Final Results
Acal PLC
19 June 2006
FOR RELEASE 7:00AM 19 JUNE 2006
ACAL plc
(Leading pan-European, value-added technology based distributor
providing specialist design-in, sales and marketing services)
Announcement of Preliminary Results
for the Year Ended 31 March 2006
£millions 2006 2005 Change
(restated**)
-----------------------------------------------------------------------
Turnover - Continuing operations 257.0 243.7 +5%
-----------------------------------------------------------------------
EBIT* - Continuing operations 9.9 11.4 -13%
-----------------------------------------------------------------------
Profit before tax
Continuing operations 8.4 9.9 -15%
Including discontinued operations 9.7 11.1 -13%
-----------------------------------------------------------------------
Basic earnings per share
Continuing operations 19.1p 23.6p -19%
Including discontinued operations 22.3p 26.6p -16%
-----------------------------------------------------------------------
Dividends per share - relating to period 21.6p 21.6p -
-----------------------------------------------------------------------
• Sales of continuing operations up 5.5% at £257m, with growth in
all divisions
• EBIT down 13.2% at £9.9m, with the decline almost entirely in the
first half, and a recovery to £5.8m in the second half
• Progress continuing in obtaining new product lines and extending
geographic coverage of existing ones for Electronic Components
• IT Parts Services benefits from developing trend towards
outsourcing of parts procurement and management
• Agreement announced in May 2006 for sale of Air Conditioning and
Refrigeration business for an initial consideration of £8m.
• Total dividends for year maintained at 21.6p per share
* EBIT - Earnings before interest, tax, the Group's share of profit of
associated companies and exceptional items
** The restatement of the prior year's figures arises from the adoption of IFRS,
the reclassification of the Air Conditioning and Refrigeration activities as
discontinued, in the light of their sale, and the reallocation of central costs
following that reclassification
For further information:-
Tony Laughton - Chief Executive 01483 544500
Jim Virdee - Finance Director 01483 544500
Brian Coleman-Smith/Nia Thomas/Allison Reid
Cubitt Consulting 020 7367 5100
Notes to Editors:
1 The Acal Group is a leading European, value-added technology based
distributor providing specialist design-in, sales and marketing, as well
as stock planning and procurement services in the fields of Electronic
Components, IT Parts Services and IT Solutions. Its value-added
philosophy and geographic coverage enables Acal to provide specialist
knowledge and support to customers on a pan-European basis.
2 Design-in is the process by which Acal's sales engineers work with
customers and suppliers to procure components which meet the specific
technical and performance needs of the customers.
3 Acal has operating companies in the UK, Netherlands,Belgium, Germany,
France, Italy, Spain and Scandinavia. Westech Electronics, an
associated company, is based in Singapore and covers the Far East region.
CHAIRMAN'S STATEMENT
Having completed my first year as Chairman, I am pleased to report that
following a strategic review, in which the Board formulated its plan for
developing the business over the medium term, Acal has made good progress during
the second half-year.
On 25 May 2006 Acal began the process of rationalising the Group and announced
the disposal of its air conditioning and refrigeration business for a
consideration of £8m subject to an adjustment based upon the net tangible assets
at completion. This business has been treated as discontinued in the accounts.
Year-on-year sales growth of the continuing businesses was 5.5% - the second
half showing growth of 7.5% over the corresponding period in the prior year -
reflecting second half order growth of 11% over the first. EBIT for the year
fell 13.2% to £9.9m. However EBIT for the second half at £5.8m was a significant
improvement on the first and down only 2% on the same period last year. The
Group's continuing businesses made a 30% return on average capital employed.
Costs have remained under close scrutiny with further selective rationalisation
of back office/ logistics functions and continued selective headcount reductions
achieved across all businesses. The company has also prepared itself for the
introduction of RoHS (Restriction of Hazardous Substances) legislation, which
comes into effect in July 2006, minimising risks to the business.
Profit before taxation of the continuing businesses fell from £9.9m to £8.4m.
Dividend
The Board is recommending a final dividend of 14.4p per share, unchanged from
last year, payable to shareholders on the register at 30 June 2006. Together
with the interim dividend of 7.2p it will make a total of 21.6p for the year,
again unchanged from 2005.
Corporate Governance
Acal continues to strive for high standards of governance, details of which will
be given in the governance statement included as part of the Annual Reports &
Accounts.
Board Composition
As reported last year, Rhys Williams stood down as a Non-executive Director on
20 July 2005. At that time, Eric Barton became Acal's Senior Independent
Director and Graham Williams became Chairman of the Remuneration Committee. The
Board considers that as currently constituted and for a Company of Acal's size,
an appropriate balance of skills is available. For this reason a replacement for
Rhys Williams has not been sought.
Employees
Despite the tough competitive environment in which Acal continues to trade, the
efforts of its hard working and loyal workforce have been very apparent and much
appreciated by the Board.
The Future and Strategy
Acal's Electronic Component activities continued to show sales growth in 2006
with a number of franchise wins during the year in both the UK and Europe. Our
strategy for this business is to continue to focus on demand creation and
extension of the product range with a view to increasing market share and
consolidating Acal's position as the only pan-European demand creation
distributor.
The IT Parts Services business has enjoyed a good year with a number of contract
wins. With service organisations increasingly outsourcing their parts
management, procurement and logistics to third parties, we look to build upon
our success and attract more customers to this model.
We have renamed our IT Products business ' IT Solutions' to reflect our
marketing philosophy of offering customers business solutions rather than just
supplying hardware. The IT market remains highly competitive and our emphasis
will be upon maintaining margins and improving profitability coupled with
continued enhancement of the product portfolio. This division now includes our
small medical imaging and diagnostic equipment business.
Across the Group we will continue to strive for more effective and efficient
back office, logistics and support functions.
Acal's strategy is to continue to increase its market share and not rely upon
improvement in market conditions. We believe this strategy will return Acal to a
path of profitable growth with Electronic Components and IT Parts Services as
the main contributors.
Richard Moon
19 June 2006
CHIEF EXECUTIVE'S REVIEW
Introduction
The past year has seen an increase in sales in all divisions and for the Company
as a whole, up from £260.7m to £275.4m with EBIT down from £12.6m to £11.2m. The
continuing businesses increased sales 5.5% from £243.7m to £257.0m with EBIT
down from £11.4m to £9.9m. Growth in sales came in the second half of the year
which in total was 15% up on the first half, reflecting the execution of our
plans to develop major differentiation between Acal and others in our markets:
in Electronic Components and IT Solutions we have added a number of new world
class suppliers, and in IT Parts Services we have extended our capability to
manage outsourced supplies of IT parts and services.
The reduction in EBIT results primarily from increased reorganisation costs, a
bad debt and inventory obsolescence arising from the RoHS Directive, amounting
in aggregate to £1.7m.
We have begun the process of rationalising the Group with the sale of our Air
Conditioning and Refrigeration Components division announced in May.
Performance Review Table
The performance of Acal's continuing divisions in each of the years ended 31
March 2006 and 2005 is set out below:-
2006 2005
(restated**)
Sales EBIT* Sales EBIT
as % of as % of as % of as % of
£m Group £m Sales £m Group £m Sales
-----------------------------------------------------------------------------------
Electronic
Components 104.0 41% 2.4 2.3% 100.1 41% 3.4 3.4%
IT Parts
Services 56.9 22% 5.2 9.1% 51.3 21% 4.6 9.0%
IT Solutions 96.1 37% 2.3 2.4% 92.3 38% 3.4 3.7%
------- ------- ------- ------- ------- ------- ------- -------
257.0 100% 9.9 3.9% 243.7 100% 11.4 4.7%
------- ------- ------- ------- ------- ------- ------- -------
* EBIT = Earnings before interest, tax, the Group's share of profit of
associates and exceptional items, stated after full allocation of central costs.
** The restatement of the prior year's figures arises from the adoption of
International Financial Reporting Standards, the reclassification of the Air
Conditioning and Refrigeration activities as discontinued, in the light of their
sale, and the reallocation of central costs following that reclassification
Electronic Components
"The only 'Pan-European Demand Creation Distributor"
The Electronic Components Division, our largest, continues to develop and grow
with sales up 3.9% from £100.1m to £104.0m but a 29% reduction in EBIT from
£3.4m to £2.4m. EBIT was affected by a charge of £1.2m, £0.6m by way of RoHS
stock provision and £0.6m in increased reorganisation costs. The sales growth
was primarily from our technology products which comprise semiconductors, power
components, system components and microwave and wireless products. Concentration
in this area has led to Acal being appointed by a number of world class
manufacturers, including Actel, Linear Technology, Microchip and Vicor, as their
partner to develop sales in many European countries. It has also put us in the
unique position of being the leading demand creation distributor in Europe.
With an increasing number of suppliers working with Acal across Europe we have
commenced centralising our back office and logistics facilities in order to
improve efficiency and reduce our cost base. We are however increasing our
customer-facing resources to cater for the enlarged product portfolio and
growing customer base.
IT Parts Services ('ITPS')
"Europe's premier IT Parts Management Company"
IT Parts Services had an excellent year overall with sales rising 10.9% from
£51.3m to £56.9m and EBIT 13% from £4.6m to £5.2m. The growth came from ATM
Parts and Computer Parts International which were acquired in 2002 and 2003
respectively. The major areas of expansion for these businesses were largely, as
anticipated, the introduction of new product in ATM and CPI's success in
attracting more service organisations to outsource procurement and supply of IT
parts - a capability that has made ITPS "Europe's premier IT Parts Management
Company".
IT Solutions
"Europe's Niche IT Solutions Distributor"
Although we have succeeded in growing sales 4.1% from £92.3m to £96.1m, this has
been the most challenging of our businesses. EBIT has declined 32% from £3.4m to
£2.3m, having been affected by a £0.2m RoHS stock provision and a £0.3m bad debt
provision.
Profit was also reduced by pressure on both price and margin in our storage
networking products where unit prices have come down by as much as 30%
year-on-year and although now stabilised, show little prospect of improvement in
the core host bus adapter market. However, new products for this market from
CISCO, who have appointed Acal as an exclusive distributor for their MDS family
of products in Europe, recognises our competence and provides an excellent
opportunity to return to growth.
Headway, our Document Management and Imaging Product group and the Networking
and Security group achieved growth in sales and the latter in particular turned
in an excellent performance meeting our expectations. Both also have new product
offerings although it is too early to quantify the timing and benefit in revenue
and margin.
Vertec, our small Medical Instrumentation business, which was previously
included in Industrial Controls, is now allocated to IT Solutions as a result of
the discontinued classification of the AC&R activities which were the dominant
part of Industrial Controls.
Air Conditioning and Refrigeration
As previously mentioned this business is being sold to our major supplier,
Parker Hannifin Corporation, and I would like to thank all those who will be
leaving us and wish them all every success in the future. We had got to know
Parker well since 2004 when they acquired Sporlan Valve Co. and I have no doubt
that with their breadth of product capability there will be ample scope for
further successes.
Acal Infrastructure
Continuing consolidation and centralisation of many 'back office' functions of
our Electronic Components and IT Solutions Divisions has resulted in
considerable change to our own IT and logistic processes during the past year. I
am pleased to report that the changes have increased our efficiency and customer
support without any disruption to the service that we provide to our customers.
Acal People
The last three years have seen considerable change in the markets in which we
operate and it is to the credit of large numbers of Acal people that we are now
successfully executing the strategy which has been developed. I take this
opportunity to thank them all.
Tony Laughton
19 June 2006
FINANCE DIRECTOR'S REVIEW
Results for the Year
Acal adopted International Financial Reporting Standards - IFRS - for the first
time during the year ended 31 March 2006. The prior year's figures have been
restated to reflect this change as well as the reclassification of the Group's
Air Conditioning and Refrigeration business as discontinued in the light of its
sale, which was announced on 25 May 2006, and the reallocation of central costs
following this reclassification.
Sales from continuing activities increased from £243.7m in 2005 to £257.0m in
the year ended 31 March 2006, an overall increase of 5.5%, with each of the
Group's divisions showing sales growth as compared to the prior year. Earnings
before interest, tax, the Group's share of profit of associated companies and
exceptional items ("EBIT") reduced from £11.4m in 2005 to £9.9m in the year
ended 31 March 2006, an overall decline of 13.2%. This decline arose from a
reduction in the average gross margin and an increase in net operating expenses
as explained below.
The table below shows the Group's performance in the first and second halves
each of the last two years.
Year Ended 31 March
2006 2005 (restated)
Continuing business 1st Half 2nd Half Total 1st Half 2nd Half Total
-------- -------- ----- -------- -------- -----
£m
Sales 119.8 137.2 257.0 116.1 127.6 243.7
EBIT 4.1 5.8 9.9 5.5 5.9 11.4
This shows that the second half of the year to 31 March 2006 saw a significant
recovery which was achieved by growing product coverage and increasing market
share, against a generally difficult market background.
Overall the average gross margin during the year to 31 March 2006 was 25.3%
(2005: 26.7%). The main reasons for this decline were:
• A higher level of stock provisions, in particular provisions of £0.8m in
connection with the RoHS (Restriction of Hazardous Substances) Directive.
• The continuing margin pressure in the Group's IT Solutions business,
particularly in relation to Storage Area Networking products.
• The changing "mix" of sales in the Electronic Components business which
has seen significant growth in sales of specialist semiconductor products
and a reduction, in line with the general market, in sales of higher margin
passive and electromechanical components.
Net operating expenses of the Group's continuing business, excluding exceptional
items, were £55.2m for the year ended 31 March 2006 (2005: £53.8m). The major
factors contributing to the change were an increase of £0.6m in redundancy and
reorganisation costs as well as a provision of £0.3m against a receivable. If
these two specific factors are excluded the increase was less than 1%. The
average number of employees working in the Group's continuing businesses during
the year to 31 March 2006 was similar to that in the previous year at 954 (2005:
955). During this period Acal has continued to invest in additional resources to
support the strategy of growing its specialist semiconductor product coverage
and the winning of new customers in the IT Parts Services business.
There were two exceptional items arising during the year to 31 March 2006: a
profit of £0.6m on the sale of an investment and a cost of £0.8m incurred in
withdrawing from a part of the IT Solutions business. This activity contributed
£2.7m to the sales of the IT Solutions business during the year with no material
contribution to profit.
The year under review saw Sterling, on average, marginally (0.1%) stronger
against the Euro and 3.9% weaker against the US Dollar as compared to the prior
year. Accordingly exchange rates had an insignificant effect on the Group's
sales and profits for the year to 31 March 2006 when compared to the prior year.
Acal's main associated company is Westech, which has its head office in
Singapore and which distributes electronic components throughout the Far East
excluding Japan. Its sales grew from S$119m (approximately £38.5m) for the year
ended 31 March 2005 to S$255m (approximately £86.3m). A significant proportion
of this increase in sales related to lower margin fulfilment business and
therefore the percentage growth in profits was lower. This, together with the
sale of the Group's interest in its South African associate towards the end of
the prior year, led to Acal's share of profits of associated companies, which
under IFRS is reported after tax, being unchanged at £0.4m.
Net interest cost for the year was £1.6m (2005: £1.7m) before IAS19 financing
cost of £0.1m (2005: £0.2m), reflecting the slightly lower average level of debt
and slightly higher interest rates during the year. The net interest cost was
covered 6.2 times (2005: 6.7 times) by operating profit (before exceptional
items) from continuing activities.
The Group's effective tax rate for the year to 31 March 2006 was 33.8% (2005:
34.7%) when calculated on profit before taxation excluding the Group's share of
post tax profit from associates.
Earnings per share for the year to 31 March 2006 were 22.3p (2005: 26.6p).
The interim and proposed final ordinary dividends for the year will absorb £5.7m
(2005: £5.7m) and are covered 1.05 times (2005: 1.23 times).
Working Capital and Balance Sheet
The Group places particular emphasis on the management of working capital. For
this purpose Acal uses a model which is based on comparing each item of trading
assets to the three-month moving average of sales (TMMA). The table below shows
the target model and how the actual position compared with the model.
31 March
Continuing Target 2006 2005
Business TMMA TMMA TMMA
ratio Ratio Ratio
Trading fixed assets 0.5 0.5 0.6
Current assets:
Stock 1.2 0.9 1.1
Debtors 2.3 2.4 2.5
Current liabilities:
Creditors (2.2) (2.4) (2.5)
Tax (0.1) (0.1) (0.1)
------- ------- -------
Total trading assets 1.7 1.3 1.6
------- ------- -------
(Note: This trading assets model excludes goodwill, investments, non-current tax
assets, net debt/cash and long term liabilities).
The table above shows, for example, that our target is for stock to represent
1.2 months of sales and the actual level of stock at 31 March 2006 represented
0.9 months.
The level of working capital at 31 March 2006 benefitted from a number of
short-term factors which were not sustainable and will reverse in the period
after the year-end. This effect is estimated to have amounted to around £8m to
£9m and was reflected in the abnormally low level of net debt, £6.5m (2005:
£12.3m) at the year end. There was a similar short-term benefit of around £4m to
£5m at 31 March 2005.
The Group's debt is provided principally by bilateral bank facilities negotiated
centrally in the UK as well as locally at the operating companies. There are
committed long term facilities of around £25m available to the Group in addition
to short-term facilities which are used mainly for working capital needs.
Capital expenditure for the year was £2.5m (2005: £2.3m) with depreciation and
amortisation of fixed assets amounting to £3.2m (2005: £3.2m). An aggregate
amount of £0.4m was paid by way of the final instalment of the consideration for
the acquisition of Mecodis SA and the purchase of a small proportion of the
minority shareholding in CPI which is part of the Group's IT Parts Services
business.
It has always been Acal's policy that its pension schemes should be of the
defined contribution type so that the extent of the Group's financial
liabilities can be clearly ascertained. However, when Sedgemoor Limited, then a
listed public company, was acquired in June 1999, it brought with it certain
defined benefit schemes, the principal one of which was the Sedgemoor Group
Pension Fund (together "the Sedgemoor Scheme"). Soon after acquisition the
Sedgemoor Scheme was curtailed and all future service accrual ceased. A
triennial actuarial valuation of the Sedgemoor Scheme was conducted as at 31
March 2006. At that date the gross pension liability under IAS19 was £9.1m
(2005: £6.4m) and net of the relevant deferred tax it was £6.4m (2005: £4.5m).
The increase in the pension liability has arisen principally from movements in
bond yields and the adoption of updated mortality assumptions.
Shareholders funds at 31 March 2006 were £69.9m (2005: £71.3m), the reduction
from last year having arisen from the increase in pension liability explained
above. Net debt at the same date represented 9.3% of shareholders funds as
compared to 17.3% a year earlier.
Return on Capital Employed
Return on average capital employed of the Group's continuing businesses (which
is calculated using operating profit before exceptional items and net assets
excluding goodwill but adding back net debt) was 30% as compared to 32% in the
year before.
Jim Virdee
19 June 2006
consolidated income statement
for the year to 31 March 2006
note 2006 2005
£m £m
---------------------------------------------------------------------
Continuing operations
Revenue 3 257.0 243.7
---------------------------------------------------------------------
Operating profit 9.7 11.4
---------------------------------------------------------------------
Analysed between:
Operating profit before exceptional
items 3 9.9 11.4
Exceptional items - profit on
disposal of investments 5 0.6 -
Exceptional items - product
withdrawal costs 5 (0.8) -
---------------------------------------------------------------------
Share of post-tax profits of
associates 0.4 0.4
Finance costs (2.3) (2.5)
Finance revenue 0.6 0.6
---------------------------------------------------------------------
Profit before tax 8.4 9.9
---------------------------------------------------------------------
Analysed between:
Profit before taxation before
exceptional items 8.6 9.9
Exceptional items - profit on
disposal of investments 5 0.6 -
Exceptional items - product
withdrawal costs 5 (0.8) -
---------------------------------------------------------------------
Corporation tax expense:
United Kingdom taxation (2.6) (3.1)
Overseas taxation (0.1) (0.2)
---------------------------------------------------------------------
(2.7) (3.3)
---------------------------------------------------------------------
Profit after taxation for the year
from continuing operations 5.7 6.6
Discontinued operations
Profit for the year from discontinued
operations 6 0.9 0.8
---------------------------------------------------------------------
Profit for the year 6.6 7.4
---------------------------------------------------------------------
attributable to:
Equity holders of the parent 6.0 7.0
Minority interests 0.6 0.4
---------------------------------------------------------------------
6.6 7.4
---------------------------------------------------------------------
Dividends proposed per share in
respect of the period
Interim 7.2p 7.2p
Final 14.4p 14.4p
---------------------------------------------------------------------
Total 21.6p 21.6p
---------------------------------------------------------------------
2006 2005
Earnings per share Continuing Total Continuing Total
operations operations operations operations
---------------------------------------------------------------------------
Basic for profit for the year 19.1p 22.3p 23.6p 26.6p
Diluted for profit for the year 19.1p 22.3p 23.6p 26.6p
consolidated balance sheet
at 31 March 2006
2006 2005
£m £m
-------------------------------------------------------------------------
Non-current assets
Property, plant and equipment 6.7 6.9
Goodwill 48.8 48.7
Intangible assets - software 4.8 5.7
Investments in associates 4.7 3.9
Other financial assets 0.3 2.2
Deferred tax assets 4.0 2.1
-------------------------------------------------------------------------
69.3 69.5
-------------------------------------------------------------------------
Current assets
Inventories 21.4 25.5
Trade and other receivables 58.0 55.6
Current tax assets 1.7 0.9
Cash and cash equivalents 16.9 15.9
-------------------------------------------------------------------------
98.0 97.9
Current liabilities
Trade and other payables (58.0) (56.0)
Short-term borrowings (11.2) (8.0)
Current tax liabilities (3.7) (1.9)
Provisions (1.0) (0.7)
-------------------------------------------------------------------------
(73.9) (66.6)
-------------------------------------------------------------------------
Net current assets 24.1 31.3
Assets of discontinued operations
classified as held for sale 6.2 -
Non-current liabilities
Long-term borrowings (12.2) (20.2)
Pension liability (9.1) (6.4)
Deferred tax liabilities (1.8) (1.5)
Provisions (0.7) (0.2)
-------------------------------------------------------------------------
(23.8) (28.3)
-------------------------------------------------------------------------
Liabilities of discontinued operations
classified as held for sale (4.1) -
-------------------------------------------------------------------------
Net assets 71.7 72.5
-------------------------------------------------------------------------
Equity
Share capital 1.3 1.3
Share premium account 38.0 38.0
Share scheme reserve 0.2 0.1
Other reserves 1.8 1.1
Retained earnings 28.6 30.8
-------------------------------------------------------------------------
Equity attributable to equity
holders of the parent 69.9 71.3
Minority interests 1.8 1.2
-------------------------------------------------------------------------
Total equity 71.7 72.5
-------------------------------------------------------------------------
consolidated cash flow statement
for the year to 31 March 2006
2006 2005
£m £m
-----------------------------------------------------------------
Profit for the year
Continuing operations 5.7 6.6
Discontinued operations 0.9 0.8
-----------------------------------------------------------------
6.6 7.4
Taxation expense (includes £0.4m (2005:
£0.4m) from discontinued operations) 3.1 3.7
Share of results of associates (0.4) (0.4)
Net finance costs 1.7 1.9
Depreciation of property, plant and equipment 2.1 2.3
Amortisation of intangible assets -
software 1.1 0.9
Change in provisions 0.7 (0.2)
Gain on disposal of investments (0.6) -
Gain on disposal of property, plant and
equipment (0.1) (0.4)
Pension scheme funding (0.7) (0.7)
Equity-settled share-based payment expense 0.1 0.1
-----------------------------------------------------------------
Operating cash flows before changes in
working capital 13.6 14.6
-----------------------------------------------------------------
Decrease/(increase) in inventories 2.1 (1.3)
(Increase)/decrease in trade and other
receivables (5.7) 0.6
Increase in trade and other payables 5.9 3.0
-----------------------------------------------------------------
Decrease in working capital 2.3 2.3
-----------------------------------------------------------------
Cash generated from operations 15.9 16.9
Interest paid (2.1) (2.5)
Income taxes paid (2.9) (3.9)
-----------------------------------------------------------------
Net cash flows from operating activities 10.9 10.5
-----------------------------------------------------------------
Cash flows from investing activities
Acquisition of subsidiary (0.4) (2.3)
Proceeds from sale of associate - 0.4
Proceeds from sale of investments 2.5 -
Purchases of property, plant and equipment (2.2) (1.5)
Proceeds from sale of property, plant and
equipment 0.3 1.0
Purchases of intangible assets (0.3) (0.7)
Interest received 0.6 0.6
Dividends received from associates 0.1 0.3
-----------------------------------------------------------------
Net cash inflow/(outflow) from investing
activities 0.6 (2.2)
-----------------------------------------------------------------
Cash flows from financing activities
Proceeds from issue of ordinary shares - 0.2
Repayments of borrowings (3.1) (0.1)
Dividends paid to company's shareholders (5.7) (5.6)
Dividends paid to minority interests - (0.1)
-----------------------------------------------------------------
Net cash outflow from financing activities (8.8) (5.6)
-----------------------------------------------------------------
Net increase in cash and cash equivalents 2.7 2.7
Cash and cash equivalents at 1 April 8.0 5.2
Effect of exchange rate fluctuations 0.1 0.1
-----------------------------------------------------------------
Cash and cash equivalents at 31 March 10.8 8.0
-----------------------------------------------------------------
Reconciliation to cash and cash equivalents
in the balance sheet
Cash and cash equivalents shown above 10.8 8.0
Add back overdrafts 6.1 7.9
-----------------------------------------------------------------
Cash and cash equivalents shown within
current assets in the balance sheet 16.9 15.9
-----------------------------------------------------------------
consolidated statement of recognised income and expense
for the year to 31 March 2006
2006 2005
£m £m
------------------------------------------------------------
Actuarial loss on defined benefit
pension scheme (3.4) -
Deferred tax relating to pension scheme 0.8 (0.2)
Investments - cumulative fair value
adjustments taken to income statement
on disposal (0.4) -
Foreign currency translation
differences 0.7 0.3
------------------------------------------------------------
Net income and expense recognised
directly in equity (2.3) 0.1
Profit for the year 6.6 7.4
------------------------------------------------------------
Total recognised income and expense for
the year 4.3 7.5
Restatement for the effects of IAS 32
and 39 (i) 0.4 -
------------------------------------------------------------
Total recognised income and expense 4.7 7.5
------------------------------------------------------------
Total recognised income and expense
attributable to:
Equity holders of the parent 4.1 7.1
Minority interests 0.6 0.4
------------------------------------------------------------
4.7 7.5
------------------------------------------------------------
(i) On 1 April 2005, the balance sheet was restated for the effects of IAS 32
and 39.
reconciliation of movements in shareholders' equity
for the year to 31 March 2006
2006 2005
£m £m
------------------------------------------------------------
Shareholders' equity at start of year 71.3 69.6
Total recognised income and expense 4.1 7.1
Dividends (5.7) (5.6)
Share capital issued - 0.2
Share-based payments 0.1 0.1
Movements in associates' reserves 0.1 (0.1)
------------------------------------------------------------
Shareholders' equity at end of year 69.9 71.3
------------------------------------------------------------
Notes to the preliminary statement
for the year ended 31 March 2006
1 Publication of non-statutory accounts
The preliminary results were approved by the Board on 19 June 2006. The
financial information set out above does not constitute the Company's statutory
accounts for the year ended 31 March 2006 or 2005, but is derived from those
accounts. Statutory accounts for 2005 have been delivered to the Registrar of
Companies whereas those for 2006 will be delivered following the Company's
Annual General Meeting. The auditors have reported on those accounts; their
reports were unqualified and did not contain a statement under section 237 (2)
or (3) of the Companies Act 1985.
2 Basis of preparation
EU law (IAS Regulation EC 1606/2002) requires that the annual consolidated
financial statements of the Group, for the year to 31 March 2006, be prepared in
accordance with IFRS adopted for use in the EU ('Adopted IFRS'). These results
represent the first annual financial statements prepared in accordance with
IFRS. The comparative figures for the year to 31 March 2005 have been restated
to reflect the transition to IFRS as set out in note 10. The accounting policies
adopted are shown on the company's website at www.acalplc.co.uk.
3 Segmental analysis
Year to 31 March 2006
Electronic IT Parts IT Total
components Services Solutions Unallocated continuing Discontinued Total
operations operations operations
£m £m £m £m £m £m £m
----------------------------------------------------------------------------------------------
Revenue 104.0 56.9 96.1 - 257.0 18.4 275.4
----------------------------------------------------------------------------------------------
Segment result 3.5 6.0 3.6 (3.2) 9.9 1.3 11.2
Exceptional items:
-Profit on
disposal of
investments - - - 0.6 0.6 - 0.6
-Product
withdrawal
costs - - (0.8) - (0.8) - (0.8)
Net finance costs - - - (1.7) (1.7) - (1.7)
Share of post-tax
profits of
associates 0.4 - - - 0.4 - 0.4
----------------------------------------------------------------------------------------------
Profit before
taxation 3.9 6.0 2.8 (4.3) 8.4 1.3 9.7
Taxation (2.7) (0.4) (3.1)
----------------------------------------------------------------------------------------------
Profit for the year 5.7 0.9 6.6
----------------------------------------------------------------------------------------------
Year to 31 March 2005
Total
Electronic IT Parts IT continuing Discontinued Total
components Services Solutions Unallocated operations operations operations
£m £m £m £m £m £m £m
----------------------------------------------------------------------------------------------
Revenue 100.1 51.3 92.3 - 243.7 17.0 260.7
----------------------------------------------------------------------------------------------
Segment result 4.7 5.0 4.4 (2.7) 11.4 1.2 12.6
Net finance costs - - - (1.9) (1.9) - (1.9)
Share of
post-tax
profits of
associates 0.4 - - - 0.4 - 0.4
----------------------------------------------------------------------------------------------
Profit before
taxation 5.1 5.0 4.4 (4.6) 9.9 1.2 1.1
Taxation (3.3) (0.4) (3.7)
----------------------------------------------------------------------------------------------
Profit for the year 6.6 0.8 7.4
----------------------------------------------------------------------------------------------
4 Geographic analysis of revenue by destination
2006 2005
£m £m
------------------------------------------------------------------------
United Kingdom 114.0 108.0
Continental Europe 136.8 128.1
Rest of the World 6.2 7.6
------------------------------------------------------------------------
257.0 243.7
------------------------------------------------------------------------
5 Exceptional items
2006 2005
£m £m
------------------------------------------------------------------------
Other operating income:
Profit on disposal of investments 0.6 -
------------------------------------------------------------------------
Other operating expenses:
Product withdrawal costs (0.8) -
------------------------------------------------------------------------
6 Discontinued operations
A contract for the disposal of the Air Conditioning and Refrigeration business
was signed on 25 May 2006 with completion expected before the end of July 2006.
The results of this business have been shown separately under discontinued
operations and its assets and liabilities classified as held for sale.
The profit for the year from discontinued operations is derived as follows:
2006 2005
£m £m
------------------------------------------------------------------------
Revenue 18.4 17.0
Expenses (17.1) (15.8)
------------------------------------------------------------------------
Profit before financing and tax 1.3 1.2
Finance costs (net) - -
------------------------------------------------------------------------
Profit before tax 1.3 1.2
Income tax expense (0.4) (0.4)
------------------------------------------------------------------------
Profit for the year from discontinued operations 0.9 0.8
------------------------------------------------------------------------
7 Dividends
The Directors have proposed a final dividend of 14.4 pence per share, payable on
11 August 2006 to shareholders on the register at 30 June 2006. In accordance
with IAS 10, this dividend has not been reflected in the balance sheet at 31
March 2006. The amount of this final dividend is £3.8 million. An interim
dividend of 7.2 pence per share was paid in January 2006, and the cost of this
dividend was £1.9 million.
8 Earnings per share
Basic earnings per share is calculated by dividing the net profit for the year
attributable to ordinary shareholders of by the weighted average number of
ordinary shares outstanding during the year.
Diluted earnings per share is the basic and adjusted earnings per share after
allowing for the dilutive effect of the conversion into ordinary shares of the
weighted average number of options outstanding during the period.
The following reflects the income and share data used in the basic and diluted
earnings per share calculations:
2006 2005
million million
------------------------------------------------------------------------
Weighted average number of shares for basic
earnings per share 26.4 26.4
Effect of dilution - share options - -
------------------------------------------------------------------------
Adjusted weighted average number of shares for
diluted earnings per share 26.4 26.4
------------------------------------------------------------------------
2006 2005
£m £m
Profit attributable to equity holders of the parent 6.0 7.0
------------------------------------------------------------------------
9 Reconciliation of net cash flow to movements in net debt
2006 2005
£m £m
------------------------------------------------------------------------
Net increase in cash and cash 2.7 2.7
equivalents
Cash outflow from decrease in debt 3.0 0.1
Effect of exchange rate fluctuations 0.1 0.1
------------------------------------------------------------------------
Decrease in net debt 5.8 2.9
Net debt at beginning of the year (12.3) (15.2)
------------------------------------------------------------------------
Net debt at end of the year (6.5) (12.3)
------------------------------------------------------------------------
10 Explanation of transition to IFRS
A reconciliation of equity at 1 April 2004, the date of transition to IFRS, and
at 31 March 2005 was provided in the IFRS restatement document issued on 28
September 2005. A reconciliation of profit for the year ended 31 March 2005 was
also provided within that document. A copy of the restatement document can be
found on the Company's website at www.acalplc.co.uk. The comparatives reported
are unchanged from that statement except for an IAS 12 adjustment relating to
deferred tax on the retained earnings of associates, detailed below, the
reclassification of the revaluation reserve to retained earnings and, as
required under IFRS, the separate disclosure of the results, assets and
liabilities of discontinued operations.
IAS 12 requires that a deferred tax liability be recognised to reflect the tax
consequences that would follow from the distribution of profits by the Company's
associates. The Company has recognised an additional £0.3 million liability at 1
April 2004 and 31 March 2005. There is no impact on the result for the year to
31 March 2005.
11 Annual Report and Accounts
The Annual Report and Accounts will be mailed to shareholders on or before 7
July 2006. Copies will also be available from: -
Acal plc
2 Chancellor Court
Occam Road
Surrey Research Park
Guildford GU2 7AH
The results will not be advertised in any newspaper
Ends
This information is provided by RNS
The company news service from the London Stock Exchange
Monday, 20th May 2024
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