Interim Results

Eleco PLC 12 March 2001 12 March 2001 ELECO PLC INTERIM RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2000 CHAIRMAN'S STATEMENT Despite the interruptions to our businesses in November and December, caused by the fuel blockade and the unusually adverse weather conditions in that period, the Group achieved an increase in turnover in the six months ended 31 December 2000 to £13,867,000 (1999: £12,335,000) of which £296,000 (1999: nil) was attributed to acquisitions made in the period. Operating profits were adversely affected by these special circumstances and amounted to £694,000 (1999: £737,000), including £102,000 from the newly acquired software systems businesses. After deducting net interest payable of £127,000 (1999: £60,000), profit on ordinary activities before tax for the six months was to £567,000 (1999: £677,000). Earnings per share amounted to 1.27p (1999: 1.45p). The Board has declared an interim dividend of 0.35p per share (1999: 0.35p), which will be payable on 9 May 2001 to shareholders on the register on 27 April 2001. The interim dividend is covered 3.5 times by earnings. Net borrowings during the period rose by £2,171,000. This movement included £ 713,000 in respect of acquisitions and £324,000 in respect of capital expenditure. Stocks and work in progress and other working capital at the end of the period had risen by more than the anticipated seasonal increase. This was caused mainly by weather related disruptions to our customers' activities in November and December and has since been largely reversed. I am pleased to be able to report on a number of commercial and other developments. 1. We acquired MBA Computing and Forma Communications. MBA Computing is a leading developer of AutoCAD based detailed design software for the house building industry and includes among its clients a number of the leading UK house builders. Forma Communications is a web related design and software developer, serving the education field and the construction industry. Its clients include the Department of Education and Redbus Interhouse. It also produced the well received SpeedDeck Designer 2 software. 2. The Vitesse composite panel production line has been fully brought into use at SpeedDeck and the first contracts using this new product have been completed. 3. Gang-Nail Systems has successfully introduced its Ecojoist flooring system, which is now backed up by design and engineering software developed by MBA Computing. 4. We have entered into an agreement with Zeta-Tech Associates Inc. of New Jersey, USA for the distribution of Zeta-Tech's range of railway track maintenance software. Trading Review Building Systems Bell & Webster Concrete, Gang-Nail Systems and SpeedDeck Building Systems were all to a greater or lesser degree affected by the disruption to their customers' businesses in November and December. Indications from their customers are that the normal flow of business is returning and orders are expected to improve. Stramit Industries made solid progress. Our South African nail plate business continued to make excellent progress. In contrast, our German nail plate business faired less well and performed significantly below last year's level due mainly to price pressures in that market. Software Systems MBA computing, which was acquired on 8 September 2000, has made a very encouraging contribution in its first reporting period as a member of the Group. Forma Communications was only acquired on 15 December 2000, had little opportunity to do likewise but I am delighted by the way both businesses have integrated into the Group and I fully expect them to be earnings enhancing in the current year. Rail & Marine Our rail and marine businesses suffered from a continuing shortage of orders particularly from the Ministry of Defence but there has been an increase in activity in the last two months. We continue to seek to add to the Abtus range of products. However, following its less than satisfactory performance over the past year, we are conducting a comprehensive review of Abtus' operations. Outlook The investment, which has been put in place in the past two years, has equipped Eleco to respond well to opportunities in its markets. Therefore, the key to our performance for the remainder of the year will be the extent to which our customers are able to make up the backlog of work that developed during the final two months of last year. John Ketteley Executive Chairman 9 March 2001 Enquiries to: John Ketteley, Executive Chairman 01992 440 311 Eleco plc David Dannhauser, Finance Director 01992 440 311 Eleco plc David Millham / Tarquin Edwards 020 7256 5756 Millham Communications Eleco plc Consolidated profit and loss account (Unaudited) (Audited) Half year ended Year ended 31 December 30 June 2000 1999 2000 £'000 £'000 £'000 Turnover Continuing operations 13,571 12,335 27,549 Acquisitions (Note 1) 296 - - 13,867 12,335 27,549 Operating profit Continuing operations 592 737 1,719 Acquisitions (Note 1) 102 - - 694 737 1,719 Profit/(loss) on disposal of tangible assets - - (53) Profit on ordinary activities before interest 694 737 1,666 Net interest payable (127) (60) (147) Profit on ordinary activities before tax 567 677 1,519 Tax on ordinary activities (61) (115) (131) Profit on ordinary activities after tax 506 562 1,388 Dividend on ordinary shares (Note 3) (143) (135) (387) Retained profit 363 427 1,001 Dividends per share 0.35p 0.35p 1.00p Earnings per share (Note 4) 1.27p 1.45p 3.59p Diluted earnings per share (Note 5) 1.25p 1.43p 3.53p Notes 1. On 8 September 2000, the group acquired the entire share capital of MBA Computing Limited. Goodwill on acquisition of £682,000 has been capitalised and included within fixed assets. £100,000 of the total consideration of £549,000 was settled by the issue of 333,330 new ordinary shares with the balance paid in cash. On 15 December 2000, the group acquired the entire share capital of Forma Communications Limited. Goodwill on acquistion of £699,000 has been capitalised and included within fixed assets. £546,000 of the total consideration of £681,000 was settled by the issue of 1,820,000 new ordinary shares with the balance paid in cash. 2. The interim results have been prepared on the basis of the accounting policies adopted for the year ended 30 June 2000, as set out in the Company's Annual Report and Accounts, except as modified by the adoption of the following standards: FRS 17 - Retirement Benefits FRS 18 - Accounting Policies The adoption of these standards has no effect on the results reported in either the current or previous period. 3. The dividend will be payable on 9 May 2001 to shareholders on the register on 27 April 2001. 4. Based on the profit attributable to shareholders and a weighted average of 39,937,219 ordinary shares (Dec 1999 - 38,629,731 and Jun 2000 - 38,631,517). 5. Based on the profit attributable to shareholders and a fully diluted weighted average of 40,600,754 ordinary shares (Dec 1999 - 38,228,643 and Jun 2000 - 39,325,776). The dilution is caused by outstanding share options. 6. The comparative figures for the year to 30 June 2000 have been taken from but do not constitute the Company's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. 7. Copies of this interim statement and results, which were approved by the Board on 9 March 2001, are available from the registered office of the Company, which is at Belcon House, Essex Road, Hoddesdon, Herts EN11 0DR. Eleco plc Summarised consolidated balance sheet (Unaudited) (Audited) 31 December 30 June 2000 1999 2000 £'000 £'000 £'000 Fixed assets (Note 1) 9,112 6,418 7,724 Current assets Stocks 2,349 1,644 2,107 Debtors 6,860 6,010 6,307 Cash and bank balances 572 666 469 9,781 8,320 8,883 Creditors falling due within one year Bank loans and overdrafts (2,823) (1,161) (905) Obligations under finance leases (205) (107) (154) Other creditors (5,766) (5,630) (6,740) Net current assets 987 1,422 1,084 Creditors falling due after more than one year Bank loans (1,340) (743) (1,073) Obligations under finance leases (232) (125) (194) Net assets 8,527 6,972 7,541 Capital and reserves Called up share capital 4,084 3,863 3,864 Share premium account 4,869 4,434 4,435 Merger reserve 367 367 367 Profit and loss account (793) (1,692) (1,125) Equity shareholders' funds 8,527 6,972 7,541 Reconciliation of movement in equity shareholders' funds Profit for the period 506 562 1,388 Dividends (143) (135) (387) Other recognised losses (31) (20) (27) Proceeds from issue of ordinary shares 8 - 2 Issue of ordinary shares on acquisition of subsidiaries 646 - - Net increase in equity shareholders funds 986 407 976 Opening equity shareholders' funds 7,541 6,565 6,565 Closing equity shareholders' funds 8,527 6,972 7,541 Eleco plc Consolidated cash flow statement (Unaudited) (Audited) Half year Year ended ended 31 December 30 June 2000 1999 2000 £'000 £'000 £'000 Net cash (outflow)/ inflow from operating activities (540) 938 2,557 Returns on investment and servicing of finance Net interest paid (127) (60) (147) Net cash outflow from returns on investment and servicing (127) (60) (147) of finance Taxation (12) (96) (193) Capital expenditure and financial investment Purchase of fixed assets (324)(1,333) (2,816) Sale of tangible fixed assets and investments 4 11 15 Net cash outflow from capital expenditure and financial (320)(1,322) (2,801) investment Acquisitions and disposals Purchase of subsidiaries (713) - - Net cash outflow from acquisitions and disposals (713) - - Equity dividends paid (252) (309) (444) Net cash outflow before financing (1,964) (849) (1,028) Financing New bank loans 500 - 500 Repayment of principal under finance leases (110) (72) (164) Repayment of bank loans (123) (545) (615) Issue of ordinary shares 8 - 2 Net cash inflow/ (outflow) from financing 275 (617) (277) Decrease in cash in the period (1,689)(1,466) (1,305) Reconciliation of operating profit to net cash flow from operating activities Operating profit 694 737 1,719 Depreciation charge 504 311 689 Amortisation of intangible assets 18 3 9 Profit on sale of fixed assets (1) (4) (7) Working capital (increase)/decrease (1,755) (109) 147 (540) 938 2,557 Reconciliation of net cash flow to movement in net debt Decrease in cash in the period (1,689)(1,466) (1,305) Cash (inflow)/outflow from (increase)/decrease in debt (267) 617 279 and lease financing Increase in net debt resulting from cash flows (1,956) (849) (1,026) New finance leases (191) (104) (312) Finance lease obligations acquired with subsidiaries (10) - - Translation difference (14) (15) (17) Increase in net debt in the period (2,171) (968) (1,355) Opening net debt (1,857) (502) (502) Closing net debt (4,028)(1,470) (1,857) Eleco plc Segmental analysis Group turnover and profits were attributable as follows External sales Profit/(loss) (Unaudited) (Audited) (Unaudited) (Audited) Half year ended Year Half year Year ended ended ended 31 December 30 June 31 December 30 June 2000 1999 2000 2000 1999 2000 £'000 £'000 £'000 £'000 £'000 £'000 Continuing activities Building systems 12,937 11,300 25,369 984 875 2,277 Rail and marine 634 1,035 2,180 37 102 134 Software systems 296 - - 102 - - Corporate - - - (429) (240) (692) Total continuing 13,867 12,335 27,549 694 737 1,719 Exceptional losses - - (53) Profit before interest 694 737 1,666
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