+----------+---------+-------+-------------+--+-------------+--+-------------+
| | | | | | | | | | |
+-------------+---------+----------+---------+-------+-------------+--+-------------+--+-------------+
| Current | | | | | | | | |
| liabilities | | | | | | | | |
+-----------------------+----------+---------+-------+-------------+--+-------------+--+-------------+
| Obligations under finance | | | (364) | | (286) | | (364) |
| leases | | | | | | | |
+----------------------------------+---------+-------+-------------+--+-------------+--+-------------+
| Trade and other payables | | | (10,362) | | (15,078) | | (16,222) |
+----------------------------------+---------+-------+-------------+--+-------------+--+-------------+
| Current tax | | | | (605) | | (1,271) | | (1,687) |
| liabilities | | | | | | | | |
+-----------------------+----------+---------+-------+-------------+--+-------------+--+-------------+
| Accruals and deferred income | | | (6,808) | | (5,436) | | (7,237) |
+----------------------------------+---------+-------+-------------+--+-------------+--+-------------+
| Total current | | | | (18,139) | | (22,071) | | (25,510) |
| liabilities | | | | | | | | |
+-----------------------+----------+---------+-------+-------------+--+-------------+--+-------------+
| | | | | | | | | | |
+-------------+---------+----------+---------+-------+-------------+--+-------------+--+-------------+
| Non-current | | | | | | | | |
| liabilities | | | | | | | | |
+-----------------------+----------+---------+-------+-------------+--+-------------+--+-------------+
| Borrowings | | | | | (4,900) | | (3,800) | | - |
+-------------+---------+----------+---------+-------+-------------+--+-------------+--+-------------+
| Obligations under finance | | | (485) | | (496) | | (596) |
| leases | | | | | | | |
+----------------------------------+---------+-------+-------------+--+-------------+--+-------------+
| Deferred tax | | | | (1,113) | | (1,100) | | (1,110) |
| liabilities | | | | | | | | |
+-----------------------+----------+---------+-------+-------------+--+-------------+--+-------------+
| Provisions for liabilities | | | - | | (60) | | - |
| and charges | | | | | | | |
+----------------------------------+---------+-------+-------------+--+-------------+--+-------------+
| Retirement benefit obligation | | | (6,719) | | (3,242) | | (7,034) |
+----------------------------------+---------+-------+-------------+--+-------------+--+-------------+
| Total non-current liabilities | | | (13,217) | | (8,698) | | (8,740) |
+----------------------------------+---------+-------+-------------+--+-------------+--+-------------+
| | | | | | | | | | |
+-------------+---------+----------+---------+-------+-------------+--+-------------+--+-------------+
| Total liabilities | | | | (31,356) | | (30,769) | | (34,250) |
+-----------------------+----------+---------+-------+-------------+--+-------------+--+-------------+
| | | | | | | | | | |
+-------------+---------+----------+---------+-------+-------------+--+-------------+--+-------------+
| Net | | | | | 25,496 | | 25,946 | | 25,887 |
| assets | | | | | | | | | |
+-------------+---------+----------+---------+-------+-------------+--+-------------+--+-------------+
| | | | | | | | | | |
+-------------+---------+----------+---------+-------+-------------+--+-------------+--+-------------+
| Equity | | | | | | | | | |
+-------------+---------+----------+---------+-------+-------------+--+-------------+--+-------------+
| Share capital | | | | 5,995 | | 5,994 | | 5,995 |
+-----------------------+----------+---------+-------+-------------+--+-------------+--+-------------+
| Share premium | | | | 6,224 | | 6,224 | | 6,224 |
| account | | | | | | | | |
+-----------------------+----------+---------+-------+-------------+--+-------------+--+-------------+
| Merger reserve | | | | 7,371 | | 7,371 | | 7,371 |
+-----------------------+----------+---------+-------+-------------+--+-------------+--+-------------+
| Translation | | | | 274 | | (10) | | (211) |
| reserve | | | | | | | | |
+-----------------------+----------+---------+-------+-------------+--+-------------+--+-------------+
| Other reserve | | | | (321) | | (306) | | (321) |
+-----------------------+----------+---------+-------+-------------+--+-------------+--+-------------+
| Retained earnings | | | | 5,953 | | 6,673 | | 6,829 |
+-----------------------+----------+---------+-------+-------------+--+-------------+--+-------------+
| Equity attributable to | | | 25,496 | | 25,946 | | 25,887 |
| shareholders | | | | | | | |
+----------------------------------+---------+-------+-------------+--+-------------+--+-------------+
| | | | | | | | | | |
+-------------+---------+-+--------+---------+-------+-------------+--+-------------+--+-------------+
Condensed Consolidated Cash Flow Statement
+----------+----------+----------+----------+-------+-------------+--+-------------+--+--------------+
| | | | | | | | | | |
+----------+----------+----------+----------+-------+-------------+--+-------------+--+--------------+
| | | | | | 6 months to 31 December | | Year to 30 |
| | | | | | | | June |
+----------+----------+----------+----------+-------+------------------------------+--+--------------+
| | | | | | 2008 | | 2007 | | 2008 |
+----------+----------+----------+----------+-------+-------------+--+-------------+--+--------------+
| | | | | | (unaudited) | | (unaudited) | | |
+----------+----------+----------+----------+-------+-------------+--+-------------+--+--------------+
| | | | | Notes | GBP'000 | | GBP'000 | | GBP'000 |
+----------+----------+----------+----------+-------+-------------+--+-------------+--+--------------+
| Cash flows from operating activities | | | | | | |
+-------------------------------------------+-------+-------------+--+-------------+--+--------------+
| Profit before interest and tax | | | 225 | | 3,507 | | 8,022 |
+--------------------------------+----------+-------+-------------+--+-------------+--+--------------+
| Depreciation charge | | | | 979 | | 691 | | 1,642 |
+---------------------+----------+----------+-------+-------------+--+-------------+--+--------------+
| Amortisation charge | | | | 287 | | 212 | | 531 |
+---------------------+----------+----------+-------+-------------+--+-------------+--+--------------+
| Profit on sale of property,plant and | | (6) | | (9) | | (37) |
| equipment | | | | | | |
+-------------------------------------------+-------+-------------+--+-------------+--+--------------+
| Amortisation of share-based payments | | 112 | | 91 | | 252 |
+-------------------------------------------+-------+-------------+--+-------------+--+--------------+
| Retirement benefit obligation | | | (204) | | (190) | | (384) |
+--------------------------------+----------+-------+-------------+--+-------------+--+--------------+
| Decrease in | | | | - | | - | | (85) |
| provisions | | | | | | | | |
+---------------------+----------+----------+-------+-------------+--+-------------+--+--------------+
| Cash generated from operations before working | 1,393 | | 4,302 | | 9,941 |
| capital | | | | | |
+---------------------------------------------------+-------------+--+-------------+--+--------------+
| Decrease/(increase) in trade and other | | 3,098 | | (1,251) | | (1,474) |
| receivables | | | | | | |
+-------------------------------------------+-------+-------------+--+-------------+--+--------------+
| (Increase)/decrease in inventories and work in | (81) | | 696 | | (140) |
| progress | | | | | |
+---------------------------------------------------+-------------+--+-------------+--+--------------+
| (Decrease)/increase in trade and other | | (6,641) | | 756 | | 3,584 |
| payables | | | | | | |
+-------------------------------------------+-------+-------------+--+-------------+--+--------------+
| Cash generated from operations | | | (2,231) | | 4,503 | | 11,911 |
+--------------------------------+----------+-------+-------------+--+-------------+--+--------------+
| Interest paid | | | | (105) | | (50) | | (250) |
+---------------------+----------+----------+-------+-------------+--+-------------+--+--------------+
| Interest received | | | | 145 | | 208 | | 388 |
+---------------------+----------+----------+-------+-------------+--+-------------+--+--------------+
| Income tax paid | | | | (1,147) | | (967) | | (1,956) |
+---------------------+----------+----------+-------+-------------+--+-------------+--+--------------+
| Net cash generated from operating | | (3,338) | | 3,694 | | 10,093 |
| activities | | | | | | |
+-------------------------------------------+-------+-------------+--+-------------+--+--------------+
| | | | | | | | | | |
+----------+----------+----------+----------+-------+-------------+--+-------------+--+--------------+
| Net cash used in investing activities | | | | | | |
+-------------------------------------------+-------+-------------+--+-------------+--+--------------+
| Purchase of intangible assets | | | (31) | | (32) | | (70) |
+--------------------------------+----------+-------+-------------+--+-------------+--+--------------+
| Purchase of property, plant and equipment | | (1,559) | | (2,540) | | (3,946) |
+-------------------------------------------+-------+-------------+--+-------------+--+--------------+
| Acquisition of subsidiary undertakings | | - | | (2,912) | | (2,963) |
| net of cash acquired | | | | | | |
+-------------------------------------------+-------+-------------+--+-------------+--+--------------+
| Proceeds from sale of property, plant, | | 34 | | 71 | | 149 |
| equipment and intangible assets | | | | | | |
+-------------------------------------------+-------+-------------+--+-------------+--+--------------+
| Net cash outflow from investing | | (1,556) | | (5,413) | | (6,830) |
| activities | | | | | | |
+-------------------------------------------+-------+-------------+--+-------------+--+--------------+
| | | | | | | | | | |
+----------+----------+----------+----------+-------+-------------+--+-------------+--+--------------+
| Net cash used in financing activities | | | | | | |
+-------------------------------------------+-------+-------------+--+-------------+--+--------------+
| Proceeds from new bank loan | | | 6,600 | | 3,800 | | 4,600 |
+--------------------------------+----------+-------+-------------+--+-------------+--+--------------+
| Repayment of bank loans | | | (1,700) | | (540) | | (5,140) |
+--------------------------------+----------+-------+-------------+--+-------------+--+--------------+
| Repayments of obligations under finance | | (213) | | (178) | | (428) |
| leases | | | | | | |
+-------------------------------------------+-------+-------------+--+-------------+--+--------------+
| Equity dividends | | | | (1,184) | | (974) | | (1,600) |
| paid | | | | | | | | |
+---------------------+----------+----------+-------+-------------+--+-------------+--+--------------+
| Own shares purchased by ESOT | | | - | | - | | (15) |
+--------------------------------+----------+-------+-------------+--+-------------+--+--------------+
| Net cash inflow/(outflow) from financing | 3,503 | | 2,108 | | (2,583) |
| activities | | | | | |
+---------------------------------------------------+-------------+--+-------------+--+--------------+
| | | | | | | | | | |
+----------+----------+----------+----------+-------+-------------+--+-------------+--+--------------+
| Net (decrease)/increase in cash and cash | | (1,391) | | 389 | | 680 |
| equivalents | | | | | | |
+-------------------------------------------+-------+-------------+--+-------------+--+--------------+
| | | | | | | | | | |
+----------+----------+----------+----------+-------+-------------+--+-------------+--+--------------+
| Cash and cash equivalents at beginning of | | 6,808 | | 5,940 | | 5,940 |
| period | | | | | | |
+-------------------------------------------+-------+-------------+--+-------------+--+--------------+
| Effects of changes in foreign exchange | | 450 | | 260 | | 188 |
| rates | | | | | | |
+-------------------------------------------+-------+-------------+--+-------------+--+--------------+
| Cash and cash equivalents at end of | | 5,867 | | 6,589 | | 6,808 |
| period | | | | | | |
+-------------------------------------------+-------+-------------+--+-------------+--+--------------+
| | | | | | | | | | |
+----------+----------+----------+----------+-------+-------------+--+-------------+--+--------------+
Notes to the Condensed Consolidated Interim Financial Statements
1.Basis of preparation
The condensed consolidated interim financial statements for the six months to 31
December 2008 have been prepared in accordance with the accounting policies set
out in the Group's latest annual financial statements for the year ended 30 June
2008. These accounting policies are drawn up in accordance with International
Accounting Standards (IAS) and International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board and as adopted
for use in the European Union that are effective at 31 December 2008.
The condensed consolidated interim financial statements are unaudited and have
not been subject to review. They do not include all the information and
disclosures required in the annual financial statements, and therefore should be
read in conjunction with the Group's annual financial statements as at 30 June
2008.
The financial information presented does not constitute statutory accounts as
defined in section 240 of the Companies Act 1985. The Group's consolidated
financial statements for the year ended 30 June 2008 have been filed and the
audit report was not qualified and did not contain a statement under section
237(2) or section 237(3) of the Companies Act 1985.
Estimates
Application of the Group's accounting policies in preparing consolidated interim
financial statements requires management to make judgements and estimates that
affect the reported amount of assets and liabilities, revenues and expenses.
Actual results may ultimately differ from these estimates.
In preparing these condensed consolidated interim financial statements, the
significant judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the same as those
that applied to the consolidated financial statements for the year ended 30 June
2008.
Risks and uncertainties
A summary of the Group's principal risks and uncertainties was provided on page
10 of the 2008 annual report. In view of recent volatility in financial markets
and changing economic conditions, an update of those risks where circumstances
have changed or evolved in the intervening period is given below. This section
of the interim statement should be read in conjunction with the Chairman's
Statement and the full risk review provided in the Group's 2008 annual report.
UK and Global Economy
The majority of the Group's operations are based in the UK, and the majority of
the Group's sales are made to UK customers, with the remainder mostly to
customers in mainland Europe and South Africa. Any significant change in
economic conditions in these territories, and particularly those that impact the
building and construction sectors, could affect the Group's future revenues and
profits.
Impairment risk
The Group currently has two cash generating units (CGU's), Milbury Systems and
Asta Development, where indicators of impairment under IAS 36 exist. These CGU's
principally manufacture and supply respectively pre-stressed and precast
concrete structural elements and project and resource management software.
Although the Board does not consider that an impairment of assets currently
exists, the position will be monitored carefully in light of further
developments during the second half of this financial year.
Foreign exchange rate risk
The Group is exposed to movements in foreign exchange rates, particularly in
relation to the Euro, the Swedish Krona and the South African Rand. These risks
are mitigated wherever possible by internal hedging between businesses and,
where appropriate external, transaction related forward exchange contracts. Such
hedging can only protect the Group against relatively short term volatility in
exchange rates and not against the translation risk associated with more
structural changes between these currencies and Sterling.
Liquidity risk
The Group has a GBP10 million revolving credit banking facility that remains
committed until 2012 and a GBP4.5 million term loan facility subject to
repayment in instalments by 2016. In addition, the Group recently renewed
overdraft facilities amounting to GBP0.9 million, for the year to 31 August
2009. Total available banking facilities are therefore GBP15.4 million, in
addition to the net cash balances at 31 December 2008 of GBP0.97 million.
Credit risk
As financial conditions have become more challenging, credit risks have
escalated. Credit risks are monitored carefully in all Group businesses and,
where judged to be cost effective, these risks are insured. The Group has a wide
range of customers reflecting the variety of end-user markets served and
customer concentration is not high. This mitigates the Group's exposure to any
one end-market segment or single third party. Credit insurance availability may
become more restricted as insurers seek to reduce their risk exposures in
current economic conditions.
2. Segmental information
+----------------------------+--+---------+----------+----------+-------------+----------+
| 6 months to 31 December 2008 | | | | |
| (unaudited) | | | | |
+-----------------------------------------+----------+----------+-------------+----------+
| | | | | | | |
+----------------------------+--+---------+----------+----------+-------------+----------+
| | | Building Systems | | | |
+----------------------------+--+--------------------+----------+-------------+----------+
| | | Precast | Other | Software | Elimination | Group |
+----------------------------+--+---------+----------+----------+-------------+----------+
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------+--+---------+----------+----------+-------------+----------+
| | | | | | | |
+----------------------------+--+---------+----------+----------+-------------+----------+
| Revenue | | 17,210 | 13,759 | 6,191 | | 37,160 |
+----------------------------+--+---------+----------+----------+-------------+----------+
| Inter-segment revenue | | - | - | 92 | (92) | - |
+----------------------------+--+---------+----------+----------+-------------+----------+
| Total segment revenue | | 17,210 | 13,759 | 6,283 | (92) | 37,160 |
+----------------------------+--+---------+----------+----------+-------------+----------+
| | | | | | | |
+----------------------------+--+---------+----------+----------+-------------+----------+
| Adjusted operating profit | | 112 | 275 | 125 | | 512 |
+----------------------------+--+---------+----------+----------+-------------+----------+
| Amortisation of intangible | | (93) | (16) | (178) | | (287) |
| assets | | | | | | |
+----------------------------+--+---------+----------+----------+-------------+----------+
| Segment operating results | | 19 | 259 | (53) | | 225 |
+----------------------------+--+---------+----------+----------+-------------+----------+
| Unallocated results | | | | | | (28) |
+----------------------------+--+---------+----------+----------+-------------+----------+
| Profit after tax | | | | | | 197 |
+----------------------------+--+---------+----------+----------+-------------+----------+
| | | | | | | |
+----------------------------+--+---------+----------+----------+-------------+----------+
| 6 months to 31 December 2007 | | | | |
| (unaudited) | | | | |
+-----------------------------------------+----------+----------+-------------+----------+
| | | | | | | |
+----------------------------+--+---------+----------+----------+-------------+----------+
| | | Building Systems | | | |
+----------------------------+--+--------------------+----------+-------------+----------+
| | | Precast | Other | Software | Elimination | Group |
+----------------------------+--+---------+----------+----------+-------------+----------+
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------+--+---------+----------+----------+-------------+----------+
| | | | | | | |
+----------------------------+--+---------+----------+----------+-------------+----------+
| Revenue | | 16,493 | 16,687 | 6,171 | | 39,351 |
+----------------------------+--+---------+----------+----------+-------------+----------+
| Inter-segment revenue | | | | 95 | (95) | - |
+----------------------------+--+---------+----------+----------+-------------+----------+
| Total segment revenue | | 16,493 | 16,687 | 6,266 | (95) | 39,351 |
+----------------------------+--+---------+----------+----------+-------------+----------+
| | | | | | | |
+----------------------------+--+---------+----------+----------+-------------+----------+
| Adjusted operating profit | | 2,048 | 1,407 | 380 | | 3,835 |
+----------------------------+--+---------+----------+----------+-------------+----------+
| Acquisition accounting | (83) | - | (33) | | (116) |
| adjustments | | | | | |
+-------------------------------+---------+----------+----------+-------------+----------+
| Amortisation of intangible | | - | (16) | (196) | | (212) |
| assets | | | | | | |
+----------------------------+--+---------+----------+----------+-------------+----------+
| Segment operating results | | 1,965 | 1,391 | 151 | | 3,507 |
+----------------------------+--+---------+----------+----------+-------------+----------+
| Unallocated results | | | | | | (935) |
+----------------------------+--+---------+----------+----------+-------------+----------+
| Profit after tax | | | | | | 2,572 |
+----------------------------+--+---------+----------+----------+-------------+----------+
| | | | | | | |
+----------------------------+--+---------+----------+----------+-------------+----------+
| 12 months to 30 June 2008 | | | | | | |
+----------------------------+--+---------+----------+----------+-------------+----------+
| | | | | | | |
+----------------------------+--+---------+----------+----------+-------------+----------+
| | | Building Systems | | | |
+----------------------------+--+--------------------+----------+-------------+----------+
| | | Precast | Other | Software | Elimination | Group |
+----------------------------+--+---------+----------+----------+-------------+----------+
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------+--+---------+----------+----------+-------------+----------+
| | | | | | | |
+----------------------------+--+---------+----------+----------+-------------+----------+
| Revenue | | 37,864 | 33,554 | 13,491 | | 84,909 |
+----------------------------+--+---------+----------+----------+-------------+----------+
| Inter-segment revenue | | | 29 | 130 | (159) | - |
+----------------------------+--+---------+----------+----------+-------------+----------+
| Total segment revenue | | 37,864 | 33,583 | 13,621 | (159) | 84,909 |
+----------------------------+--+---------+----------+----------+-------------+----------+
| | | | | | | |
+----------------------------+--+---------+----------+----------+-------------+----------+
| Adjusted operating profit | | 4,379 | 3,286 | 1,368 | | 9,033 |
+----------------------------+--+---------+----------+----------+-------------+----------+
| Acquisition accounting | (128) | - | (33) | | (161) |
| adjustments | | | | | |
+-------------------------------+---------+----------+----------+-------------+----------+
| Amortisation of intangible | | (108) | (33) | (390) | | (531) |
| assets | | | | | | |
+----------------------------+--+---------+----------+----------+-------------+----------+
| Segment operating results | | 4,143 | 3,253 | 945 | | 8,341 |
+----------------------------+--+---------+----------+----------+-------------+----------+
| Unallocated results | | | | | | (2,208) |
+----------------------------+--+---------+----------+----------+-------------+----------+
| Profit after tax | | | | | | 6,133 |
+----------------------------+--+---------+----------+----------+-------------+----------+
| | | | | | | |
+----------------------------+--+---------+----------+----------+-------------+----------+
3. Non-recurring items
+----------+----------+----------+----------+----+-------------+--+-------------+--+-----------+
| | | | | | | | | | |
+----------+----------+----------+----------+----+-------------+--+-------------+--+-----------+
| | | | | | 6 months to 31 December | | Year to |
| | | | | | | | 30 June |
+----------+----------+----------+----------+----+------------------------------+--+-----------+
| | | | | | 2008 | | 2007 | | 2008 |
+----------+----------+----------+----------+----+-------------+--+-------------+--+-----------+
| | | | | | (unaudited) | | (unaudited) | | |
+----------+----------+----------+----------+----+-------------+--+-------------+--+-----------+
| | | | | | GBP'000 | | GBP'000 | | GBP'000 |
+----------+----------+----------+----------+----+-------------+--+-------------+--+-----------+
| | | | | | | | | | |
+----------+----------+----------+----------+----+-------------+--+-------------+--+-----------+
| Redundancy costs | | | | 183 | | - | | - |
+---------------------+----------+----------+----+-------------+--+-------------+--+-----------+
| | | | | | 183 | | - | | - |
+----------+----------+----------+----------+----+-------------+--+-------------+--+-----------+
| | | | | | | | | | |
+----------+----------+----------+----------+----+-------------+--+-------------+--+-----------+
The Precast segment incurred GBP159,000 of redundancy costs with GBP19,000 spent
by the Other Building Systems segment and GBP5,000 by Software.
4. Earnings per share
The calculations of the earnings per share are based on the total profit after
tax attributable to ordinary equity shareholders of the Company and the weighted
average number of shares in issue for the reporting period.
+-----------------------------------------+-------------+---+--------------+---+--------------+
| | | | | | |
+-----------------------------------------+-------------+---+--------------+---+--------------+
| | 6 months to 31 December | | Year to |
| | | | 30 June |
+-----------------------------------------+--------------------------------+---+--------------+
| | 2008 | | 2007 | | 2008 |
+-----------------------------------------+-------------+---+--------------+---+--------------+
| | (unaudited) | | (unaudited) | | |
+-----------------------------------------+-------------+---+--------------+---+--------------+
| | | | | | |
+-----------------------------------------+-------------+---+--------------+---+--------------+
| | | | | | |
+-----------------------------------------+-------------+---+--------------+---+--------------+
| Profit after taxation | GBP197,000 | | GBP2,572,000 | | GBP6,133,000 |
+-----------------------------------------+-------------+---+--------------+---+--------------+
| | | | | | |
+-----------------------------------------+-------------+---+--------------+---+--------------+
| Weighted average number of shares in | 59,209,119 | | 56,735,930 | | 57,970,041 |
| issue in the period | | | | | |
+-----------------------------------------+-------------+---+--------------+---+--------------+
| Dilutive effect of share options | 705,000 | | - | | 705,000 |
+-----------------------------------------+-------------+---+--------------+---+--------------+
| Number of shares for diluted earnings | 59,914,119 | | 56,735,930 | | 58,675,041 |
| per share | | | | | |
+-----------------------------------------+-------------+---+--------------+---+--------------+
| | | | | | |
+-----------------------------------------+-------------+---+--------------+---+--------------+
| Basic earnings per share | 0.3 | p | 4.5 | p | 10.6 |
+-----------------------------------------+-------------+---+--------------+---+--------------+
| Diluted earnings per share | 0.3 | p | 4.5 | p | 10.5 |
+-----------------------------------------+-------------+---+--------------+---+--------------+
| | | | | | |
+-----------------------------------------+-------------+---+--------------+---+--------------+
| | | | | | |
+-----------------------------------------+-------------+---+--------------+---+--------------+
5. Dividends
The Directors declared an interim dividend per share of 0.4p (2008: 1.0p) after
the interim balance sheet date, which will be payable on 9 April 2009 to
shareholders on the register on 20 March 2009.
6. Related Party Disclosures
There has been no material change in the nature of the related party
transactions described in the 2008 annual report. Related party information is
disclosed in note 28 and in the Remuneration Report on pages 14 to 18 there of.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR ILFVDFAIEFIA
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