TIDMETQ
RNS Number : 5806Q
Energy Technique PLC
21 October 2011
Energy Technique Plc
("Energy Technique" or the "Company")
Half-Yearly Report
30 September 2011
Headlines
-- Diffusion increased sales by 18% over corresponding half year;
-- Turnaround in Diffusion's operating profits to GBP149,000
from loss of GBP61,000 in corresponding half year;
-- Turnaround in Group profit before tax to GBP65,000 from loss
of GBP359,000 in corresponding half year;
-- Strong balance sheet at 30 September 2011 with net assets of GBP1.42 million;
-- Cash and cash equivalents at 30 September 2011 of GBP38,000;
-- Diffusion has an improved order book with continuing high levels of enquiries.
Chairman's statement
Introduction
I am very pleased to report a turnaround in trading performance
in the half year ended 30 September 2011. Sales increased by 18%
over the corresponding half year and with continued tight
management and control of costs, this produced a return to
profitability for both Diffusion and the Group. This is an
encouraging set of trading results for Diffusion, particularly in
the context of the current downturn in the UK property and
construction market.
Financial performance
Sales in the half year were up 18% on the corresponding half
year at GBP3.29 million (2010: GBP2.78 million), resulting in an
operating profit for Diffusion of GBP149,000, compared with a loss
in the corresponding half year of GBP61,000. Central and plc
related costs were much lower in the current half year at GBP64,000
(2010: GBP144,000), arising from the decision not to replace the
former Group CEO role, leading to a Group operating profit of
GBP85,000 (2010: loss of GBP205,000).
After interest charges of GBP20,000 (2010: GBP20,000), Group
profit before tax was GBP65,000, compared with a loss of GBP359,000
incurred in the corresponding half year.
The trading results of SIAS FM, the Company's former building
services management company sold on 24 March 2011, are included
under Discontinued Operations.
The cash inflow from operating activities before changes in
working capital was GBP121,000. Working capital absorbed GBP239,000
in line with the increase in sales levels and after interest
charges of GBP20,000, cash absorbed by operations was GBP138,000.
The Company remains soundly financed, having a strong balance sheet
at 30 September 2011 with net assets of GBP1.42 million and cash at
bank of GBP388,000, together with a modest draw down of GBP350,000
under its invoice discounting facility.
Diffusion
Diffusion has enjoyed very buoyant trading in the half year
ended 30 September 2011, particularly in the context of the current
downturn in the UK property and construction market. Both fan coils
and commercial heating products experienced strong sales growth in
the half year. Fan coil sales increased by 23% and commercial
heating by 11% over the corresponding half year. A feature of the
current sales cycle is the high volume of refurbishment work and
demand for Diffusion's energy efficient products.
Diffusion has improved its share of the UK fan coil market. The
growth in fan coil sales is testament to Diffusion's quality
products, engineering excellence and continued innovation. During
the half year ended 30 September 2011, Diffusion has worked on many
prestigious developments including the Shard Building, Heathrow T2,
BBC Media City Salford, Hilton Hotels, London Stock Exchange, Tower
42, Google and follow on work in the Middle East. Diffusion first
supplied fan coils into the One Hyde Park residential development
in 2009 and it has built on this success through the Quadrant
residential development.
Diffusion's commercial heating sales have also grown through a
combination of its existing customer base and new customer wins.
The commercial heating range enjoys the same reputation for
engineering quality as Diffusion's fan coils and customers
particularly like the availability of delivery from stock or short
lead times, combined with a specialist bespoke service. End user
customers are all blue chip retailers and hotels and these include
Sainsbury's, Tesco, House of Fraser, TK Maxx, New Look, Primark,
Superdry, the new Westfield Stratford Shopping Centre and Excel
Hotel London.
Current trading
Sales in October are ahead of management's expectations. As I
mentioned in my Chairman's Statement accompanying the 31 March 2011
accounts, Diffusion has market leadership and a high quality
reputation allowing for the successful pursuit of major commercial
projects. With a number of landmark South East projects under
development, we continue to experience high levels of enquiries at
the premium end of the market and an improved order book. Whilst it
is too early to predict the outturn for the remainder of the
current financial year ending 31 March 2012, there is presently
cause for more optimism.
Walter Goldsmith
Chairman
21 October 2011
Contacts:
Energy Technique Plc: 020 8783 0033
Walter Goldsmith, Chairman
Rob Unsworth, Company Secretary
finnCap (Nominated Adviser): 020 7220 0500
Geoff Nash/Ed Frisby
Consolidated statement of comprehensive income
For the six months ended 30 September 2011
6 months 6 months
to to Year to
30 September 30 September 31 March
2011 2010 2011
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
---------------------------------------------- ------------- ------------- ---------
CONTINUING OPERATIONS
Revenue 3,289 2,780 5,786
Cost of sales (2,341) (2,069) (4,297)
---------------------------------------------- ------------- ------------- ---------
Gross profit 948 711 1,489
Distribution costs (662) (656) (1,392)
Administration expenses (201) (260) (466)
Operating profit/(loss)
---------------------------------------------- ------------- ------------- ---------
Before exceptional items 85 (159) (261)
Exceptional items - (46) (108)
---------------------------------------------- ------------- ------------- ---------
85 (205) (369)
Finance costs (net) (20) (20) (27)
---------------------------------------------- ------------- ------------- ---------
Profit/(loss) before taxation 65 (225) (396)
Taxation - - -
---------------------------------------------- ------------- ------------- ---------
Profit/(loss) for the financial period
from Continuing Operations 65 (225) (396)
DISCONTINUED OPERATIONS
Loss attributable to Discontinued Operations - (134) (740)
---------------------------------------------- ------------- ------------- ---------
Total comprehensive income/(loss) for
the period 65 (359) (1,136)
---------------------------------------------- ------------- ------------- ---------
Earnings/(loss) per share:
Basic and diluted 0.20p (1.08)p (3.43)p
Basic and diluted from Continuing Operations 0.20p (0.68)p (1.20)p
---------------------------------------------- ------------- ------------- ---------
There are no other recognised gains or losses other than as
recorded in the consolidated statement of comprehensive income for
the period.
Consolidated statement of financial position
At 30 September 2011
30 September 30 September 31 March
2011 2010 2011
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
--------------------------------------- ------------- ------------- ---------
ASSETS
Non-current assets
Intangible assets 25 387 25
Plant and equipment 294 380 325
Deferred tax asset 305 305 305
Total non-current assets 624 1,072 655
Current assets
Inventories 722 661 745
Trade and other receivables 1,372 1,747 1,137
Cash 388 655 417
Total current assets 2,482 3,063 2,299
Total assets 3,106 4,135 2,954
--------------------------------------- ------------- ------------- ---------
LIABILITIES
Current liabilities
Trade and other payables (1,102) (1,415) (1,143)
Current tax liabilities (164) (233) (150)
Obligations under finance leases (65) (93) (96)
Invoice discounting (350) (192) (189)
Total current liabilities (1,681) (1,933) (1,578)
Non-current liabilities
Obligations under finance leases - (65) (16)
Total liabilities (1,681) (1,998) (1,594)
--------------------------------------- ------------- ------------- ---------
Net assets 1,425 2,137 1,360
--------------------------------------- ------------- ------------- ---------
EQUITY
Equity attributable to equity holders
Issued capital 7,773 7,773 7,773
Other reserves 7,449 7,449 7,449
Retained earnings (13,797) (13,085) (13,862)
--------------------------------------- ------------- ------------- ---------
Total equity 1,425 2,137 1,360
--------------------------------------- ------------- ------------- ---------
Consolidated statement of changes in equity
Share premium Other Retained
Share account reserves Total
capital earnings
GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------------ --------- --------------- --------- --------- --------
Half year ended 30 September
2011 - Unaudited
At 1 April 2011 4,351 3,422 7,449 (13,862) 1,360
Total comprehensive income - - - 65 65
At 30 September 2011 4,351 3,422 7,449 (13,797) 1,425
------------------------------------ --------- --------------- --------- --------- --------
Half year ended 30 September
2010 - Unaudited
At 1 April 2010 4,351 3,422 7,449 (12,726) 2,496
Total comprehensive loss - - - (359) (359)
At 30 September 2010 4,351 3,422 7,449 (13,085) 2,137
------------------------------------ --------- --------------- --------- --------- --------
Year ended 31 March 2011 - Audited
At 1 April 2010 4,351 3,422 7,449 (12,726) 2,496
Total comprehensive loss - - - (1,136) (1,136)
At 31 March 2011 4,351 3,422 7,449 (13,862) 1,360
------------------------------------ --------- --------------- --------- --------- --------
Consolidated cash flow statement
For the six months ended 30 September 2011
6 months 6 months Year to
to to 31 March
30 September 30 September 2011
2011 2010 Audited
Unaudited Unaudited GBP000
GBP000 GBP000
-------------------------------------------- -------------- -------------- ----------
Cash flows from operating activities
Profit/(loss) before taxation 65 (359) (1,136)
Loss on disposal of SIAS FM - - 416
Finance costs (net) 20 20 33
Depreciation 36 37 92
-------------------------------------------- -------------- -------------- ----------
Operating income/(loss) before changes
in working capital 121 (302) (595)
Decrease/(increase) in inventories 23 55 (29)
Increase in trade and other receivables (235) (319) (161)
(Decrease)/increase in trade and other
payables (27) 231 394
-------------------------------------------- -------------- -------------- ----------
Cash absorbed by operations (118) (335) (391)
-------------------------------------------- -------------- -------------- ----------
Finance costs (net) (20) (20) (33)
-------------------------------------------- -------------- -------------- ----------
Net cash absorbed by operating activities (138) (355) (424)
-------------------------------------------- -------------- -------------- ----------
Cash flows from investing activities
Purchase of plant and equipment (5) (25) (26)
Purchase of business and intellectual - (3) -
property
-------------------------------------------- -------------- -------------- ----------
(5) (28) (26)
Disposal of SIAS FM
Consideration - - 23
Costs of disposal - - (9)
Cash in company on disposal - - (136)
Net cash used in investing activities (5) (28) (148)
-------------------------------------------- -------------- -------------- ----------
Cash flows from financing activities
Repayments under hire purchase obligations (47) (45) (91)
-------------------------------------------- -------------- -------------- ----------
Net cash absorbed by financing activities (47) (45) (91)
-------------------------------------------- -------------- -------------- ----------
Net reduction in cash and cash equivalents (190) (428) (663)
Cash and cash equivalents at beginning
of period 228 891 891
Cash and cash equivalents at end of period 38 463 228
-------------------------------------------- -------------- -------------- ----------
Consolidated segmental analysis
For the six months ended 30 September 2011
6 months 6 months
to to Year to
30 September 30 September 31 March
2011 2010 2011
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
------------------------------------------------- ------------- ------------- ---------
CONTINUING OPERATIONS
Revenue
United Kingdom 3,061 2,207 4,957
Middle East 20 382 532
Rest of Europe 208 191 297
------------------------------------------------- ------------- ------------- ---------
3,289 2,780 5,786
------------------------------------------------- ------------- ------------- ---------
Operating profit/(loss)
------------------------------------------------- ------------- ------------- ---------
Diffusion before exceptional items 149 (61) (88)
Exceptional item- bad debt - - (63)
------------------------------------------------- ------------- ------------- ---------
Diffusion after exceptional items 149 (61) (151)
Central and plc costs before exceptional
item (64) (98) (173)
Exceptional item- settlement costs - (46) (45)
------------------------------------------------- ------------- ------------- ---------
Central and plc costs after exceptional
item (64) (144) (218)
------------------------------------------------- ------------- ------------- ---------
Operating profit/(loss) 85 (205) (369)
Interest (net) (20) (20) (27)
------------------------------------------------- ------------- ------------- ---------
Profit/(loss) before tax 65 (225) (396)
Income tax charge - - -
------------------------------------------------- ------------- ------------- ---------
Profit/(loss) for the period on Continuing
Operations 65 (225) (396)
------------------------------------------------- ------------- ------------- ---------
DISCONTINUED OPERATIONS- SIAS FM LIMITED
Revenue - 825 1,709
------------------------------------------------- ------------- ------------- ---------
Operating loss - (134) (734)
Interest charge - - (6)
------------------------------------------------- ------------- ------------- ---------
Loss before tax - (134) (740)
Income tax charge - - -
------------------------------------------------- ------------- ------------- ---------
Loss for the period on Discontinued Operations - (134) (740)
------------------------------------------------- ------------- ------------- ---------
Consolidated revenue 3,289 3,605 7,495
------------------------------------------------- ------------- ------------- ---------
Consolidated profit/(loss) for the period 65 (359) (1,136)
------------------------------------------------- ------------- ------------- ---------
Notes to the consolidated interim report
For the six months ended 30 September 2011
1. GENERAL INFORMATION
Energy Technique Plc ("the Company") is a public limited company
incorporated in the United Kingdom (registration number 13273). The
Company is domiciled in the United Kingdom and its registered
office address is 47 Central Avenue, West Molesey, Surrey KT8 2QZ.
The Company's Ordinary Shares are traded on the AIM market of the
London Stock Exchange.
2. BASIS OF PREPARATION
Energy Technique Plc has adopted International Financial
Reporting Standards ("IFRS") as adopted by the European Union. The
financial statements are presented in sterling and all values are
rounded to the nearest thousand pounds (GBP000) except when
otherwise indicated. The accounting policies and methods of
computation used in the preparation and presentation of this
half-yearly report are in a form consistent with that which will be
adopted in the Company's annual accounts.
3. REPORTING UNDER INTERNATIONAL REPORTING STANDARDS
As permitted, the Company has chosen not to adopt IAS 34
"Interim Financial Statements" in preparing these half-yearly
financial statements and therefore the half-yearly financial
information is not in full compliance with IFRS.
4. EARNINGS/(LOSS) PER SHARE
The earnings/(loss) per share calculations have been arrived at
by reference to the following earnings/(loss) and weighted average
number of shares in issue during the period.
6 months 6 months
to to Year to
30 September 30 September 31 March
2011 2010 2011
Unaudited Unaudited Audited
Pence Pence Pence
Basic and diluted earnings/(loss)
per share
Continuing Operations 0.20 (0.68) (1.20)
Discontinued Operations - (0.40) (2.23)
---------------------------------------- ------------- ------------- -----------
0.20 (1.08) (3.43)
---------------------------------------- ------------- ------------- -----------
GBP000 GBP000 GBP000
---------------------------------------- ------------- ------------- -----------
Profit/(loss) for the financial period
after taxation
Continuing Operations 65 (225) (396)
Discontinued Operations - (134) (740)
---------------------------------------- ------------- ------------- -----------
65 (359) (1,136)
---------------------------------------- ------------- ------------- -----------
No. No. No.
---------------------------------------- ------------- ------------- -----------
Weighted average number of ordinary
shares in issue 33,120,160 33,120,160 33,120,160
---------------------------------------- ------------- ------------- -----------
Weighted average number of ordinary
shares on a diluted basis 33,120,160 33,120,160 33,120,160
---------------------------------------- ------------- ------------- -----------
5. OTHER INFORMATION
The half-yearly financial statements do not constitute statutory
accounts as defined by Section 434 of the Companies Act 2006. It
does not therefore include all the information and disclosures
required in the annual financial statements. The financial
information for the year ended 31 March 2011 has been extracted
from the statutory financial statements for the Company for that
period. These published financial statements prepared in a form
consistent with International Financial Reporting Standards, as
adopted by the European Union, were reported on by the auditors
without qualification or an emphasis of matter reference and did
not include a statement under Section 498(2) or (3) of the
Companies Act 2006 and have been delivered to the Registrar of
Companies.
6. POSTING TO SHAREHOLDERS
In an effort to further reduce costs and in accordance with the
AIM Rules for Companies, this half-yearly report will be announced
on a Regulatory Information Service and published on the Company's
website, www.diffusion-group.co.uk, but it will not be posted to
shareholders.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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