Interim Results
Embargoed: 0700hrs, 9 February 2006
Avingtrans Plc
('Avingtrans' or the 'Company')
Interim Results for the Six Months Ending 30 November 2005
Highlights Six months Six months Change
to 30 to 30
November November
2005
2004
Turnover £15,701,000 £7,929,000 +99%
EBITDA £1,983,000 £989,000 +101%
Profit before tax £1,168,000 £559,000 +109%
Earnings per share before goodwill 7.0p 6.0p +16.6%
Dividend 0.5p -
* Highest level of first half order intake, turnover, profitability, net
assets and earnings per share since joining AIM in June 2002
* Performance at C&H and Jena exceed management expectations
* Stainless Metalcraft delivers record numbers of MRI scanner bodies and
components
* Slower sales and earnings at Crown after delayed Government report on speed
cameras. Improvement anticipated in second half
* Extended trials for vehicle occupancy detection camera housing
Ken Baker, Chairman, commented,
'All divisions of the Company with the exception of Crown have traded to or
above expectations in the period with C&H, Jena and Stainless Metalcraft
developing strong forward order books.
I am pleased to note the continuation of this positive trend in the second half
of the current year.'
For further information please contact,
Ken Baker, Chairman
Stephen King, Finance Director
Avingtrans Plc
Adam Reynolds/Ben Simons
Hansard Communications
Tel. 020 7245 1100
Chairman's Statement
I am pleased to announce the results of Avingtrans Plc for the six months
ending 30 November 2005.
The period was largely concerned with managing our continuing operations,
developing new trading links at home and abroad, investing in and upgrading our
plant and manufacturing systems and exploring new opportunities for the future.
No acquisitions were completed during the period although a number of companies
that are of interest continued to be reviewed.
Demand for the Group's products was generally strong throughout the period.
Stainless Metalcraft delivered a record number of MRI scanner bodies and
components and completed the delivery of a significant order for the EU
scientific research community. Order intake and backlog continued at high
levels. Sales and earnings at C&H, our aerospace component finishing facility,
and at Jena, manufacturers of new and replacement ballscrew actuators and
spindles for the medical, aerospace and machinery industry exceeded management
expectations. However, sales and earnings were below expectations at Crown, our
road speed camera pole manufacturer, where the Governmental report on speed
cameras slowed traditional UK speed camera installations for some months.
As a consequence of the above, the Company recorded the highest level of order
intake, turnover, profitability, net assets and earnings per share since
joining AIM in June 2002.
Financial performance
Turnover for the six months ended 30th November 2005 was £15.7 million (2004: £
7.9 million) an increase of 99%. Earnings before interest, tax depreciation and
goodwill amortisation (EBITDA) was £1,983,000 (2004: £989,000) an increase of
101%.
Operating Profit for the period was £1,358,000 (2004: £676,000) an increase of
109%. Profit before tax for the period increased 109% to £1,168,000 (2004: £
559,000).
The Company had a positive cash flow from operations during the period of £
987,000 (2004: £1,384,000). During the period, the Company made bank debt
repayments of £302,000. The net debt at 30 November 2005 was £4,584,000 (2004:
£5,114,000), with gearing reduced to 41.5% (2004: 54.7%).
An exchange rate gain of £52,000 (2004: £64,000) was recorded through the
reserves in the period.
Earnings per share
Earnings per share, for the period ended 30 November 2005, before goodwill
amortisation was 7.0p (2004: 6.0p) a 16.6% increase. Basic earnings per share
was 5.7p (2004: 4.8p) and fully diluted earnings per share was 5.3p (2004:
4.8p), increases of 18.7% and 10.4% respectively.
The weighted average number of Ordinary shares in issue during the period was
14,262,086 (2004: 7,998,268).
Dividend
The Board has agreed a dividend of 0.5p for the half year to be paid on 12 May
2006 to shareholders on the register at 7 April 2006.
Six months review
Stainless Metalcraft continued to strengthen its position as a leading supplier
of MRI scanner bodies to the international MRI scanner industry being appointed
a tier one supplier to its major customer, Siemens. Deliveries of MRI scanner
bodies during the period were at record levels. Significant developments were
also made on projects for the EU and UK research and scientific community with
delivery of high integrity components for the CERN nuclear fusion project in
Switzerland, projects for Rutherford Appleton Laboratories in the UK and an
underwater pressurised rescue vessel for the UK MOD. Work continues on
improving the manufacturing site at the Chatteris plant, including the
re-cladding of the exterior of the buildings as part of the programme of energy
cost saving started in 2004 as cost of gas and electricity supplies continue to
escalate. Additionally, the manufacturing facilities have been upgraded with
the installation of a new computer controlled welding robot and two new state
of the art computer controlled production machines. Management are reviewing
additional opportunities within the EU and UK aerospace industries. Several
senior employee visits were also made to Mainland China and talks are
continuing with a UK company on the opportunities that may exist in that
country.
Order intake and sales at Jena, through its operations in Germany the UK and
USA, continued to increase during the period as a result of the improved
economic situation in Germany and the development and expansion of the new Jena
Group initiative to provide a one stop service and repair of ballscrews,
bearings and spindles in the UK. Part of this programme was the completion of
the installation at the Sherwood Park facility in Nottinghamshire of a new
computer controlled testing facility for high value, high frequency spindles
servicing aerospace manufacturing in the UK and EU.
C&H sales and order intake grew strongly during the six months under review
with new customers in the aerospace airframe sector and continuing growth in
our turbine blade finishing activities for aero engines and land based
turbines.
Activity at Crown UK Limited, reduced as a result of the slow down of
traditional camera post supply in the UK, concentrated on overseas
opportunities and the introduction of digital cameras for Transport for London.
During the period, there was renewed enquiry and tendering activity for posts
for Railway signalling applications for the next programme of installations on
the West Coast line.
Two prototype camera housings for use on a new programme for the detection of
occupancy levels in motor vehicles were manufactured and delivered to sites in
the UK for extended trials. These housings were supplied in support of a newly
formed Avingtrans Subsidiary Company, Vehicle Sensor Technology Limited, which
has 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, where
deployed, will make it easier to enforce priority lanes for car sharing
initiatives and for differential tolling on roads, bridges, tunnels and car
parks.
Current Trading and Prospects
All divisions of the Company with the exception of Crown UK are continuing to
trade to or above expectations with C&H, Jena and Stainless Metalcraft
developing strong order books. The softening in the UK market for roadside
speed camera poles was widely forecast as the Government reviewed its options
for traffic speed detection and control but deepened progressively as the
report was delayed. The report is now published and orders for traditional
camera posts and the new digital camera posts are beginning to pick up again.
Orders are also expected for Railway signal posts in the second half of the
year and Crown looks forward to a much improved second half.
Unexpected and material increases in the cost of energy supplies and raw
materials are of concern for the second half, but cost reduction and
productivity upgrade programmes are under constant review in an effort to
minimise the effects of the extra costs.
The awarding of Tier 1 supplier status to Stainless Metalcraft by Siemens and
the signing of a 5 year supply and service agreement with Vehicle Occupancy
Limited for new type camera housings give rise for optimism for the remainder
of the year and the longer term future.
K.M.Baker
Chairman
9 February 2006
Consolidated Profit and Loss Account
Note 6 mths to 6 mths to 12 mths to
31 May
30 Nov 30 Nov 2005
2005 2004
Unaudited Audited
Unaudited
£'000 £'000
£'000
Turnover
Group turnover - continuing 15,701 7,929 24,329
operations
Operating profit before
amortisation
Continuing operations 1,537 775 2,542
Amortisation of goodwill (179) (99) (278)
Group operating profit 1,358 676 2,264
Profit on ordinary activities 1,358 676 2,264
before interest
Net interest payable and similar (190) (117) (295)
charges
Profit on ordinary activities 1,168 559 1,969
before taxation
Tax on profit on ordinary 3 (355) (177) (668)
activities
Profit for the period 813 382 1,301
Dividend - - (71)
Retained profit for the period 813 382 1,230
Earnings per share 4
Basic 5.7p 4.8p 11.2p
Diluted 5.3p 4.8p 10.6p
Statement of Total Recognised Gains and Losses
6 mths to 6 mths to 12 mths to
30 Nov 30 Nov 31 May
2005 2004 2005
Unaudited Unaudited Audited
£'000 £'000 £'000
Profit for the financial period 813 382 1,301
Other recognised gains and losses
Currency translation gain 52 64 37
Total recognised gains/(losses) relating 865 446 1,338
to the period
Summarised Consolidated Balance Sheet
At 30 Nov At 30 Nov At 31 May
2005 2004 2005
Unaudited
Unaudited Audited
£'000
£'000 £'000
Fixed assets
Intangible assets 6,560 6,951 6,739
Tangible assets 6,113 4,997 5,869
Investments 26 59 26
12,699 12,007 12,634
Current assets
Stocks 4,935 4,323 4,566
Debtors due within one year 5,270 5,627 5,495
Cash at bank and in hand 682 672 909
10,887 10,622 10,970
Creditors: Amounts falling due within one (8,561) (9,191) (9,437)
year
Net current assets 2,326 1,431 1,533
Total assets less current liabilities 15,025 13,438 14,167
Creditors: Amounts falling due after more (3,801) (3,783) (3,801)
than one year
Provisions for liabilities and charges (190) (307) (197)
Net assets 11,034 9,348 10,169
Capital and reserves
Called up share capital 713 713 713
Share premium account 3,783 3,783 3,783
Capital redemption reserve 813 813 813
Other reserves 180 180 180
Profit and loss account 5,545 3,859 4,680
Equity shareholders' funds 11,034 9,348 10,169
Consolidated Cash Flow Statement
6 mths to 6 mths to 12 mths to
31 May 2005
30 Nov 30 Nov Audited
2005Unaudited 2004Unaudited £'000
£'000 £'000
Net cash inflow from operating 987 1,384 3,917
activities
Returns on investment and servicing of
finance
Net interest (206) (119) (249)
Net cash outflow from returns on (206) (119) (249)
investment and servicing of finance
Taxation paid (275) (162) (266)
Capital expenditure and financial
investment
Purchase of fixed assets (57) (96) (589)
Sale of fixed assets 3 5 31
Purchase of fixed asset investments - - -
Net cash outflow from capital (54) (91) (558)
expenditure and financial investment
Acquisitions and disposals
Purchase of subsidiary undertakings (100) (8,035) (8,159)
Net cash acquired with subsidiaries - 5 5
Purchase of unincorporated business - - -
Net cash outflow from acquisitions and (100) (8,030) (8,154)
disposals
Equity dividends (71) - -
Financing
Issue of share capital - 4,144 4,144
New Loans - 2,895 2,896
Repayment of loan capital (292) (722) (1,165)
Capital element of finance lease (273) (130) (354)
payments
Net cash (outflow)/inflow from (565) 6,187 5,521
financing
(Decrease)/increasein cash (284) (831) 211
Reconciliation of Operating Profit to Net Cash Flow from Operating Activities
6 mths to 6 mths to 12 mths to
31 May
30 Nov 2005 30 Nov 2005
£'000 2004 £'000
£'000
Operating profit 1,358 676 2,264
Depreciation of tangible fixed assets 446 214 627
Amortisation of intangible assets and 179 99 278
goodwill
(Profit)/loss on disposal of tangible (3) (2) 1
fixed assets
Impairment of Investment - - 33
Increase in stocks (314) (303) (764)
Decrease/(increase) in debtors 261 (1,132) (1,016)
(Decrease)/increase in creditors (940) 1,832 2,494
Net cash inflow from operating 987 1,384 3,917
activities
NOTES
1. This interim report was neither audited nor reviewed by the auditors. It was
approved by the Board on 8 February 2006. It has been prepared using accounting
policies that are consistent with those adopted in the statutory accounts for
the year ended 31 May 2005.
The figures for the year to 31 May 2005 were derived from the statutory
accounts for that year. The statutory accounts for the year ended 31 May 2005
have been delivered to the Registrar of Companies and received an audit report
which was unqualified and did not contain statements under s237(2) or (3) of
the Companies Act 1985.
2. This statement is being sent to shareholders of the Company and will be
available at the Company's Registered Office.
3. The taxation charge is based upon the expected rate for the year ended 31
May 2006.
4. Earnings per share has been calculated using the weighted average number of
14,262,086 Ordinary Shares in issue during the period (2004: 7,998,268)
(Audited 2005: 11,588,530).
Basic earnings per share before goodwill amortisation was 7.0p (2004: 6.0p)
(Audited 2005: 13.6p)
5. Analysis of Net Debt
1 June Cash Inception Exchange 30 Nov
2005 £ flow £ of loans
'000 '000 and finance movement 2005
leases
£'000 £'000
£'000
Cash at bank and 909 (209) - (18) 682
in hand
Bank overdraft (173) (75) - (1) (249)
Cash 736 (284) - (19) 433
Debt (3,468) 302 - - (3,166)
Hire purchase (1,485) 263 (628) (1) (1,851)
leases
(4,953) 565 (628) (1) (5,017)
Net debt (4,217) 281 (628) (20) (4,584)
6. Reconciliation of movements in Shareholders' Funds
6 mths to 6 mths to 12 mths
30 Nov 30 Nov 200 to 31 May
2005 4 2005
Unaudited Unaudited Audited
£'000 £'000 £'000
Profit for the financial period 813 382 1,301
Other recognised gains and losses 52 64 37
relating to the period
Dividends - - (71)
Proceeds of share issue - 4,144 4,144
Increase in shareholders' funds 865 4,590 5,411
Opening shareholders' funds 10,169 4,758 4,758
Closing shareholders' funds 11,034 9,348 10,169
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