TIDMETQ
RNS Number : 6764D
Energy Technique PLC
02 February 2015
ENERGY TECHNIQUE PLC
("The Company")
TRADING UPDATE FOR NINE MONTHS ENDED 31 DECEMBER 2014
The Board is pleased to announce its unaudited trading results
for the nine months ended 31 December 2014, continuing the profit
improvement reported for the half-year ended 30 September 2014.
Sales for the nine months ended 31 December 2014 increased by 16%
over the corresponding period to GBP8.14 million (GBP7.04 million),
producing a substantial improvement in both operating profit of
Diffusion to GBP858,000 (2013: GBP605,000) and of group profit
before tax to GBP582,000 (GBP414,000). This represents another
solid set of trading results ahead of management's
expectations.
Period ended: 31 December 31 December 31 March
2014 2013 2014
9 months 9 months Year
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
------------------- ------------ ------------ ---------
Sales 8,137 7,039 9,565
Operating profit:
------------------- ------------ ------------ ---------
Diffusion 858 605 906
Central costs (247) (146) (210)
------------------- ------------ ------------ ---------
611 459 696
Finance costs (29) (45) (47)
------------------- ------------ ------------ ---------
Profit before tax 582 414 649
Income tax charge (122) (86) (143)
------------------- ------------ ------------ ---------
Profit after tax 460 328 506
------------------- ------------ ------------ ---------
Financial performance
Fan coils generated the sales growth achieved in the nine months
ended 31 December 2014, increasing by 19% to GBP6.57 million (2013:
GBP5.52 million), attributed to a combination of improving UK fan
coil market conditions and to Diffusion's premium branded product
offering. Sales of the smaller commercial heating range remained at
substantially the same level as the corresponding period at GBP1.18
million (2013: GBP1.24 million).
Diffusion's relatively high operational gearing resulted in
sales increases flowing substantially through to bottom line
operating profit. Diffusion's operating profit increased by 42% to
GBP858,000 (2013: GBP605,000), representing an improved operating
profit margin of 10.5% (2013: 8.6%). Despite market pressures,
overall selling contribution margins remained stable due to
continued lean manufacturing methods.
Group profit before tax increased by 41% to GBP582,000 (2013:
GBP414,000) after charging Central costs of GBP247,000 (2013:
GBP146,000) and reduced interest of GBP29,000 (2013: GBP45,000).
Central costs are higher than the corresponding period, because of
the inclusion of GBP70,000 of non-recurring costs incurred in
pursuing franchisees in overseas territories.
Diffusion fan coils were supplied into continuing phases of all
three of the current London skyline developments of the Shard,
Cheesegrater and Walkie-Talkie, together with the high-end
residential project at Riverlight. In total, fan coils were
supplied into over 250 different projects during the period,
including other large commercial developments at London Bridge
Place, Hyde Park Hayes, 207-211 Old Street, American Express and
Park House, together with high-end residential developments at No.1
Tower Bridge and Holland Green.
Net assets and cash
Group net assets at 31 December 2014 amounted to GBP1.97 million
(31 March 2014: GBP1.59 million), with net cash of GBP752,000 (31
March 2014: GBP873,000). The cash position at 31 December 2014 was
abnormally low due to a short term seasonal increase in working
capital, subsequently reversed in January. The cash position at 28
January 2015 had increased to GBP1.19 million. The Company has now
generated sufficient cash to operate without its invoice finance
facility to cover short term working capital variations, and as a
consequence, future costs are expected to be avoided by suspending
this facility.
Franchise development
The Board is pursuing the granting of franchises in overseas
territories, where franchisees can capitalise on Diffusion's strong
brand name, product innovation and engineering excellence. As
announced on 18 December 2014, heads of terms were reached with
Unico Inc of St Louis Missouri for that company to manufacture and
distribute Diffusion fan coils in the USA, Canadian and Caribbean
markets. In addition, Diffusion is to be appointed Unico's main
sales representative in the UK for Unico's small duct high velocity
heating and cooling systems. The respective legal agreements are
currently being prepared.
Further franchise discussions are taking place with a company
operating in the Middle East.
Outlook year ending 31 March 2015
Fan coils are expected to continue to be the sales driver for
the remainder of the current financial year ending 31 March 2015.
The UK fan coil market is more buoyant and Diffusion is well placed
to continue to benefit from this, with its ECO 270 range of energy
efficient fan coils. Fan coil enquiries remain high and the order
book is strong. In the absence of any material deferment of
projects scheduled for delivery in February and March 2015, the
Board anticipates sales for the year ending 31 March 2015 will show
at least 10% growth on the prior year.
For further information:
Walter Goldsmith Chairman 020 8783 0033
Leigh Stimpson Managing director 020 8783 0033
Ed Frisby finnCap Limited (Nominated Adviser) 020 7220 0500
NOTES TO EDITORS
With over 50 years in the Heating & Ventilation ("HVAC")
industry, Energy Technique's operating company Diffusion, is one of
the oldest and most established manufacturers of HVAC products in
the UK. Diffusion is a market leader in the manufacture of premium
quality fan coils and commercial heating products. The Diffusion
and Energy Technique brand names are renowned for highly
engineered, quality products, providing leading edge performance
and low energy efficiency, which have been fitted into projects
including No 1 Hyde Park, the Walkie-Talkie, Heathrow T2, Abu Dhabi
Investment Council, the Cheesegrater, the Shard and DeVere
Gardens.
Diffusion has been involved with many challenging and
prestigious projects across a spectrum of sectors including hotels,
commercial offices, retail, schools, hospitals, and residential.
Diffusion has established excellent working relationships with many
blue chip clients including Land Securities, Grosvenor Estates,
Stanhope Properties, Marks & Spencer, Boots, City Inn Hotels,
Sainsbury's and Tesco. All products are designed, developed and
manufactured at Diffusion's 30,000 sq. ft. manufacturing facility
in West Molesey, Surrey, offering the best possible products,
designed specifically to meet customers' bespoke requirements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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