Final Results
Embargoed: 0700hhrs, 6 September 2006
Avingtrans plc
("Avingtrans" or the "Group")
Final Results for the Year Ended 31 May 2006
Highlights
* Turnover up significantly to £32.5m (2005: £24.3m)
* Profit after tax increased to £2.0m (2005: £1.3m)
* Basic earnings per share before goodwill amortisation of 16.2p (2005:
13.6p)
* Gearing reduced to 26% (2005: 41%)
* Dividend proposed - 0.5p per share (2005: 0.5p)
* Acquisition of 75% of Sigma for consideration of £0.3 million completed on
19 June 2006
Ken Baker, Chairman, commented,
"The year ended 31 May 2006 has been a further year of profitable growth and
consolidation. The acquisition of Sigma post year end has opened up new
opportunities in the aerospace industries and in China."
Contacts
Avingtrans plc Hansard Communications
Tel. 01159 499 020 Tel. 020 7245 1100
Ken Baker, Chairman Ben Simons
Stephen King, Finance Director
Chairman's statement
On behalf of the Board of Directors, I am pleased to announce the results for
Avingtrans plc for the year ended 31 May 2006 in which the Group attained a new
record level of order intake, turnover and after tax earnings since joining AIM
in June 2002.
The year under review contains the first full year of activity of our October
2004 acquisition Stainless Metalcraft Limited (SMC) and has been a period
largely concerned with integrating, managing and developing SMC and our
continuing businesses for profitable growth. A number of acquisition
opportunities were reviewed during the year and some remain active.
Demand for the Groups products remained generally strong throughout the year
with better than expected performance at both C&H Precision Limited (C&H) our
aerospace component finishing facility and the Jena group of companies which
provide ballscrew actuator products and services for the medical, aerospace and
machinery industries in the EU and USA. Order intake at Crown UK made a good
recovery in the second half of the year. Sales at SMC to its major customers
for MRI scanner components, after a good first half, were significantly lower
than planned in the last quarter due to a softening of demand in the US market
and related inventory and manufacturing adjustments by the major MRI OEMs. The
Company continued to review this situation and the broadening of the customer
base at SMC.
Financial performance
Earnings before interest, tax, depreciation and goodwill amortisation (EBITDA)
was £4.1m (2005: £3.2m) up 28% on improved turnover of £32.5m (2005: £24.3m) an
increase of 34%.
Operating profit for the period was £2.8m (2005: £2.3m). Profit after tax was £
2.0m (2005: £1.3m) an increase of 51%, representing a 15.5% return on net
assets.
Basic earnings per share before goodwill amortisation for the year was 16.2p
(2005: 13.6p) an increase of 19%.
Cash flow from operating activities for the year was £2.7m (2005: £3.9m) with
net cash at bank and in hand at the year-end of £1.2m (2005: £0.7m). The net
debt at the year-end was £3.3m (2005: £4.2m) resulting in a gearing reduction
to 26% (2005: 41%).
Dividend
In light of the financial performance highlighted above the Board is
recommending to the shareholders at the AGM a final dividend of 0.5p per share
making a total of 1.0p for the year (2005: 0.5p). This will be paid on 10
November 2006 to shareholders on the register at 15 September 2006.
Acquisitions and investments
The acquisition of 75% of Sigma for a consideration of £0.3 million was
completed after the year end on 19 June 2006. The funding for the acquisition
was from the Group's cash reserves. Sigma is currently operating as an
engineering and procurement consultancy for the EU and USA aerospace industry
with offices in Chengdu, Sichuan Province, China and Tamworth, England. Its
plan with Avingtrans is to develop a manufacturing presence in Chengdu for the
supply of precision components to the growing Chinese aerospace industry and to
cover existing and increasing demand from the EU and USA.
The Group continued its policy of investment in profit and efficiency enhancing
equipment throughout the year. Jena saw the final installation and
commissioning of a state of the art PC based Bosch test unit for high frequency
motorised spindles in its Nottingham facility. A number of new pieces of
equipment were also brought on line at SMC and Jena, Germany. Improvements to
building and the environment were carried out throughout the Group. Capital
expenditure for the year totalled £1.2 million and remains ahead of the costs
of depreciation.
Review of the year
SMC, our largest operating subsidiary, continued its strong performance during
the first nine months of the year with an increase in delivery of MRI scanner
components to a number of the worlds largest MRI scanner OEMs and the delivery
of scientific products to a number of EU companies and scientific institutions.
A long term strategic review with Siemens was completed during the year which
resulted in the raising of SMC to the status of a tier one supplier of MRI
scanner components and the signing in April 2006 of a rolling two year supply
agreement. Work continued on the broadening of the customer base at SMC with
successful bids for scientific and research projects with international
research institutions including ILL in Grenoble and CERN in Switzerland.
The Jena group of companies successfully improved its performance during the
year with improved sales of its ballscrew actuator and machine spindle products
and services in all three locations in the UK, USA and Germany. Performance and
order intake was particularly robust in Germany on the back of a strongly
recovering German engineering economy. Efforts continued in the year in our
pursuit of new customers and acquisitions in this operation.
C&H continued to strengthen its position in the aerospace market as a supplier
of precision polishing and finishing services with deliveries of finished
blades increasing significantly during the year. A new three year agreement
with Rolls Royce for the precision polishing of turbine and compressor blades
and vanes for a variety of aero engines was entered into. Other polishing and
finishing work on landing gear legs for aerospace applications was taken up in
the second half of the year as the unit continued to expand its operations to
meet with the increased demand for its services.
Crown UK Limited (Crown), the Group's Bristol based road speed camera pole and
railway signalling pole design and manufacturing facility recovered strongly in
the second half of the year following the issue of the much delayed government
report on road speed cameras in November 2005. Activity was centred on service
work and the replacement of conventional camera installations with the latest
digital cameras, which are of greater accuracy and require lower maintenance.
Railway work was still difficult to come by during the year as programmes of
development on the major inter-city routes continue to be held up in the
planning stage. A number of overseas contracts were tendered for with some
success in Canada, the mid-east and Australia.
Two prototype camera housings were manufactured by Crown for Vehicle Sensor
Technology Limited (VST) the newly formed Avingtrans Subsidiary who signed an
exclusive worldwide 5 year renewable supply and service agreement with Vehicle
Occupancy Limited, the owner of a patented system for the detection of the
number of people in a motor vehicle. The system, which is still undergoing
development, will make it easier to enforce priority lanes for car sharing
initiatives and for differential tolling on roads, bridges, tunnels and car
parks.
Directors and senior management
Avingtrans has continued to strengthen its senior management team and we
welcomed a new Managing Director to Jena Germany.
In accordance with the Articles of Association, Jeremy Hamer retires from the
Board in rotation and offers himself for re-election at the AGM scheduled for
11 October 2006.
Share warrants
K M Baker (772,000) and S J Lawrence (398,000) exercised share warrants in the
Company in February and March 2006 under investment and performance contracts
entered into in 2002. The shares were awarded at a price of 50p each. In total
748,000 were sold into the market and 422,000 were retained by the two
directors. As well as receiving the income from the issue of the shares during
the year the Company also benefited from a tax credit of £300,000 in respect of
the share issue.
Outlook
Order intake and sales continue to be very encouraging at C&H, Jena and Crown
though some work for Crown on railway signalling may be postponed until the
second half of FY 2007. The weakening US dollar and a softening US market does
appear to be slowing growth in the MRI scanner market so reducing growth
prospects at SMC in this product area. The Company has been developing other
market areas and products for SMC are expected to keep SMC at full capacity
particularly in the second half of the current year.
Since the acquisition of Sigma two managers have expatriated to China, a
Chinese management team has been put in place, the first batch of machine tools
have been ordered and we expect to be operational in a new 30,000sq/ft facility
by the end of 2006 as planned. A letter of intent to purchase components for up
to £2 million per annum has been received by Sigma.
Work also continues on the processing of suitable acquisition opportunities
with a number under review.
With most major economies remaining strong and the products and services
offered by the Group remaining in demand we look forward to another year of
profitable growth
In closing I should like once again on behalf of the Board to heartily
congratulate and thank all of the employees and co-workers for their successful
efforts in the past year.
K M Baker
Chairman
6 September 2006
Consolidated profit and loss account
for the year ended 31 May 2006
Note 2006 2005
(as
restated)
£'000 £'000
Turnover 1 32,490 24,329
Cost of sales (24,813) (17,821)
Gross profit 7,677 6,508
Selling and distribution expenses (595) (765)
Administration expenses and goodwill (4,287) (3,479)
amortisation
Operating profit:
Operating profit before goodwill 3,188 2,542
amortisation
Goodwill amortisation (393) (278)
Operating profit 2,795 2,264
Interest receivable 4 5
Interest payable (349) (300)
Profit on ordinary activities before 1 2,450 1,969
taxation
Taxation on profit on ordinary activities 2 (489) (668)
Profit for the financial year 1,961 1,301
Earnings per share - basic 3 13.5p 11.2p
Earnings per share - diluted 3 12.6p 10.6p
All the above results are from continuing operations
Consolidated statement of total recognised gains and losses
for the year ended 31 May 2006
2006 2005
£'000 £'000
Profit for the financial year 1,961 1,301
Other recognised gains and losses
- exchange gains on translation of foreign 8 37
subsidiaries
Total recognised gains and losses relating to 1,969 1,338
the year
Reconciliation of movements in shareholders' funds
2006 2005
(as restated)
£'000 £'000
Profit for the financial year 1,961 1,301
Issue of shares 585 4,144
Exchange gains on translation of foreign 8 37
subsidiaries
Dividends (148) -
Net change to shareholders' funds 2,406 5,482
Shareholders' funds at 1 June 10,240 4,758
Shareholders' funds at 31 May 12,646 10,240
Summarised consolidated cash flow statement
for the year ended 31 May 2006
2006 2005
£'000 £'000
Net cash inflow from operating activities (see 2,710 3,917
below)
Returns on investment and servicing of finance (365) (249)
Taxation (529) (266)
1,816 3,402
Capital expenditure and financial investment (396) (558)
Acquisitions (100) (8,154)
Equity dividends paid to shareholders (148) -
Management of liquid resources - -
Financing (687) 5,521
Increase in net cash (see note 4) 485 211
Note: reconciliation of operating profit to net cash inflow from operating
activities
2006 2005
£'000 £'000
Operating profit 2,795 2,264
Depreciation charges 898 627
Goodwill amortisation 393 278
(Gain)/loss on sale of tangible fixed assets (6) 1
Impairment of investment 11 33
Decrease/(increase) in stocks 1,127 (764)
Decrease/(increase) in debtors 595 (1,016)
(Decrease)/increase in creditors (3,103) 2,494
Net cash inflow from operating activities 2,710 3,917
Summarised consolidated balance sheet
at 31 May 2006
2006 2005
(as restated)
£'000 £'000
Fixed assets
Intangible assets 6,777 6,739
Tangible assets 6,203 5,869
Investments 15 26
12,995 12,634
Current assets
Stocks 3,190 4,566
Debtors 4,931 5,495
Cash at bank and in hand 1,398 909
9,519 10,970
Creditors: amounts falling due within one (6,284) (9,366)
year
Net current assets 3,235 1,604
Total assets less current liabilities 16,230 14,238
Creditors: amounts falling due after more (3,334) (3,801)
than one year
Provisions for liabilities and charges (250) (197)
Net assets 12,646 10,240
Capital and reserves
Called up share capital 771 713
Share premium account 4,310 3,783
Capital redemption account 813 813
Other reserves 180 180
Profit and loss account 6,572 4,751
Equity shareholders' funds 12,646 10,240
Notes to the preliminary statement
31 May 2006
1. Segmental analysis
Class of business
Turnover Profit before Tax Net Assets
2006 2005 2006 2005 2006 2005
£'000 £'000 £'000 £'000 £'000 £'000
By class of
business
Precision 10,189 9,454 1,161 819 3,851 3,385
Engineering
Medical and 22,301 14,875 2,065 1,510 4,213 4,042
Scientific
Unallocated central - - (431) (65) 4,582 2,813
items
Net Interest - - (345) (295) - -
Total 32,490 24,329 2,450 1,969 12.646 10,240
Turnover by geographical market
Precision Medical and Total Total
Engineering Scientific
2006 2006 2006 2005
£'000 £'000 £'000 £'000
Turnover by geographical origin
United Kingdom 5,524 22,301 27,825 20,127
Europe 4,588 - 4,588 4,124
North America 77 - 77 78
Total 10,189 22,301 32,490 24,329
Turnover by geographical destination
United Kingdom 5,341 20,118 25,459 18,483
Europe 3,929 1,548 5,477 4,655
North America 773 635 1,408 1,074
Rest of World 146 - 146 117
Total 10,189 22,301 32,490 24,329
2. Taxation
2006 2005
£'000 £'000
UK corporation tax 307 645
Foreign tax 129 -
Current taxation 436 645
Deferred taxation 53 23
Group tax on profit on ordinary activities 489 668
3. Earnings per share
2006 2005
No No
Weighted average number of shares - basic 14,544,793 11,594,530
Warrant/ Share Option adjustment 1,029,810 653,485
Weighted average number of shares - diluted 15,574,603 12,248,015
£'000 £'000
Earnings attributable to shareholders 1,961 1,301
Earnings attributable to shareholders before 2,354 1,579
goodwill amortisation
Basic earnings per share 13.5p 11.2p
Basic earnings per share before goodwill 16.2p 13.6p
amortisation
Diluted earnings per share 12.6p 10.6p
4. Analysis of net debt
1 June Cashflow Other non-cash Exchange 31 May
Move-ments
2005 Changes 2006
£'000 £'000 £'000 £'000 £'000
Cash at bank and in 909 485 - 4 1,398
hand
Bank overdrafts and (173) - - (2) (175)
loans
736 485 - 2 1,223
Bank loans (3,468) 608 - - (2,860)
Hire purchase (1,485) 664 (830) (3) (1,654)
leases
(4,953) 1,272 (830) (3) (4,514)
Net debt (4,217) 1,757 (830) (1) (3,291)
5. Preliminary statement
This preliminary statement, which has been agreed with the auditors, was
approved by the Board on 5 September 2006. It is not the Company's statutory
accounts. Statutory accounts will be sent to shareholders shortly.
The statutory accounts for the two years ended 31 May 2005 and 2004 received
audit reports which were unqualified and did not contain statements under s237
(2) or (3) of the Companies Act 1985. The statutory accounts for the year ended
31 May 2005 have been delivered to the Registrar of Companies but the 31 May
2006 accounts have not yet been filed.
Friday, 17th May 2024
COMPANIES COVERED:
Latest directors dealings
- 19 minutes ago NAHL Group
- 22 minutes ago Newbury Racecourse plc
- 27 minutes ago Jardine Matheson Holdings Ltd (Singapore Reg)
- 40 minutes ago Gamma Communications
- 1 hour ago Anglo American