RNS Number:3082E
Eleco PLC
21 October 2004
21 October 2004
ELECO PLC
The Building Systems and Construction Software Group
PRELIMINARY RESULTS FOR THE YEAR ENDED 30 JUNE 2004
Summary
* Turnover increased by 20.5 per cent. to #44,762,000 (2003: #37,160,000)
* Operating profits on continuing operations increased by 9.8 per cent to
#2,169,000 (2003: #1,975,000) following good second half performance across
Group
* Fully expensed Research and Development increased by 96 per cent. to
#964,000 (2003: #491,000)
* Group profit on ordinary activities after tax for the year was #311,000
(2003: #1,241,000)
* Basic EPS of 0.6p (2003: 2.8p)
* Earnings per share on continuing operations, adjusting for the post-tax
losses of discontinued operations, amounted to 2.8p (2003: 3.0p)
* Increased final dividend of 0.875p per share (2003: 0.85p per share);
Total dividend for year of 1.25p (2003: 1.225p)
* Improved cash flow generation: Net bank and leasing borrowings reduced to
#310,000 (2003: #2,405,000) - with gearing reduced to 2.7 per cent (2003:
20.7%)
John Ketteley, Executive Chairman of Eleco plc, commented:
"There has been an increasing trend for builders to adopt building methods which
employ offsite manufactured products. There is also an increasing incidence in
the use of software by builders and our customers to design, cost, manufacture
and market their products. Eleco is now eminently well placed to meet these
requirements. There are some signs that demand may be weakening in the
construction sector and we also have to deal with rises in steel and cement
prices as we go forward. Nevertheless, against a background of good cash
generation, the development of new building products and software and the
application of innovative software to design and manufacturing processes, I have
every confidence in our future."
Enquiries to:
John Ketteley, Executive Chairman john@ketteley.com
David Dannhauser, Finance Director david.dannhauser@eleco.com
Eleco plc Tel: 01920 443 830
Tarquin Edwards tarquin.edwards@holbornpr.co.uk
Chris Steele chris.steele@holbornpr.co.uk
Holborn Tel: 020 7929 5599
Chairman's Statement
I am pleased to present my report on your Company's performance for the year
ended 30 June 2004 and on the outlook for the current year.
Group turnover for the year was #44,762,000 (2003: #37,160,000), an increase of
20.5 per cent.
Group operating profit in the second half of the year was #1,715,000 (2003:
#1,038,000). As a consequence of a stronger second half performance, Group
operating profit for the year amounted to #2,169,000 (2003: #1,975,000), an
increase of 9.8 per cent; operating profit from continuing operations was
#2,335,000 (2003: #2,132,000), an increase of 9.5 per cent. Expenditure on
research and development, incurred mainly on software programs for use in the
Group's businesses or for sale to third parties and fully expensed in the year,
rose to #964,000 from #491,000 last year.
The decision to restructure our new media operations was reported in the Interim
Statement. A loss of #996,000, including a goodwill write-off of #766,000, was
incurred on the merger of the operations of Forma Communications in London with
those of Leonardo Internet in Stafford. As a consequence, Group profit on
ordinary activities after tax for the year was #311,000 (2003: #1,241,000) and
earnings per share were lower at 0.6p (2003: 2.8p). Earnings per share on
continuing operations, adjusting for the post-tax losses of discontinued
operations, amounted to 2.8p (2003: 3.0p).
Operating cash flow generation improved significantly during the year to
#4,879,000 (2003: #2,560,000). Net bank and leasing borrowings at 30 June 2004
were reduced to #310,000 (2003: #2,405,000), representing gearing of 2.7 per
cent (2003: 20.7 per cent).
Dividend
The Board has proposed a final dividend of 0.875p per share (2003: 0.85p)
payable on 10 December 2004 to Shareholders on the Register on 26 November 2004.
In doing so, the Board has looked beyond the results of the period and has had
regard to the Group's underlying performance and strong cash generation in the
year of its continuing businesses. The final dividend, if approved by
shareholders, would result in the payment of dividends for the year of 1.25p per
share (2003: 1.225p).
OPERATING REVIEW
Eleco Building Systems
The Eleco Building Systems division continued to make excellent progress during
the year.
Turnover of the division increased by 16.1 per cent to #40,040,000 (2003:
#34,494,000), representing 89.5 per cent of Group turnover. Operating profit
was #3,433,000 (2003: #2,667,000), 28.7 per cent ahead of the previous year.
Operating margins improved to 8.6 per cent from 7.7 per cent.
Eleco Precast
Bell & Webster Concrete completed Phase 2 of the Student Accommodation Project
at Lancaster University and is now working on the design for Phase 3. Other
achievements include a contract to supply the terracing for the prestigious
Coventry Arena Project. Bell & Webster continues to be successful in winning
orders for its FastBuild Rooms product for hotel and student accommodation.
Eleco Building Components
Roofing, Cladding and Panels
SpeedDeck Building Systems performed well in a difficult market. The SpeedZip
(R) brand is now well established and Vitesse(R) panels continue to make
progress. We will shortly be releasing SpeedDeck(R) Designer 3 which will have
the capability to demonstrate technical features in a 3D format provided by our
o2c(R) visualisation software.
Prompt Profiles, which was acquired in March 2004, has fitted very well into our
roofing and cladding activities and we are already benefiting from the synergies
that we anticipated at the time of its acquisition. The relocation of Downer
Cladding Systems operations to Yaxley has also proved beneficial. We now have a
better co-ordinated roofing and cladding business, capable of delivering a
broader range of products and a more comprehensive technical service to our
customers.
Stramit Industries has been concentrating its effort with some success on
establishing ElecoFloor(R), its patented acoustic flooring product for the house
building and apartment markets. Initial orders have already been received from
national builders. It will also be launching later this year a new, patented,
acoustic flooring product for use in conjunction with concrete flooring.
We have also established Eleco Timber Frame as a manufacturer of patented
engineered wall framing components for the house building and apartment markets
using Gang-Nail plates.
Nail-plate Systems
All three nail-plate systems businesses performed well in the year under review.
Gang-Nail Systems recorded another excellent year. The core roof and truss
systems business held its own in the UK in a very competitive market and its
Ecojoist(R) business continued to grow. It also benefited from manufacturing a
significantly increased volume of nail plates for its German affiliate, Eleco
Bauprodukte.
In the latter part of the year Gang-Nail Systems was adversely affected by
sharply higher steel prices although more recently it was able to pass a portion
of these increases on to customers. Steel price pressures and supply problems
are continuing and we are monitoring the situation closely.
During the year, Gang-Nail Systems released GNM@trix, a Windows(R) .Net based
enterprise management software tool. An o2c(R) based 3D visualization tool for
GN Roof and Truss has also been developed and is currently under test.
Eleco Bauprodukte continues to maintain market share in Germany. It has also
been affected by higher steel prices feeding through in recent months but
management has now succeeded in passing a proportion of these on to customers.
International Truss Systems delivered another outstanding performance in the
year under review despite higher steel prices and supply difficulties. The move
to new offices and warehousing facilities has proved very beneficial.
International Truss Systems will shortly be introducing GN Roof and Truss
Windows(R) based software in South Africa to replace its present DOS based
design and engineering software.
Eleco Software
Turnover of the Eleco Software Division was #4,722,000 (2003: #2,666,000), of
which #303,000 came from operations acquired during the year and #215,000 from
the discontinued operations of Forma Communications. The Division made an
operating loss of #1,264,000 (2003: loss #692,000), #166,000 of which related
to discontinued businesses. The operating loss of #1,098,000 of the continuing
software businesses is arrived at after charging goodwill amortisation of
#260,000 and expenditure of #550,000 on development of existing and new software
programs. A significant proportion of this expenditure is in respect of
programs that have not yet been launched or are at an early stage in the
marketing process.
Some progress was made during the year on migrating Consultec programs to
international markets but this has been taking longer than we had anticipated at
the time of Consultec's acquisition. Nevertheless, Consultec's leading stair
design software, StairCon(R) was launched in the UK earlier this year and more
recently in the US market. Consultec is also assessing marketing strategies for
this program in Germany and Poland. Consultec UK's Whole House Engineering
program, developed by Consultec System, is also nearing completion and is at
final testing phase.
Eleco Software GmbH was acquired on 1 July 2003. It owns the copyright of ArCon
(R) and is primarily responsible for the marketing of ArCon and o2c products
worldwide. The assets of Online Warehouse, which markets ArCon and o2c in the UK
were purchased in April 2004. ArCon and o2c are architectural visualization and
3D compression software tools widely used in Germany.
I am pleased to report that this software was used to produce a 3D version of a
Technical Manual for Ecojoist, which went on to win the "Best Technical
Information Support Award", sponsored by the Timber Research and Development
Association (TRADA), at the recent Timber Trades Journal Awards.
We have also supported the start up of Esign GmbH, a company that has developed
specialised product catalogue management software and introduced the system to
the wood flooring industry in Germany and Poland.
The logic behind our investments in the creation of a strong capability in
software is that the strategy would support the manufacturing businesses of the
Group and also provide opportunities to develop profitable external sales.
During the past year, the aim has been (i) to resolve some outstanding issues in
relation to the sale of rights to use certain of the recently acquired products;
(ii) to develop markets for concepts such as Consultec's stair design package,
the architectural visualisation support products of ArCon and o2c and the Esign
catalogue management system; and (iii) to establish the basis for increased
profit and cash generation in the future.
Management and Employees
The number of employees of Eleco has increased to reflect the growth in our
businesses acquired during the year. I welcome our new colleagues and I would
also like to thank all Eleco employees for their contribution.
Mats Lovgren, who was appointed a director earlier this year, will step down
from the Board at the end of the Annual General Meeting. We would like to thank
him for his contribution. He continues as Non Executive Chairman of Consultec
Group AB.
Organisation
On 1 July 2004, all our UK manufacturing operations other than Eleco Precast,
have been brought together as Eleco Building Components.
Paul Taylor was appointed Chief Executive of Eleco Building Components on 1 July
2004. Fred Newby will continue as Chief Executive of Eleco Precast.
Outlook
All our Building Systems operations in the UK, Germany and South Africa have
made a good start to the year. The Structural Precast business experienced a
slow start but should now pick up once confirmation of the major order for Phase
3 of the Lancaster University Student Accommodation project is received and
works can begin. We have more major precast projects under consideration for
the latter part of the year.
Our Software businesses have made a better start to the year, although
expenditure on development of new and existing programs continues to exceed
profit on sales of current programs. Over the course of the next year, I expect
an improvement in performance as development spending falls and the new products
are introduced to the market.
There has been an increasing trend for builders to adopt building methods which
employ offsite manufactured products. There is also an increasing incidence in
the use of software by builders and our customers to design, cost, manufacture
and market their products. Eleco is now eminently well placed to meet these
requirements. There are some signs that demand may be weakening in the
construction sector and we also have to deal with rises in steel and cement
prices as we go forward. Nevertheless against a background of good cash
generation, the development of new building products and software and the
application of innovative software to design and manufacturing processes, I have
every confidence in our future.
John Ketteley
EXECUTIVE CHAIRMAN
21 October 2004
Eleco plc
Consolidated Profit and Loss Account (Unaudited)
For the year ended 30 June 2004
Notes 2004 2003
#'000 #'000
Turnover
Continuing operations 3 43,981 37,160
Acquisitions 3 566 -
44,547 37,160
Discontinued operations 215 -
Turnover 44,762 37,160
Operating profit
Continuing operations 3 2,578 2,132
Acquisitions 3 (243) -
2,335 2,132
Discontinued operations 3 (166) (157)
Operating profit 2,169 1,975
Loss on termination of discontinued operations (996) -
Loss on disposal of tangible fixed assets of continuing operations - (33)
Profit on ordinary activities before interest 1,173 1,942
Net interest payable (237) (86)
Profit on ordinary activities before taxation 936 1,856
Taxation (625) (615)
Profit for the financial year 311 1,241
Dividends 4 (611) (571)
Retained (loss)/profit (300) 670
Dividends per share 4 1.25p 1.225p
Basic earnings per ordinary 10p share 5 0.6p 2.8p
Diluted earnings per ordinary 10p share 6 0.6p 2.8p
Earnings per ordinary 10p share on continuing operations 5 2.8p 3.0p
Reconciliation of Movement in Equity Shareholders' Funds (Unaudited)
for the year ended 30 June 2004
2004 2003
(restated)
#'000 #'000
Profit for the financial year as reported 311 1,241
Other recognised profits relating to the year 47 221
LTIP amortisation expense 175 99
Increase in own shares held by ESOT (45) (39)
Dividends (611) (571)
Proceeds from issue of ordinary shares 68 45
Issue of ordinary shares on acquisition of subsidiary undertakings - 1,455
(Decrease)/increase in equity shareholders' funds (55) 2,451
Opening equity shareholders' funds as reported 11,636 9,247
Restatement - (62)
Opening equity shareholders' funds 11,636 9,185
Closing equity shareholders' funds 11,581 11,636
Eleco plc
Summarised Consolidated Balance Sheet (Unaudited)
at 30 June 2004
2004 2003
(restated)
#'000 #'000
Fixed assets 14,481 14,075
Current assets
Stocks 2,370 1,864
Debtors 9,140 8,704
Cash at bank and in hand 2,490 2,334
14,000 12,902
Creditors: amounts falling due within one year (13,628) (13,018)
Net current assets/(liabilities) 372 (116)
Total assets less current liabilities 14,853 13,959
Creditors: amounts falling due after more than one year (2,859) (1,939)
Provisions for liabilities and charges (413) (384)
Net assets 11,581 11,636
Capital and reserves
Called up share capital 4,910 4,879
Share premium account 6,020 5,983
Merger reserve 367 367
Other reserve (50) (182)
Profit and loss account 334 589
Equity shareholders' funds 11,581 11,636
Eleco plc
Consolidated Cash Flow Statement (Unaudited)
for the year ended 30 June 2004
Notes 2004 2003
#'000 #'000
Net cash inflow from continuing operations 10 5,205 2,582
Net cash outflow from discontinued operations 10 (326) (22)
Net cash inflow from operating activities 10 4,879 2,560
Returns on investment and servicing of finance
Interest received 130 133
Interest paid (342) (199)
Interest element of finance lease rentals (22) (23)
Net cash outflow from returns on investment and servicing of finance (234) (89)
Net cash outflow from taxation (773) (632)
Capital expenditure and financial investment
Purchase of fixed assets (1,259) (1,457)
Disposal of tangible fixed assets 103 22
Purchase of investments (154) (369)
Sale of investments - 73
Net cash outflow from capital expenditure and financial investment (1,310) (1,731)
Acquisitions and disposals
Purchase of subsidiary undertakings 7,8 (363) (3,763)
Cash acquired with subsidiary undertakings 7,8 735 1,380
Net cash inflow/(outflow) from acquisitions and disposals 372 (2,383)
Equity dividends paid (597) (497)
Net cash inflow/(outflow) before financing 2,337 (2,772)
Financing
New bank loans 500 1,000
Repayment of principal under finance leases (225) (246)
Repayment of bank loans (685) (551)
Issue of ordinary shares 68 45
Own shares purchased by Employee Share Ownership Trust (45) (39)
Net cash (outflow)/inflow from financing (387) 209
Increase/(decrease) in cash in the year 11 1,950 (2,563)
Eleco plc
Notes
1. The financial information in this announcement does not constitute
statutory accounts within the meaning of section 240 of the Companies Act
1985. Statutory accounts of the Company, on which the Auditors will report,
will be delivered to the Registrar of Companies and posted to shareholders
on 26 October 2004. The comparative figures for the year to 30 June 2003
have been taken from, but do not constitute, the Company's statutory
financial statements for that financial year. Those financial statements
have been reported on by the Auditors and delivered to the Registrar of
Companies. The Report of the Auditors was unqualified and did not contain a
statement under s237(2) or (3) of the Companies Act 1985.
2. The information herein has been prepared on the basis of the accounting
policies adopted for the year ended 30 June 2004, as set out in the
Company's Annual Report and Accounts, including the adoption of UITF 38 -
Accounting for ESOP Trusts
3. Turnover and Segmental analysis
Group turnover and profits were attributable as follows
Turnover Operating profit/(loss)
2004 2004 2004 2003 2004 2004 2004 2003
Continuing Acquisitions Continuing Acquisitions
#'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000
Continuing operations
Building Systems 39,777 263 40,040 34,494 3,358 75 3,433 2,667
Software Systems 4,204 303 4,507 2,171 (780) (318) (1,098) (535)
Total continuing 43,981 566 44,547 36,665 2,578 (243) 2,335 2,132
Discontinued operations
Software Systems 215 495 (166) (157)
Total discontinued 215 495 (166) (157)
Total 44,762 37,160 2,169 1,975
4. A dividend of #185,000 (0.375p per share) was declared at the interim
stage. A final dividend representing 0.875p per share is being proposed
and, if approved at the Annual General Meeting, will be payable on 10
December 2004 to shareholders on the register on 26 November 2004.
5. The calculation of basic earnings per share is based on the profit
attributable to equity shareholders of #311,000 (2003: #1,241,000) and on
48,350,144 ordinary shares (2003: 44,326,775), being the weighted average
number of ordinary shares in issue during the year.
The calculation of earnings per share from continuing operations, which
gives a clearer guide to the underlying performance in the period, is based
upon the profit attributable to members of #1,354,000 (2003: #1,351,000)
and on 48,350,144 (2003: 44,326,775) ordinary shares, being the weighted
average number of ordinary shares in issue during the year.
6. The calculation of diluted earnings per share is based on the profit
attributable to equity shareholders of #311,000 (2003: #1,241,000) and a
diluted weighted average of 48,417,491 ordinary shares (2003: 44,571,887).
7. On 1 July 2003, the Company acquired the entire issued share capital of
Eleco Software GmbH (formerly Softhold GmbH) for a total consideration,
including acquisition expenses and the matter referred to below, of
#456,000.
Under a software licence agreement with Eleco Software GmbH, Eleco plc
acquired on 5 May 2003 certain limited rights to the Arcon software of
Eleco Software GmbH at a cost of #187,000, the receipt of which was
included within the reserves of Eleco Software GmbH at the date of
acquisition. The Directors consider that, in view of the fact that the
relevant rights are not rights acquired from a third party to the Group,
the #187,000 paid represents in substance an increase in the effective
price paid to acquire the 100% shareholding in Eleco Software GmbH.
Accordingly in the consolidated accounts, the amount has been included as
part of the consideration paid and the goodwill increased.
Goodwill on acquisition of #396,000 has been capitalized and included
within fixed assets. #456,000 of the total consideration, including
expenses and the #187,000 referred to above, was paid in cash and #13,000
cash was acquired.
8. On 18 March 2004, the Company acquired the entire issued share capital of
RB Fabrications (Norwich) Limited, the holding company of Prompt Profiles
Limited, for a total consideration, including acquisition expenses, of
#1,269,000.
Goodwill on acquisition of #313,000 has been capitalised and included
within fixed assets. #94,000 of the total consideration, including
expenses, was paid in cash, the balance being settled by the issue of
secured loan notes to the value of #1,175,000. #722,000 cash was acquired.
9. Post balance sheet events
On 1 July 2004, the Group acquired the entire issued share capital of Ten
Data AB, together with the business and assets of Ten Win AB, both
companies being sellers of software in Sweden, for a cash consideration of
#249,000.
10. Reconciliation of operating profit to net cash flow from operating activities
Continuing Discontinued
2004 2003 2004 2003
#'000 #'000 #'000 #'000
Operating profit 2,335 2,132 (166) (157)
Termination costs and losses - - (230) -
Depreciation charge 1,249 1,112 20 14
Amortisation of intangible assets 352 166 - -
Amortisation of LTIP awards 175 99 - -
(Profit)/loss on sale of fixed assets (2) (12) 8 -
Working capital decrease/(increase) 1,096 (915) 42 121
5,205 2,582 (326) (22)
11. Reconciliation of net cash flow to movement in net debt
2004 2003
#'000 #'000
Increase/(decrease) in cash in the year 1,950 (2,563)
Cash flow from movements in debt and lease financing 410 (203)
Increase/(decrease) in net debt resulting from cash flows 2,360 (2,766)
Other non-cash items:
New finance leases (281) (173)
Finance lease obligations acquired with subsidiaries - (144)
Effects of changes in foreign exchange rates 16 214
Decrease/(increase) in net debt in the year 2,095 (2,869)
Opening net (debt)/funds (2,405) 464
Closing net (debt) (310) (2,405)
12. The Annual General Meeting of Eleco plc will be held at The London Capital
Club, 15 Abchurch Lane, London EC4N 7BB at 12:00 noon on 17 November 2004.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR QKKKPCBDDFKB
Eleco Public (LSE:ELCO)
Historical Stock Chart
From Jun 2024 to Jul 2024
Eleco Public (LSE:ELCO)
Historical Stock Chart
From Jul 2023 to Jul 2024
