Final Results - Year Ended 31 January 2000

Bulgin PLC 25 May 2000 A Year of Good Progress Bulgin PLC ('Bulgin') announces its unaudited results for the year ended 31 January 2000. Bulgin designs and manufactures electromechanical components and power electronics products for use in a wide variety of sectors including security, communications, office equipment, control equipment, instrumentation, medical, marine, construction, utilities, lighting, test equipment and military. Bulgin also operates a business which trades electronic components. Highlights * Profitability restored * Debt reduced * Enfranchisement of 'A' shares achieved in April 2000 * Strong order book including £1 million contract won by Bulgin Power Source from Logica * Export sales increased * Improved operating margins * Winner of The Guild of Shareholders' 'Most Investor Friendly' award Financial Summary * Turnover on continuing operations for the year £13.4 million (1999: £12.1 million) * Profit before tax and exceptional items of £745,000 (1999: £152,000) * Profit before tax of £665,000 (1999: £271,000 loss) * Cash generated £1,161,000 (1999: £80,000 utilised) * Net gearing 3% (1999: 43%) * Final dividends 0.25p per share, post enfranchisement (1999: 1.0p per share, pre enfranchisement; 0.65p per share, post enfranchisement) Chairman Alastair Winter commented: 'I am very pleased with progress. The Group has returned to profitability, debt has been significantly reduced, the strength of sterling has been accommodated, shareholders have supported the Board on the enfranchisement issue, we have strong new products and the management has been strengthened. 'I am disappointed with the delay in completing the intended acquisitions, discussions on which we announced on 27th January 2000. This has been primarily due to due diligence issues and vendor changes in the businesses for sale. I look forward to making further announcements imminently. 'Our strategy is to develop the Group by directing resources towards the most attractive value-added opportunities, including acquisitions. Bulgin intends to exploit opportunities for development of the electronics trading business into a full scale logistics partner for its growing number of international clients. 'The relevant business climate has improved and our analysis suggests that this improvement will continue throughout the current year. We are confident that the current year will see further progress'. For further information please contact: Alastair Winter, Chairman Brian Emerson, Chief Executive Bulgin Plc Tel: 020 8477 9300 Rick Thompson, Director Mike Seabrook Teather & Greenwood Limited Tel: 020 7426 9073 Hamish McFall Ana Nogales Tavistock Communications Ltd Tel: 020 7600 2288 CHAIRMAN'S STATEMENT Bulgin PLC is a group of specialist and commodity businesses which address markets for electrical and electronic products and services. The year under review has been an important one in the Group's development. Following disposal of the business and assets of Cirkit Distribution Ltd, on which I reported last year, and the subsequent sale of the Broxbourne property in August 1999, Bulgin became a design, manufacturing and logistics services operation. Results In the year to 31st January 2000 turnover on continuing operations increased by 11% from £12.1 million to £13.4 million. Total turnover fell by 14% from £16.8 million to £14.4 million. Profit before exceptional items and taxation increased by 390% to £745,000 (1999 - £152,000). Net gearing decreased to 3% from 43% and cash increased by £1.2 million compared with cash consumed of £80,000 in the previous year. Sale of Investment During November 1999 we sold our holding of 930,233 shares in Deltron Electronics PLC which was received as part of the proceeds from the disposal of Cirkit Distribution. Sale of the shares was realised at a small profit. Enfranchisement On 16th March 2000 our shareholders voted overwhelmingly in favour of the Board's proposals for enfranchisement of the 'A' Non-Voting Ordinary shares. All shareholders now have voting rights and the new single class of Ordinary share started trading on 7th April 2000. The company's improved shareholder communications policy was recognised by receipt of the 'Most Investor Friendly' award of The Guild of Shareholders at an event on 12th May 2000. Dividends Your Board has reviewed its dividend policy and wishes in future to maintain dividend cover of at least 3 times to allow for sensible re-investment. For the year under review your Board is recommending a reduced final dividend of 0.25p per share, post enfranchisement (1999: 1.0p per share, pre enfranchisement or 0.65p per share, post enfranchisement) to shareholders on the register at 16 June 2000. Acquisitions On 27th January 2000 we announced that the company was in discussions with a view to acquiring two power electronics businesses from a single vendor. It was our expectation that the acquisitions would be completed by the end of March. However, due to matters arising from our due diligence exercise and subsequent changes in the businesses for sale, the acquisition process is ongoing. The businesses in question remain completely in line with our development strategy and I look forward to making a further announcement in due course. Future Strategy Our strategy is to develop the Group by directing resources towards the most attractive value-added opportunities including acquisitions. The power electronics business will continue to focus on specialist requirements in the marketplace. The electromechanical business is well established and has substantial growth potential. Production constraints will be relieved by expansion plans currently being implemented. Your Board intends to exploit opportunities for development of the electronics trading business into a full scale logistics partner for its growing number of international clients. Outlook The relevant business climate has improved and our analysis suggests that this improvement will continue throughout the current year. CHIEF EXECUTIVE'S REVIEW All business elements of the Group progressed. The electromechanical business in Barking and the power electronics operation in Lincoln experienced strong growth in customer orders. The electronic component trading business, now located in Hertford, has moved forward particularly in the USA market. Bulgin Components, which is based in Barking, designs and manufactures mains connectors, waterproof connectors, switches, battery holders, fuseholders, indicators and filters for a wide range of markets including security, communications, office equipment, control equipment, instrumentation, medical, marine, construction, utilities and lighting. The operation is a medium volume manufacturer with almost 3000 products and turning out up to 20 million pieces per year. Customers include original equipment manufacturers (OEMs), catalogue distributors, overseas distributors and contract equipment manufacturers (CEMs) to whom the major OEMs are increasingly outsourcing their manufacturing. Turnover increased by 11% to £10.2 million. Net operating margins improved and the order book remains strong at approximately 10 weeks sales. Sales to the USA increased in response to our marketing initiatives and further progress is anticipated. Notable among new product introductions was the launch of the 900 series Buccaneer connector which addresses a gap in the market for a robust connector suitable for hostile environments. Development costs for this product were approximately £250,000. Early orders are encouraging and interesting new variants are already under consideration. On 15th May 2000 Richard Hinds was appointed Managing Director of Bulgin Components and he will implement the next stage of our strategic plan for the company's future. This involves significant investment in automation and upgrading of production and commercial systems. Bulgin Power Source, which is based in Lincoln, designs and manufactures custom and standard power supply solutions for the information technology, security, automation, communications and CATV markets. Bulgin Power Source also provides CATV network support services. The company has concentrated its marketing activities and custom design skills on more value-added strategic customer projects during the year. A small loss was incurred on turnover unchanged from the previous year at £2.3 million. Bulgin Power Source traded at a profit in the second half. More significantly the order book has improved in quality and quantity and represented more than 6 months sales at year end. After the year end Bulgin Power Source won a £1 million contract to supply custom designed power supplies to a major systems supplier to the gas industry. The delivery dates for much of the order book fall into the second half of the current year and consequently Bulgin Power Source will report a loss for the first half but is expected to return an acceptable profit for the year as a whole. Cirkit Holdings now consists principally of BP Purchasing, following the disposal of Cirkit Distribution in May 1999, whose results up to that date have been included as discontinued operations. BP Purchasing has been established as a discreet business unit in Hertford supplying electronic component sourcing services to manufacturers. While this is a highly competitive market, BP Purchasing has experienced sales growth of 68% in the year under review. The additional margin generated has been re-invested in the development of the business for the future including recruitment of additional sales personnel and new computer systems. Much of the business growth has resulted from more aggressive use of internet based electronic trading exchanges. These excellent tools allow BP Purchasing to access customers worldwide and it is our belief that progressive investment will continue to generate sales growth. Group Profit and Loss Account Year ended 31January 2000 Unaudited Audited 2000 1999 (as £'000 restated) £'000 Turnover - continuing operations 13,373 12,058 - discontinued operations 1,039 4,740 -------- ------- 14,412 16,798 Cost of Sales (9,284) (10,907) -------- -------- Gross Profit 5,128 5,891 Net operating expenses - normal (4,237) (5,509) - exceptional (189) (423) -------- ------- Operating profit - continuing operations 707 199 - discontinued operations (5) (240) -------- -------- 702 (41) Discontinued operations; (Loss) on sale of operations (25) 0 Profit on disposal of freehold property 134 0 -------- -------- Profit / (loss) on ordinary activities before interest 811 (41) Net interest payable (146) (230) -------- -------- Profit / (loss) on ordinary activities before taxation 665 (271) Taxation on profit / (loss) on ordinary activities (188) 64 -------- ------- Profit / (loss) on ordinary activities after taxation 477 (207) Dividends (186) (368) ------- -------- Transfer to / (from) reserves 291 (575) ===== ===== There were no recognized gains or losses for the year other than included in the profit and loss account. Note of Historical Cost Profits and Losses Year ended 31 January 2000 Unaudited Audited 1999 2000 (as £'000 restated) £'000 Reported profit / (loss) on ordinary activities before taxation 665 (271) Realisation of property revaluation gains of previous years 120 - Difference between a historical cost depreciation charge and the actual depreciation charge of the period calculated on the revalued amount 9 12 -------- ------- Historical cost profit / (loss) on ordinary activities before taxation 794 (259) ===== ===== -------- -------- Historical cost profit / (loss) for the period after taxation and dividends 420 (563) ===== ===== Notes 1. It is intended that a final dividend of 0.25p per share will be paid on 17 July 2000 to holders on the register at 16 June 2000. 2. Earnings / (loss) per share The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year. The calculation of the diluted earnings per share is based on the basic earnings per share, adjusted to allow for the issue of shares on the assumed conversion of all dilutive options. On 6 April 2000 the 'A' Non-Voting Ordinary shares were enfranchised with the scrip issue of 16,000,000 Ordinary shares of 5p each. The calculation of the post enfranchisement basic and diluted earnings per share takes into account the scrip issue of ordinary shares. The calculation of earnings is based on the Group profit after taxation of £477,000 (1999: loss £207,000). The weighed average number of shares used in the calculations is set out below. Unaudited Audited 2000 1999 Basic Diluted Basic Diluted Weighted average number of shares in issue - Ordinary shares 2,000,000 2,000,000 2,000,000 2,000,000 - 'A' Non- Voting Ordinary shares 27,190,000 27,190,000 26,955,753 26,955,753 --------- --------- --------- -------- 29,190,000 29,190,000 28,955,753 28,955,753 - share option - - dilution 87,975 209,015 --------- --------- --------- --------- 29,190,000 29,277,975 28,955,753 29,164,768 - enfranchisement scrip issue 16,000,000 16,000,000 16,000,000 16,000,000 ---------- ------------ ----------- ---------- 45,190,000 45,277,975 44,955,753 45,164,768 ========= ======== ========= ========= Earnings / (loss) per share - pre enfranchisement 1.63p 1.63p (0.71p) (0.71p) - post enfranchisement 1.06p 1.05p (0.46p) (0.46p) Group Balance Sheet Year ended 31 January 2000 Unaudited Audited 2000 1999 £'000 £'000 Fixed Assets Intangible assets 129 70 Tangible assets 3,497 4,111 -------- -------- 3,626 4,181 Current Assets Stocks 1,344 2,189 Debtors 2,237 2,712 Cash at bank and in hand 2,111 771 -------- ------- 5,692 5,672 Creditors: amounts falling due within one year (3,201) (3,748) -------- ------- Net Current Assets 2,491 1,924 -------- ------- Total Assets Less Current Liabilities 6,117 6,105 Creditors: amounts falling due after more than one year (1,436) (1,827) Provisions For Liabilities And Charges (163) (60) -------- ------- Net Assets 4,518 4,218 ===== ===== Capital And Reserves Called - up share capital 1,460 1,454 Share premium 834 831 Revaluation reserve 125 254 Profit and loss account 2,099 1,679 -------- -------- Shareholders' funds - Equity 4,518 4,218 ===== ===== Group Cash Flow Statement Year ended 31 January 2000 Unaudited Audited 2000 1999 £'000 £'000 Cash flow from operating activities 979 1,478 Returns on investments and servicing of (176) (194) finance Taxation 3 (261) Capital expenditure and financial investment 166 (487) Acquisitions and disposals 1,257 0 Equity dividends paid (365) (362) --------- -------- Net cash inflow before financing 1,864 174 Financing (703) (254) -------- -------- Increase / (Decrease) in cash in the year 1,161 (80) ===== ===== Notes: 1. Audited financial statements will be sent to shareholders on Wednesday 14 June 2000. Copies of this announcement are available at the Company's registered office at Bypass Road, Barking, Essex, IG11 0AZ and copies of the audited financial statements will be so available for at least 14 days from Wednesday 14 June 2000. 2. The Company's financial statements for 2000, from which the figures contained in this statement have been extracted, have not yet been reported on by the Company's auditors or filed with the Registrar of Companies. The financial statements for 1999, from which the figures contained in this preliminary statement have been extracted and restated, have been filed and contain an unqualified audit report with no reference to section 237 of the Companies Act 1985.

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