Interim Results
Acal PLC
06 December 2004
FOR RELEASE 7:00AM 6 DECEMBER 2004
ACAL plc
(Leading pan-European, value added distributor providing specialist design-in,
sales and marketing services for international suppliers)
Unaudited Interim Results for the six months to 30 September 2004
2004 2003 Change
Turnover £124.4m £127.1m -2%
-------------------------- ----------- ---------- --------
EBITA* (pre associated companies) £6.1m £6.5m -6%
-------------------------- ----------- ---------- --------
Profit before tax:- £5.5m £5.9m -7%
Before goodwill amortisation £3.9m £4.4m -11%
After goodwill amortisation
-------------------------- ----------- ---------- --------
Earnings per share:- 13.0p 14.1p -8%
Before goodwill amortisation 7.3p 8.5p -14%
After goodwill amortisation
-------------------------- ----------- ---------- --------
Dividends per share 7.2p 7.0p +3%
-------------------------- ----------- ---------- --------
12% growth in sales in the Components Divisions with EBITA* up 33%
Offset by 12% reduction in sales and 25% reduction in EBITA* in the IT
Divisions
Overall sales flat compared to last year at constant exchange rates
UK Electronic Components and IT Products activities being reorganised
Annualised pre-tax return of 30% on net trading assets for half year
Further dividend growth: interim dividend up 3% at 7.2p per share
John Curry to retire as Chairman after 18 years with the Company
(* EBITA = Earnings before interest, tax and amortisation of goodwill)
For further information:-
Tony Laughton - Chief Executive 01483 544500
Jim Virdee - Finance Director 01483 544500
Brian Coleman-Smith/Grace Marriner 020 7398 3300
Beattie Financial
Notes to Editors:
1 The Acal Group is a leading European, value-added
distributor providing specialist design-in, sales and marketing services for
international suppliers in the fields of Electronic Components, Information
Technology Products, IT Parts Services and Industrial Controls. 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, Scandinavia and the USA.
CHAIRMAN'S STATEMENT
The first half of this year has seen a continuation of the demanding market
conditions encountered last year. Despite the impact this has had on overall
sales, which are 2% lower at £124.4m (2003 : £127.1m), we continue to make an
adequate return on net trading assets (30% per annum for the half year) although
not an adequate profit return on sales. At constant exchange rates overall sales
were flat compared to last year. I am pleased to report 12% sales growth in the
Components divisions with EBITA up 33%, but this has been offset by a 12%
reduction in sales and 25% EBITA reduction in the IT divisions. The principal
reason for the reductions was a combination of competitive pressures on prices
and gross margins of existing IT products coupled with slower than expected
introduction of new products.
Results
Below is a table showing the results of each of Acal's divisions for the
half-year ended
30 September 2004.
2004/05 2003/4
--------Sales-------- ------------EBITA-------------- Sales EBITA
------ ------- ------ ------- -------- ------- ----- ----------
£m % change £m % change % of sales £m £m % of sales
Electronic 48.6 +11% 2.0 +25% 4.1% 43.7 1.6 3.7%
Components
------ ------ ----- ------ ------ ----- ---- -----
Industrial 10.0 +14% 0.8 +60% 8.0% 8.8 0.5 5.7%
Controls
------ ------ ----- ------ ------ ----- ---- -----
Components 58.6 +12% 2.8 +33% 4.8% 52.5 2.1 4.0%
TOTAL ------ ------ ----- ------ ------ ----- ---- -----
IT 41.2 -9% 1.2 -33% 2.9% 45.4 1.8 4.0%
Products
IT Parts
Services 24.6 -16% 2.1 -19% 8.5% 29.2 2.6 8.9%
------ ------ ----- ------ ------ ----- ---- -----
IT TOTAL 65.8 -12% 3.3 -25% 5.0% 74.6 4.4 5.9%
------ ------ ----- ------ ------ ----- ---- -----
124.4 -2% 6.1 -6% 4.9% 127.1 6.5 5.1%
Associates 0.3 0.2
------ ------ ----- ------ ----- ----
124.4 -2% 6.4 -4% 127.1 6.7
====== ====== ===== ====== ===== ====
The Electronics Components division performed in line with expectations in the
first half. Benefits are beginning to show with new supplier wins and current
suppliers extending our geographical coverage. There is some progress in the
defence, aerospace, security, medical and industrial markets, and even some
signs of improving activity in telecoms.
The Industrial Controls division continues to provide growth, particularly in
the Far East, with some help from the weaker dollar.
Within our IT Products division, after a period of sustained growth the Storage
Networking business is experiencing significant price erosion and margin
pressure which is preventing growth. However, it continues to produce
satisfactory returns as does the Document Imaging business although sales were
flat there. The other IT products, which include network and security offerings
as well as computer components in the Netherlands, have however experienced a
decline in both sales and profits.
In the IT Parts Services division, CPI continues to perform well and ATM has
moved to a new location and is now through the period of investment in new
management structures, facilities and IT systems. Changes in the channel
strategies of major OEMs continue to affect sales, particularly in Germany.
Although the division overall has shown a decline in sales, it continues to
produce satisfactory returns both on sales and net trading assets.
Dividend
The Board has declared an interim dividend of 7.2p net per share (7.0p), an
increase of 3%. This to be paid on 25 January 2005 to shareholders on the
register on 17 December 2004.
Board Changes
It was my intention to continue as Chairman for a couple more years but
unfortunately, ill health has affected these plans. I will retire by the AGM
after 18 years at the helm in partnership with Tony Laughton. Richard Moon
joined the Board earlier this year with the intention of taking over as Chairman
in due course. Events have accelerated the position and I am pleased to say he
will be appointed Non-Executive Deputy Chairman on 6 December 2004 with the
expectation that he will become Non-Executive Chairman on my retirement.
Richard Allen left the Board on 5 November 2004, having been with Acal since
1999 and on the Board since 2000. We thank him for his contribution over the
past five years and wish him well for the future.
Current Trading and Strategy
We are reorganising both our UK Electronic Components and IT Product businesses
to provide a broader product offering from each entity. When this is complete we
will have one UK IT Products operation whilst maintaining the specific focus of
Headway and Acal Storage Networking. In the Component business we are
amalgamating the two largest units in the UK to form what we expect to be one of
the most powerful specialist distributors in this sector. With the completion of
the implementation of our ERP system, this reorganisation should enable us to
save costs and achieve better utilisation of our back-office and support
functions.
The Components activities continue to show growth, although the recent order
pattern suggests that the rate of growth is slowing down.
Demand remains weak, and frequently volatile in the IT divisions. We are both
adding to and rationalising the products and services we are able to offer but
the financial benefits from this will take time to come through.
Although some indicators remain positive, overall it is uncertain whether we can
look forward to any sustained period of economic growth in our major markets.
Thus we believe it is appropriate to be cautious regarding the near term outlook
for growth.
We continue to take measures to enhance the service we provide to our customers
and suppliers and to improve our financial returns. Even though such measures
can reduce short-term profitability we believe they will strengthen the business
and in the medium to longer term enable us to improve our financial performance
by returning to growth in sales.
John Curry
6 December 2004
ACAL plc
Unaudited Summary Profit and Loss Account for
Six Months ended 30 September 2004
Six Months ended Year ended 31 March
30 September
2004 2003 2004
(audited)
£'m £'m £'m
Turnover
Ongoing activities 123.7 125.7 266.2
Operations terminated (note 3) - 1.4 2.7
Acquisition
(note 3) 0.7 - -
-------- -------- --------
124.4 127.1 268.9
======== ======== ========
Operating Profit
Excluding goodwill amortisation 6.1 6.5 14.2
Goodwill amortisation (1.6) (1.5) (2.9)
-------- -------- --------
Group Operating Profit (excluding
Associates) 4.5 5.0 11.3
Group Share of Operating
Profits of Associates 0.3 0.2 0.4
-------- -------- --------
Total Operating Profit (including
Associates)
Excluding goodwill amortisation 6.4 6.7 14.6
Goodwill amortisation (1.6) (1.5) (2.9)
-------- -------- --------
4.8 5.2 11.7
Loss on termination of operations - - (0.6)
Net interest payable and
similar charges (0.9) (0.8) (1.9)
Profit before Taxation
-------- -------- --------
Excluding goodwill amortisation 5.5 5.9 12.1
Goodwill amortisation (1.6) (1.5) (2.9)
-------- -------- --------
Profit on Ordinary Activities
before Taxation 3.9 4.4 9.2
Tax on Profit on Ordinary -------- -------- --------
Activities
United Kingdom (1.6) (1.8) (3.8)
Overseas (0.1) (0.1) (0.2)
Associates (0.1) (0.1) (0.2)
-------- -------- --------
(1.8) (2.0) (4.2)
-------- -------- --------
Profit after Taxation
Excluding goodwill amortisation 3.7 3.9 7.9
Goodwill amortisation (1.6) (1.5) (2.9)
-------- -------- --------
Profit on Ordinary Activities after
Taxation 2.1 2.4 5.0
Minority Interest (0.2) (0.2) (0.2)
-------- -------- --------
Profit Attributable to Ordinary
Shareholders 1.9 2.2 4.8
Dividends on Ordinary Shares (1.9) (1.8) (5.5)
-------- -------- --------
Retained Profit/(Loss)
for the Period - 0.4 (0.7)
======== ======== ========
Earnings per Share 7.3p 8.5p 18.4p
======== ======== ========
Diluted Earnings per Share 7.3p 8.4p 18.4p
======== ======== ========
Earnings per Share Excluding
Goodwill Amortisation 13.0p 14.1p 29.6p
======== ======== ========
Earnings per Share Excluding
Goodwill Amortisation and loss on
termination of operations 13.0p 14.1p 31.8p
======== ======== ========
Dividends per share 7.2p 7.0p 21.0p
======== ======== ========
ACAL plc
Unaudited Balance Sheet
as at 30 September 2004
At 30 September At 31 March
2004 2003 2004
(audited)
£'m £'m £'m
FIXED ASSETS
Intangible assets 47.3 49.0 46.9
Tangible assets 13.7 14.7 14.1
Investments 6.5 6.1 6.4
-------- -------- ---------
67.5 69.8 67.4
-------- -------- ---------
CURRENT ASSETS
Stocks 26.3 27.2 23.6
Debtors 48.9 48.2 50.8
Cash at bank and in hand 11.0 9.8 10.8
-------- -------- ---------
86.2 85.2 85.2
CREDITORS:
Amounts falling due within one year (58.8) (58.4) (57.6)
-------- -------- ---------
NET CURRENT ASSETS 27.4 26.8 27.6
-------- -------- ---------
TOTAL ASSETS LESS 94.9 96.6 95.0
CURRENT LIABILITIES
CREDITORS:
Amounts falling due after more than one year (20.3) (20.4) (20.3)
PROVISIONS FOR LIABILITIES (0.8) (0.6) (1.3)
AND CHARGES
-------- -------- ---------
NET ASSETS - excluding pension liability 73.8 75.6 73.4
Net pension liability (4.6) (5.7) (4.8)
-------- -------- ---------
NET ASSETS - including pension liability 69.2 69.9 68.6
======== ======== =========
CAPITAL AND RESERVES
Called up share capital 1.3 1.3 1.3
Share premium account 38.0 37.7 37.8
Revaluation reserve 0.3 0.3 0.3
Profit and loss account and other reserves 28.6 29.7 28.3
-------- -------- ---------
EQUITY SHAREHOLDERS' FUNDS 68.2 69.0 67.7
Minority interests (all equity) 1.0 0.9 0.9
-------- -------- ---------
TOTAL CAPITAL EMPLOYED 69.2 69.9 68.6
======== ======== =========
ACAL plc
Unaudited Summary Cash flow Statement for
Six Months ended 30 September 2004
Six Months ended 30 September Year ended 31 March
2004 2003 2004
£'m £'m (audited)
£'m
OPERATING ACTIVITIES
Group operating profit 4.5 5.0 11.3
Depreciation and amortisation 3.1 3.1 6.4
Profit on disposal of fixed assets - - (0.1)
(Increase)/decrease
in working capital (4.0) (2.1) 2.2
-------- -------- --------
NET CASH INFLOW FROM
OPERATING
ACTIVITIES 3.6 6.0 19.8
Dividends from associates 0.1 0.1 0.1
Net interest paid (0.9) (0.8) (1.8)
Tax paid (2.0) (3.6) (4.9)
Net expenditure on tangible fixed
assets and investments (1.2) (2.0) (3.9)
Net cash flow from acquisitions and
disposals (1.3) (6.7) (6.3)
Equity dividends paid (3.7) (3.5) (5.4)
-------- -------- --------
NET CASH OUTFLOW
BEFORE FINANCING (5.4) (10.5) (2.4)
Decrease in debt and finance
leases (0.1) (3.7) (3.8)
Issue of share capital 0.2 0.5 0.7
-------- -------- --------
NET DECREASE IN CASH (5.3) (13.7) (5.5)
======== ======== ========
Reconciliation of net cash flow to
movement in net debt
NET DECREASE IN CASH (5.3) (13.7) (5.5)
-------- --------
Cash outflow from decrease in debt
and lease financing 0.1 3.7 3.8
Translation differences - - (0.1)
-------- -------- --------
INCREASE IN NET DEBT (5.2) (10.0) (1.8)
Net debt at beginning
of the period (15.2) (13.4) (13.4)
-------- -------- --------
Net debt at end of
the period (20.4) (23.4) (15.2)
======== ======== ========
ACAL plc
Unaudited Statement of Total Recognised Gains and Losses
For Six Months ended 30 September 2004
Six Months ended 30 September Year ended 31 March
2004 2003 2004
(audited)
£'m £'m £'m
Profit attributable
to ordinary
shareholders 1.9 2.2 4.8
Actuarial gain on
pension scheme - - 1.2
Deferred tax relating
to pension scheme (0.1) - (0.5)
Net gain/(loss) on
currency translation 0.4 0.1 (1.0)
------ ------- --------
Total recognised
gains and losses for
the financial period 2.2 2.3 4.5
====== ======= ========
NOTES:
1. These interim results have been prepared in accordance with the accounting
policies normally adopted by the Company and are consistent with those
adopted at 31 March 2004.
2. The financial information for the year ended 31 March 2004 does not
constitute the Company's statutory accounts but is derived from those
accounts. Statutory accounts for 2004 have been delivered to the Registrar
of Companies. The auditors have reported on those accounts; their report was
unqualified and did not contain a statement under section 237 (2) or (3) of
the Companies Act 1985.
3. The closure of EAF Nederland BV was announced on 29 March 2004 and completed
during the half year ended 30 September 2004. The turnover of this operation
is shown under "Operations terminated". The loss on termination was recorded
in the year ended 31 March 2004. The acquisition of Mecodis SA was announced
on 16 July 2004. Its turnover is shown under "Acquisition". The impact of
the Operations terminated and the Acquisition on the operating profit of the
relevant periods was immaterial.
4. The interim dividend is payable on 25 January 2005 to shareholders on the
register on 17 December 2004.
5. Earnings per share for the half year to 30 September 2004 have been
calculated on the profit attributable to ordinary shareholders of £1,931,000
using the weighted average number of ordinary shares in issue during the
period.
6. The company's interim report is being sent to shareholders by post. Copies
will also be available at www.acalplc.co.uk or from:
Acal plc, 2 Chancellor Court, Occam Road, Surrey Research Park, Guildford,
Surrey, GU2 7AH
The interim results will not be advertised in any newspaper
Ends
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