Trading update

RNS Number : 1643M

Sprue Aegis plc

14 July 2014

 



14 July 2014

Sprue Aegis plc

("Sprue" or the "Company")

Trading update

Sprue, one of Europe's leading home safety products suppliers, today issues a trading update for the six months ended 30 June 2014 ("H1 2014").

The Company's recent move to AIM was successfully completed on 30 April 2014. At the same time, the Company raised £8.0 million by way of a placing of new shares with institutional investors at 200p each.

H1 2014 has seen another record period of trading for Sprue, reflected in sales of £23.8m up 11% on the same period last year.  The Company has continued to benefit from strong operational leverage and operating profit pre-exceptional costs* is expected to be significantly higher than H1 2013. 

Overall, sales in H1 2014 are broadly in line with management expectations although continental Europe, and in particular Germany, has seen strong demand for Sprue's award winning FireAngel smoke detectors with sales significantly ahead of management expectations. H1 2014 UK Retail sales were adversely affected by customer destocking and the impact of reduced levels of CO awareness campaigns run during the period; Utility & Leisure sales were also slightly behind management expectations.

Sterling's recent strengthening against the US Dollar is reducing the cost of US Dollar sourced products, although, for H1 2014, the financial benefit is more than offset by the adverse impact of Sterling's strength against the Euro which puts pressure on gross margins by reducing the Sterling value of Euro denominated revenue.  The Group's balance sheet remains strong with approximately £11.7m of cash and no debt as at 30 June 2014.

The Company is pleased to confirm that Nano-905, the miniaturised version of the Group's existing carbon monoxide sensor which is manufactured at the Group's subsidiary, Pace Sensors in Canada, has passed all final certification testing and can now be installed in Sprue's carbon monoxide detectors due to be sold during H2 2014.

Sprue's "connected home" trial which was announced in March 2014 is progressing well, although 2014 revenues attributable to the trial will be negligible.

Despite the impact of the declining value of the Euro, with the launch later this year of a new trade range of products combined with a record order book for H2 2014, which includes a significant increase in business in France, the Board remains optimistic of delivering results for the year ending 31 December 2014 in line with market expectations.

The Company will provide a further update on trading at the time of the release of its unaudited interim results for the six months ended 30 June 2014 which are expected to be announced in late September 2014.

*Before exceptional AIM costs of £0.5m in H1 2014 and exceptional hostile bid defence costs of £0.4m in H1 2013

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For further information, please contact:

Sprue Aegis plc	02476 323 232
Graham Whitworth, Chairman & Group CEO John Gahan, Group Finance Director
Westhouse Securities	0207 601 6100
Tom Griffiths

Notes to Editors

About Sprue Aegis plc

Group overview

With its head office in Coventry, UK, Sprue is one of Europe's leading home safety products suppliers and manufactures one of the world's smallest carbon monoxide sensors for use in carbon monoxide alarms.  Sprue designs and sells smoke and carbon monoxide alarms and other safety related products throughout Europe under the FireAngel, AngelEye, Pace Sensors, First Alert, BRK and Dicon brands.  Sprue enjoys a strong European market presence, a leading UK retail footprint, is the supplier of choice to the UK's Fire and Rescue Services and continues to develop its market share in the UK's trade sector.  Sprue has an established network of independent distributors within Continental Europe providing access into these key growth markets through local partners.

Patented technology

Sprue has patented technology in Europe, the US and other selected territories and its range of smoke and carbon monoxide alarms is independently certified to the latest European standards.  For further product information, please visit: www.fireangel.co.uk or www.firstalert.eu or www.brkdicon.eu/en or www.sprue.com.

 

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