RNS Number:3004I
Eleco PLC
05 March 2003
5 March 2003
ELECO PLC
INTERIM RESULTS FOR THE SIX MONTHS TO
31 DECEMBER 2002
Good progress in difficult markets
Profit before tax up 52%
Enquiries to:
John Ketteley, Executive Chairman Tel: 01920 443 830
Eleco plc john@ketteley.com
David Dannhauser, Finance Director Tel: 01920 443 830
Eleco plc mail@elecoplc.co.uk
Tarquin Edwards/Simon Rothschild Tel: 020 7929 5599
Holborn tarquin.edwards@holbornpr.co.uk
simon.rothschild@holbornpr.co.uk
Change 6 months ended 6 months ended
31 December 2002 31 December 2001
Turnover Up 28 % #18.17m #14.21m
Profit Before Tax Up 52 % #0.87m #0.57m
Earnings per Share Up 31% 1.37p 1.04p
Dividend per Share Up 7% 0.375p 0.35p
Dividend Cover 3.5x 3.0x
* Strong cash generation continues and net cash at 31 December 2002 was
#0.74m, compared with net borrowings at 31 December 2001 of #1.51m
Executive Chairman, John Ketteley, said:
"In the six months ended 31 December 2002, we continued to offer high quality,
innovative products to the building industry together with excellent
construction software programs and state-of-the-art internet solutions. We also
made selective investments in new products and facilities, while having regard
to the need to maintain a sound financial base."
"The recent acquisition of Consultec has given us critical mass in the
construction software market and strengthened the management of our software
interests. These actions have enabled us to make progress in these difficult
market conditions and we will continue to adopt the same approach to our
business in the months ahead."
CHAIRMAN'S STATEMENT
Profits before tax in the six months ended 31 December 2002 at #871,000 were 52
per cent. higher than those of the first half last year and cash flow was again
strong.
Turnover in the six months ended 31 December 2002 amounted to #18,167,000 (2001:
#14,210,000) an increase of 29 per cent. Turnover of Eleco Building Systems was
#17,659,000 (2001: #13,566,000), an increase of 30 per cent., while turnover of
Eleco Software Systems was lower at #508,000 (2001: #644,000).
Operating profits amounted to #937,000 (2001: #653,000). Eleco Building Systems
contributed #1,487,000 (2001: #896,000), 66 per cent. ahead of the same period
last year. Eleco Software Systems incurred a loss of #160,000 (2001: loss
#17,000).
Interest charges were further reduced to #29,000 (2001: #81,000) and profits on
ordinary activities before tax for the six months were #871,000 (2001:
#572,000). Profits after tax amounted to #572,000 (2001: #428,000), giving
earnings per share equivalent to 1.37p (2001: 1.04p per share).
As a result of the strong operating cash flow, net cash balances increased
during the period by #278,000 despite expenditure on tangible and intangible
assets and other investments in the period amounting to #1,271,000. Net cash at
31 December 2002 amounted to #742,000 (2001: net borrowings #1,509,000).
The Board has declared an interim dividend of 0.375p per share (2001: 0.35p),
which will be payable on 4 April 2003 to shareholders on the Register on 24
March 2003. The interim dividend is covered 3.5 times by earnings.
Eleco Building Systems
Structural Precast Concrete
Bell & Webster Concrete successfully completed the contract, which was well
advanced at the last financial year-end, for the provision of 1,601 Fastbuild(R)
rooms for student accommodation to the University of Hertfordshire. Good
progress was made on the contract for the supply of student accommodation to the
University of Essex. Further opportunities are currently being progressed for
the supply of Fastbuild(R) rooms for projects in the higher education sector and
for the Ministry of Defence.
Considerable interest was generated by Bell & Webster Concrete in its new
precast railway platform products at the Railtex Exhibition in November 2002 and
I am pleased to report that it has subsequently received an order for
approximately #750,000. Demand for retaining walls and ground beams were
somewhat lower and orders for terracing were affected by the financial problems
currently being experienced by some football clubs. However, overall Bell &
Webster Concrete achieved an increase of 110% on sales in the same period last
year.
A further expansion of product storage facilities at the Grantham site was also
completed in the period.
Roofing, Cladding and Panels
Although SpeedDeck Building Systems processed a similar number of roofing orders
in the period, the lack of larger orders, reflecting activity in the commercial
and industrial building sector, resulted in turnover from roofing being 26%
below that of the corresponding period last year and in significantly reduced
profits. This shortfall was partially offset by increased sales of Vitesse(R)
composite wall panels and the number of projects for which Vitesse(R) was
specified showed an encouraging increase in the period.
During the period under review, an additional mobile rollformer was purchased to
produce SpeedZip(R), a new standing seam roofing profile to complement the
existing SpeedDeck(R) secret-fix product. I am pleased to report that the first
SpeedZip(R) orders have already been delivered. The introduction of SpeedZip(R)
into the product range should improve SpeedDeck Building Systems' ability to
generate business in the continuing difficult conditions in the roofing market.
I am pleased to report that Downer Cladding Systems made an excellent
contribution in the period under review and continues the good progress made
following its acquisition in May 2002.
The restructuring of the Stramit Industries has delivered the benefits
anticipated in my last statement and Stramit Industries returned to profit in
the period and at a higher level than the corresponding period last year,
despite a small decline in sales.
Timber Engineering
Gang-Nail Systems produced an excellent performance in the first six months. The
Gang-Nail Roof and Truss software is now being used by an increasing proportion
of customers and is currently being evaluated by an increasing number of
prospective customers.
Ecojoist(R) continues to make excellent progress, increasing the number of
customers using the system and record sales were achieved in the period.
Gang-Nail Systems continued to benefit from the manufacture of connector plates
supplied to customers of Eleco Bauprodukte, although the results of the latter
itself continued to be adversely affected by intense competition in the
depressed German market.
International Truss Systems made an excellent contribution against the
background of a generally buoyant South African market. The move to larger, more
modern facilities with its own warehousing has been an important factor in
enabling International Truss Systems to service an increase in sales of 45% over
the corresponding period last year.
Eleco Software Systems
Construction Software
MBA Computing experienced difficult trading conditions and incurred an increased
loss, following the decision of a potential major overseas customer not to place
an order due to its uncertainties about software developments in the US market.
However, software solutions provided by MBA Computing to Bell & Webster Concrete
and Gang-Nail Systems contributed to their success.
At the beginning of February 2003, Consultec became part of the Group. I
consider that the prospects for MBA Computing's business will improve as it
gains access to Consultec's construction software portfolio in the months ahead.
Internet Solutions
Forma Communications also produced disappointing results. A number of
significant projects came to an end and replacements were not started. However,
careful control of costs contained its loss. A notable success was the winning
of a mandate from the Ford Motor Company to develop the website for its Centre
for Manufacturing and Engineering Excellence, against stiff competition.
In February 2003, the Group acquired Leonardo Internet, a provider of integrated
web and print solutions. I anticipate that the prospects for both businesses
will be enhanced by the exploitation of the synergies between them.
Outlook
We continue to offer high quality, innovative products to the building industry
together with excellent construction software programs and state-of-the-art
internet solutions. We have also made selective investments in new products and
facilities, while having regard to the need in these difficult markets to
maintain a sound financial base.
The recent acquisition of Consultec has added critical mass in the construction
software market and strengthened the management of our software interests. These
actions have enabled us to make progress during the first six months of this
financial year and we will continue to adopt the same approach to our business
in the months ahead.
John Ketteley
Executive Chairman
Eleco plc
Consolidated profit and loss account
(Unaudited) (Audited)
Half year ended Year ended
31 December 30 June
2002 2001 2002
#'000 #'000 #'000
Turnover
Continuing operations 18,167 14,210 32,873
Operating profit
Continuing operations 937 653 1,878
Loss on disposal of tangible assets (37) - -
Profit on ordinary activities 900 653 1,878
before interest
Net interest payable (29) (81) (142)
Profit on ordinary activities 871 572 1,736
before tax
Tax on ordinary activities (299) (144) (497)
Profit on ordinary activities after 572 428 1,239
tax
Dividend on ordinary shares (Note (163) (142) (477)
2)
Retained profit 409 286 762
Dividends per share 0.375p 0.35p 1.00p
Earnings per share (Note 3) 1.4p 1.0p 3.0p
Diluted earnings per share (Note 4) 1.4p 1.0p 3.0p
Notes
1. The interim results have been prepared on the basis of the accounting policies adopted for the year
ended 30 June 2002, as set out in the Company's Annual Report and Accounts. The interim results do not
comprise statutory accounts within the meaning of section 240 of the Companies Act 1985.
2. The dividend will be payable on 4 April 2003 to shareholders on the register on 24 March 2003.
3. Based on the profit attributable to shareholders and a weighted average of 41,828,190 ordinary shares
(Dec 2001 - 41,080,957 and Jun 2002 - 41,195,519).
4. Based on the profit attributable to shareholders and a diluted weighted average of 42,017,296 ordinary
shares (Dec 2001 - 41,712,205 and Jun 2002 - 41,769,703). The dilution is caused by outstanding share
options.
5. Post Balance Sheet Events
On 3 February 2003, the company acquired the entire issued share capital of Consultec Group AB for a
consideration of SEK 33,648,000 paid in cash and the issue of 5,705,660 ordinary shares credited as
fully paid and ranking pari passu with existing ordinary shares except that they will not rank for the
interim dividend.
On 7 February 2003, the company acquired the entire issued share capital of Leonardo Internet Limited
for a consideration of #200,000 paid in cash.
6. The comparative figures for the year ended 30 June 2002 have been taken from but do not constitute the
Company's statutory accounts for that financial year. Those accounts have been reported on by the
Company's auditors and delivered to the Registrar of Companies. The report of the auditors was
unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985.
7. Copies of this interim statement and results, which were approved by the Board on 5 March 2003, are
available from the registered office of the Company, which is at Eleco House, 15 Gentlemen's Field,
Westmill Road, Ware, Herts SG12 0EF.
Statement of Total Recognised Gains and Losses
(Unaudited) (Audited)
Half year ended Year ended
31 December 30 June
2002 2001 2002
#'000 #'000 #'000
Profit for the period 572 428 1,239
Currency translation differences on 68 (159) (115)
foreign currency net investments
Total recognised gains for the period 640 269 1,124
Reconciliation of movement in equity shareholders' funds
(Unaudited) (Audited)
Half year ended Year ended
31 December 30 June
2002 2001 2002
#'000 #'000 #'000
Profit for the period 572 428 1,239
Dividends (163) (142) (477)
Other recognised gains/(losses) 68 (159) (115)
Proceeds from issue of ordinary shares 45 2 5
Issue of ordinary shares on acquisition - - 50
of subsidiary undertakings
Net increase in equity shareholders' funds 522 129 702
Opening equity shareholders' funds 9,247 8,561 8,545
Closing equity shareholders' funds 9,769 8,690 9,247
Eleco plc
Summarised consolidated balance sheet
(Unaudited) (Audited)
31 December 30 June
2002 2001 2002
#'000 #'000 #'000
Fixed assets 9,562 8,539 8,808
Current assets
Stocks 1,886 2,218 1,838
Debtors 6,175 5,688 7,026
Cash and bank balances 3,924 368 3,333
11,985 8,274 12,197
Creditors falling due within one
year
Bank loans and overdrafts (1,663) (456) (1,073)
Obligations under finance leases (155) (221) (195)
Other creditors (8,323) (5,878) (8,606)
Net current assets 1,844 1,719 2,323
Creditors falling due after more
than one year
Bank loans (1,262) (1,038) (1,488)
Obligations under finance leases (102) (162) (113)
(1,364) (1,200) (1,601)
Provisions for liabilities and charges (273) (368) (283)
Net assets 9,769 8,690 9,247
Capital and reserves
Called up share capital 4,309 4,260 4,282
Share premium account 5,098 5,049 5,080
Merger reserve 367 367 367
Profit and loss account (5) (986) (482)
Equity shareholders' funds 9,769 8,690 9,247
Eleco plc
Consolidated cash flow statement
(Unaudited) (Audited)
Half year ended Year ended
31 December 30 June
2002 2001 2002
#'000 #'000 #'000
Net cash inflow from operating 1,891 844 4,191
activities
Returns on investment and servicing of
finance
Net interest paid (29) (81) (142)
Net cash outflow from returns on (29) (81) (142)
investment and servicing of finance
Taxation 25 28 (6)
Capital expenditure and financial
investment
Increase in loans to Employee Share (39) (60) (60)
Ownership Trust
Purchase of fixed assets (1,271) (311) (914)
Sale of tangible fixed assets 7 3 65
Net cash outflow from capital expenditure
and financial investment (1,303) (368) (909)
Acquisitions and disposals
Purchase of subsidiary (6) - (538)
undertakings net of cash acquired
Sale of subsidiary undertaking's operations 10 767 770
Net cash inflow from acquisitions and 4 767 232
disposals
Equity dividends paid (339) (267) (412)
Net cash inflow before financing 249 923 2,954
Financing
New bank loans - - 750
Repayment of principal under (115) (118) (282)
finance leases
Repayment of bank loans (226) (151) (301)
Issue of ordinary shares 45 2 5
Net cash (outflow)/inflow from (296) (267) 172
financing
(Decrease)/increase in cash in the (47) 656 3,126
period
Eleco plc
Consolidated cash flow statement - reconciliations
(Unaudited) (Audited)
Half year ended Year ended
31 December 30 June
2002 2001 2002
#'000 #'000 #'000
Reconciliation of operating profit to
net cash flow from operating
activities
Operating profit 937 653 1,878
Depreciation charge 530 552 1,182
Amortisation of intangible assets 44 38 94
Amortisation of LTIP Awards 41 72 84
Profit on sale of tangible fixed assets (7) (2) (9)
Working capital decrease/(increase) 346 (469) 962
Net cash inflow from operating activities 1,891 844 4,191
Reconciliation of net cash flow to
movement in net debt
(Decrease)/increase in cash in the period (47) 656 3,126
Cash outflow/(inflow)from decrease in 341 269 (167)
debt and lease financing
Decrease in net debt resulting from 294 925 2,959
cash flows
New finance leases (64) (73) (162)
Effects of changes in foreign exchange 48 (115) (87)
rates
Decrease in net debt 278 737 2,710
Opening net cash/(debt) 464 (2,246) (2,246)
Closing net cash/(debt) 742 (1,509) 464
Segmental analysis
Group turnover and profits were attributable as follows
External sales Profit/(loss)
(Unaudited) (Audited) (Unaudited) (Audited)
Half year ended Year ended Half year ended Year ended
31 December 30 June 31 December 30 June
2002 2001 2002 2002 2001 2002
#'000 #'000 #'000 #'000 #'000 #'000
Continuing activities
Building systems 17,659 13,566 31,523 1,487 896 2,610
Software systems 508 644 1,350 (160) (17) 12
Corporate - - - (390) (226) (744)
Total continuing 18,167 14,210 32,873 937 653 1,878
Exceptional losses (37) - -
Profit before interest 900 653 1,878
This information is provided by RNS
The company news service from the London Stock Exchange
END
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