Interim Results

LPA Group PLC 27 June 2007 LPA Group Plc (or 'the Company') 27 June 2007 INTERIM ANNOUNCEMENT OF UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2007 LPA Group Plc, the electrical and electronic equipment manufacturer and distributor, announces a return to profit in the six months ended 31 March 2007. KEY POINTS • Turnover up 29% to £8.6m (2006: £6.7m) • Profit before tax £156,000 (2006: loss of £149,000) • Basic earnings per share of 1.05p (2006: loss 1.19p) • Increase in interim dividend to 0.20p (2006: 0.15p) • Positive cash flow despite rapid growth - reduction in gearing to 37.8% (2006: 39.2%) • Order intake up 11% • Major prospects for LED lighting • Strong trading continuing in second half Peter Pollock, Chief Executive, commented We have enjoyed a much improved performance, which has nothing to do with the intervention of third parties and everything to do with the hard work the team have put in, rebuilding the Group from the grave situation that existed in 2003. The second half is looking good too. There are challenges in the longer term to be addressed, but we have the strategy to deal with them. The Group is in robust shape and we are looking forward to the future with improved confidence. 27 June 2007 Enquiries: Peter Pollock LPA Group Plc 07881 626123 or 01799 512844 Gareth David College Hill 020 7457 2020 James Glancy Teather & Greenwood Limited 020 7426 9010 Thilo Hoffmann Teather & Greenwood Limited 020 7426 9010 Interim Unaudited Group Results for the Six Months ended 31 March 2007 CHAIRMAN'S STATEMENT In my remarks to the Annual General Meeting held in February, I commented that the start to the new financial year had been strong. I am pleased to report that this has continued into the second half and that the year as a whole should be satisfactory. Some of this present strength is due to customers bringing forward projects from the first half of next financial year. While this has had a welcome effect on this year, the next financial year will be a challenge until already secured rail projects come online in the fourth quarter. This presents opportunities to adjust our UK capacity to better reflect the base load going forward, with additional activity being satisfied from offshore. Sales output increased 29% to £8.6m (2006: £6.7m), and order intake increased by 11% to £7.2m but this continues to exclude the full value of projects for which we have been selected but orders not placed. Profit before tax in the first half amounted to £156,000 an increase of £305,000 over the loss of £149,000 in the corresponding period last year. I should mention that this improvement reflects the work of all our staff in facing and overcoming the severe challenges of the last five years, and was achieved despite including costs of £52,000 spent in protecting shareholders from tendering their shares to Andrew Perloff at an unacceptably low price, and in ensuring that the Annual General Meeting was, as usual, conducted in the interests of all shareholders. All business units have contributed to the improvement in profitability, but the progress at Haswell Engineers is particularly pleasing since the operation has overcome significant difficulties to achieve a much stronger market position and become a solid performer. The net cash inflow before financing remained positive at £22,000 (2006: £86,000) despite the investment in working capital to support the sharply increased level of activity. Cash flow has been stronger at the beginning of the second half, reflecting the sustained profitability and more modest growth. The rail vehicle equipment market remains challenging worldwide. Concentration on builders supplying the UK market has resulted in contracts from UK, Germany, Sweden, France and Japan. A greater footprint in markets in Asia and Australasia has also been achieved. Immediate opportunities include extra coaches for West Coast Mainline which, if the order is placed, would have a significant impact on the final quarter of next financial year and subsequent periods. Our LED lighting technology for rail vehicles is increasingly recognised as world class with initial opportunities in Europe, which have the potential to result in major contracts. This technology has potential beyond rail vehicles in the areas of infrastructure, aerospace and defence. Given the strong trading in the current year the directors intend to pay an increased interim dividend of 0.20p (2006: 0.15p) on 28 September 2007 to shareholders registered at the close of business on 7 September 2007. Your Board expects strong progress during the remainder of this year, which will however be tempered by the preparation needed to meet the challenges of next financial year, when the load will not be so strong, and appropriately structure the Group for the improved load already on hand for subsequent periods. The Group will develop low cost country sourcing and manufacture as a major priority, while maintaining its centres of sales and engineering excellence in the UK. Michael Rusch Chairman 27 June 2007 LPA GROUP PLC Interim Unaudited Group Results for the Six Months ended 31 March 2007 CONSOLIDATED PROFIT AND LOSS ACCOUNT 6 months to 6 months to Year to 31 March 2007 31 March 2006 30 Sept 2006 Unaudited Unaudited Audited £000's £000's £000's Turnover 8,602 6,668 13,737 Operating profit / (loss) 128 (181) (205) Net finance income (see note 3) 28 32 62 Profit / (loss) on ordinary activities before taxation 156 (149) (143) Tax on profit / (loss) on ordinary activities (41) 19 6 Profit / (loss) on ordinary activities after taxation 115 (130) (137) Earnings per share (see note 2) - Basic earnings / (loss) per share 1.05p (1.19p) (1.26p) - Diluted earnings / (loss) per share 1.04p (1.19p) (1.26p) STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES 6 months to 6 months to Year to 31 March 2007 31 March 2006 30 Sept 2006 Unaudited Unaudited Audited £000's £000's £000's Profit / (loss) on ordinary activities after taxation 115 (130) (137) Actuarial gain recognised in the pension scheme 79 546 144 Deferred tax attributable to actuarial gain (24) (171) (43) Total recognised gains / (losses) 170 245 (36) LPA GROUP PLC Interim Unaudited Group Results for the Six Months ended 31 March 2007 CONSOLIDATED BALANCE SHEET As at As at As at 31 March 2007 31 March 2006 30 Sept 2006 Unaudited Unaudited Audited £000's £000's £000's Fixed assets Intangible assets 1,187 1,281 1,234 Tangible assets 1,984 2,183 2,100 3,171 3,464 3,334 Current assets Stocks 2,569 2,383 2,632 Debtors 3,531 2,996 3,114 Cash at bank and in hand 3 3 4 6,103 5,382 5,750 Creditors: Amounts falling due within one year (3,801) (3,708) (4,143) Net current assets 2,302 1,674 1,607 Total assets less current liabilities 5,473 5,138 4,941 Creditors: Amounts falling due after more than one year (1,423) (1,083) (956) Provisions for liabilities and charges (26) (31) (5) Net assets excluding pension asset 4,024 4,024 3.980 Pension asset 1,839 1,996 1,743 Net assets 5,863 6,020 5,723 Capital and reserves Called up share capital 1,096 1,090 1,090 Share premium account 256 254 254 Revaluation reserve 312 313 313 Merger reserve 230 230 230 Profit and loss account 3,969 4,133 3,836 Equity shareholders' funds 5,863 6,020 5,723 LPA GROUP PLC Interim Unaudited Group Results for the Six Months ended 31 March 2007 CONSOLIDATED CASH FLOW STATEMENT 6 months to 6 months to Year to 31 March 2007 31 March 2006 30 Sept 2006 Unaudited Unaudited Audited £000's £000's £000's Net cash inflow from operating activities 186 301 648 Returns on investments and servicing of finance (92) (86) (171) Taxation - - (8) Capital expenditure (34) (90) (137) Equity dividends paid (38) (39) (55) Net cash inflow before financing 22 86 277 Financing 442 (214) (385) Increase / (decrease) in cash 464 (128) (108) RECONCILIATION OF OPERATING PROFIT / (LOSS) TO NET CASH INFLOW FROM OPERATING ACTIVITIES Operating profit / (loss) 128 (181) (205) Depreciation and amortisation 215 228 455 Changes in working capital and other non cash items (224) 197 275 Adjustment for pension funding 67 57 123 Net cash inflow from operating activities 186 301 648 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT Increase / (decrease) in cash in the period 464 (128) (108) Cash (inflow) / outflow from debt and lease financing (434) 214 385 Change in debt resulting from cash flows 30 86 277 New hire purchase agreements (18) (38) (84) Amortisation of loan costs (5) (5) (10) Movement in net debt in the period 7 43 183 Opening net debt (2,221) (2,404) (2,404) Closing net debt (2,214) (2,361) (2,221) NOTES 1 - ACCOUNTING POLICIES The interim financial information has been prepared on the basis of the accounting policies set out in the Group's statutory accounts for the year ended 30 September 2006, except that FRS20 'Share Based Payments' will be adopted for the first time in the accounts to the year ended 30 September 2007. The cost of share based payments, where employees receive share options, is determined by reference to the fair value at the date of grant. The cost is recognised in the profit and loss account over the vesting period. Comparative figures have not been restated as there is not a material impact on either net assets at September 2006 and March 2006 or earnings in the year to September 2006 and the half year to 31 March 2006 arising from the adoption of FRS20. 2 - EARNINGS PER SHARE The calculation of basic earnings per share is based upon the profit after tax of £115,000 (2006: loss of £130,000) and the weighted average number of ordinary shares in issue during the period of 10.945m (2006: 10.903m). The weighted average number of ordinary shares diluted for the effect of outstanding share options was 11.046m. Due to losses in the prior year no dilution arises and diluted earnings per share is therefore shown as the same as basic earnings per share. Adjusted earnings per share, which is disclosed to reflect the underlying performance of the Company, has been calculated on a profit of £162,000 (2006: loss of £84,000) being the profit after tax for the period before the amortisation of goodwill. Details are as follows: 6 months to 6 months to Year to 31 March 2007 31 March 2006 30 September 2006 Unaudited Unaudited Audited Basic Diluted Basic Basic pence per pence per pence per pence share share share per share £'000 £'000 £'000 Basic earnings 115 1.05 1.04 (130) (1.19) (137) (1.26) Goodwill amortisation 47 0.43 0.43 46 0.42 93 0.86 Adjusted earnings 162 1.48 1.47 (84) (0.77) (44) (0.40) 3 - NET FINANCE INCOME 6 months to 6 months to Year to 31 March 2007 31 March 2006 30 Sept 2006 Unaudited Unaudited Audited £000's £000's £000's Interest payable (97) (91) (181) Net return on pension scheme 125 123 243 Net finance income 28 32 62 4 - INFORMATION The financial information contained in this interim statement does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The financial information for the full preceding year is based on the statutory accounts for the financial year ended 30 September 2006. Those accounts, upon which the auditors issued an unqualified opinion, have been delivered to the Registrar of Companies. Summarised copies of this Interim Report are being sent to shareholders. Copies are also available from the Company's Registered Office, Tudor Works, Debden Road, Saffron Walden, Essex, CB11 4AN. This information is provided by RNS The company news service from the London Stock Exchange

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