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Armour Group PLC (AMR)

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Tuesday 01 April, 2003

Armour Group PLC

Interim Results

Armour Group PLC
01 April 2003


                                ARMOUR GROUP plc

           Interim Results for the six months ended 28 February 2003

                              CHAIRMAN'S STATEMENT


RESULTS AND DIVIDEND


I am pleased to report another strong set of results for the six months to 28
February 2003, with both sales and profit significantly ahead of last year.


Sales in the six months to 28 February 2003 increased by 17% to £7.0 million (28
February 2002: £6.0 million). Operating profit after amortisation of goodwill
rose by 102% to £0.3 million (28 February 2002: £0.1 million). Basic underlying
earnings per share rose by 40% to 0.7p (28 February 2002: 0.5p). As at 28
February 2003, the Group had equity shareholders' funds of £9.1 million (28
February 2002: £8.5 million) and the net cash position was £4.9 million (28
February 2002: £4.5 million).


The Board is not recommending an interim dividend.


OPERATIONS


The Audio Electronics Division has had a record six months with sales increasing
by 17% and operating profit by 36% on the comparative figures for last year. The
core proprietary brands of Autoleads, RM Audio and Veba have all shown positive
year on year growth.


Autoleads, the specialist leads brand for in-car entertainment and
communications, remains the backbone to the Division's trading and has continued
to deliver significant growth in our key markets of retail and audio equipment
manufacturers.


RM Audio, the mid-market car audio brand, and Kicker, the high end specialist
speaker and amplifier brand, made stable and positive contributions to the
overall performance of the Division.


Veba, our new in-car audio-visual brand of DVDs, screens and accessories, was
successfully launched in October 2002 and sales to our retail customer base have
exceeded our expectations. We have ongoing projects with a number of vehicle
manufacturers for which we are designing audio-visual solutions for both
production line fit and dealer fitted options. In February 2003, we received our
first significant order for a dealer fitted solution from a vehicle manufacturer
for one of its new models, which was launched in the United Kingdom in March
2003.


Elsewhere in Europe, we continue to make progress in raising the awareness in
the retail marketplace for the Autoleads and Veba brands and have been
successful in securing significant new business in the professional installer
market for our range of mobile phone telemute connectivity solutions.


ACQUISITION


On 10 March 2003, the Group announced the acquisition of CTI Limited ('CTI'),
one of the leading European designers and manufacturers of specialist GSM and
GPS aerials and antennae for the automotive and marine aftermarkets. Its product
range complements the mobile communication products currently sold under the
Autoleads brand. CTI will form part of, and be integrated into, the Audio
Electronics Division and will enable us to offer a full range of products for
hands-free mobile phone communications. This market is set to grow significantly
in the coming year as a result of the expected change in legislation in the
United Kingdom regarding the use of mobile phones in vehicles.


We believe that there are considerable synergies to be exploited from the
acquisition of CTI, both in terms of the manufacturing operations and channels
to market. The acquisition is expected to be earnings enhancing in the current
financial year and the synergies identified will add value to the future
performance of the Group.


The consideration for CTI, payable in cash, totals approximately £2.1 million of
which £1.75 million was paid on completion. The balance will be payable 12
months from completion and is subject to certain sales and net asset performance
criteria being met. The net assets acquired at completion of £0.5 million
generated an attributable profit before tax of £0.35 million in the year to 28
February 2002 on sales of £1.6 million.


OUTLOOK


The Group is financially strong. We remain acquisitive and our core operating
business continues to deliver significant organic growth. The Board looks
forward to the second half of the financial year with confidence.



Bob Morton
Chairman
31 March 2003



                      CONSOLIDATED PROFIT AND LOSS ACCOUNT


FOR THE SIX MONTHS TO 28 FEBRUARY 2003

                                       
                                  Six months to    Six months to Twelve months
                                                                            to
                                    28 February      28 February     31 August
                                           2003             2002          2002
                        Notes       (Unaudited)      (Unaudited)     (Audited)
                                           £000             £000          £000
                                     ----------       ----------    ----------

Turnover                     2            6,995            5,964        13,304
                                     ----------       ----------    ----------
Operating profit before                     
amortisation of
goodwill                                    315              174           580
Amortisation of                            
goodwill                                   (36)             (36)          (72)
                                     ----------       ----------    ----------
Operating profit                            279              138           508
Exceptional items
Reorganisation costs -       
continuing operations        3                -            (266)         (266)
Loss on discontinued         
operations                   3                -            (145)         (145)        
                                     ----------       ----------    ----------
Profit/(loss) on                            
ordinary activities
before interest                             279            (273)            97
Net interest                                 89               67           149
                                     ----------       ----------    ----------
Profit/(loss) on                            
ordinary activities
before taxation                             368            (206)           246
Taxation on profit/          
(loss) on ordinary
activities                   4             (110)            (58)         (133)
                                     ----------       ----------    ----------
Profit/(loss) on                            
ordinary activities
after taxation                              258            (264)           113
Equity dividend                               -                -         (100)
                                     ----------       ----------    ----------
Profit/(loss) for the        
period retained              5              258            (264)            13
                                     ----------       ----------    ----------

Earnings/(loss) per          
ordinary share               7
Basic                                      0.6p           (0.6)p          0.3p
Basic - underlying                         0.7p             0.5p          1.5p
Diluted                                    0.6p           (0.6)p          0.3p
Diluted - underlying                       0.7p             0.5p          1.5p
                                     ----------       ----------    ----------


All amounts, excluding the loss on discontinued operations, relate to continuing
operations.






             CONSOLIDATED STATEMENT OF RECOGNISED GAINS AND LOSSES


FOR THE SIX MONTHS TO 28 FEBRUARY 2003

                                     
                                  Six months to    Six months to Twelve months
                                                                            to
                                    28 February      28 February     31 August
                                           2003             2002          2002
                                    (Unaudited)      (Unaudited)     (Audited)
                                           £000             £000          £000
                                     ----------       ----------    ----------

Profit/(loss) for the period                258            (264)           113
Currency translation differences              
on foreign currency net investments           -              (1)             -
                                     ----------       ----------    ----------

Total recognised gains and
losses relating to the period               258            (265)           113
                                     ----------       ----------    ----------





                           CONSOLIDATED BALANCE SHEET

AT 28 FEBRUARY 2003
                                          
                                       28 February    28 February    31 August
                                              2003           2002         2002
                             Notes     (Unaudited)    (Unaudited)    (Audited)
                                              £000           £000         £000
                                        ----------     ----------   ----------

Fixed assets
Intangible assets                            1,164          1,236        1,200
Tangible assets                                426            380          352
Investments                                    176            176          176
                                        ----------     ----------   ----------

                                             1,766          1,792        1,728
                                        ----------     ----------   ----------
Current assets
Stocks                                       2,705          1,936        2,415
Debtors                                      2,431          2,244        2,494
Cash at bank and in hand                     4,938          4,517        4,950
                                        ----------     ----------   ----------

                                            10,074          8,697        9,859
                                        ----------     ----------   ----------
Creditors: amounts falling                 
due within one year                        (2,788)        (1,974)      (2,793)
                                        ----------     ----------   ----------
Net current assets                           7,286          6,723        7,066
                                        ----------     ----------   ----------
Net assets                                   9,052          8,515        8,794
                                        ----------     ----------   ----------

Capital and reserves
Called up share capital                      4,044          4,043        4,044
Share premium account                            -          5,586            -
Special reserve account                      4,958              -        4,958
Profit and Loss Account                         50        (1,114)        (208)
                                        ----------     ----------   ----------

Equity shareholders' funds        5          9,052          8,515        8,794
                                        ----------     ----------   ----------









                        CONSOLIDATED CASH FLOW STATEMENT

FOR THE SIX MONTHS TO 28 FEBRUARY 2003


                                  Six months to    Six months to Twelve months
                                                                            to
                                    28 February      28 February     31 August
                                           2003             2002          2002
                        Notes       (Unaudited)      (Unaudited)     (Audited)
                                           £000             £000          £000
                                    -----------       ----------    ----------

Net cash inflow from     
operating activities     6(a)               234              364         1,010

Returns on investment
and servicing of finance
Interest received                            89               69           143
Interest element of                           
finance lease rentals                         -               (2)           (3)
                                    -----------       ----------    ----------
Net cash inflow from
returns on investment
and servicing of finance                     89               67           140

Corporate taxation paid                    (56)             (42)         (129)

Capital expenditure and
financial investment
Payments to acquire                        
tangible fixed assets                     (188)             (90)         (202)
Sale of tangible fixed                        
assets                                        4               20            41
                                    -----------       ----------    ----------

Net cash outflow from                     
capital expenditure                       
and financial investment                  (184)             (70)         (161)

Acquisitions and disposals
Litigation costs                              
relating to                         
discontinued operations                       -             (51)         (145)
                                    -----------       ----------    ----------

Net cash outflow from
acquisitions and disposals                    -             (51)         (145)

Equity dividends paid                      (95)                -             -
                                    -----------       ----------    ----------

Net cash (outflow)/                        
inflow before financing                    (12)              268           715

Financing
Issue of ordinary share capital               -                -             1
Capital reduction and reorganisation          -            (251)         (266)
Capital element of                            
finance lease rental repayments               -             (14)          (14)
                                    -----------       ----------    ----------

Net cash outflow from financing               -            (265)         (279)

                                    -----------       ----------    ----------
Net cash (outflow)/inflow 
after financing, 
being the (decrease)/    
increase in cash in the
period                   6(b)              (12)                3           436
                                    -----------       ----------    ----------



                       NOTES TO THE FINANCIAL STATEMENTS



1. BASIS OF PREPARATION


The interim financial statements have been prepared on the basis of accounting
policies consistent with those set out in the Group's Annual Report and
financial statements for the twelve months to 31 August 2002.


The results of the Group for the six months to 28 February 2003, and the
comparative figures for the six months to 28 February 2002, are unaudited. The
financial information contained herein does not constitute statutory accounts
within the meaning of Section 240 of the Companies Act 1985.


The statutory accounts for the twelve months to 31 August 2002, which were
approved by the shareholders at the Annual General Meeting and which have been
delivered to the Registrar of Companies, carry an unqualified Auditor's Report.
They do not contain a statement under section 237(2) or 237(3) of the Companies
Act 1985.





2. TURNOVER

                                  Six months to    Six months to Twelve months
                                                                            to
                                    28 February      28 February     31 August
                                           2003             2002          2002
                                    (Unaudited)      (Unaudited)     (Audited)
                                           £000             £000          £000
                                    -----------      -----------   -----------
Group sales by business
segment
Audio Electronics                         6,995            5,964        13,304
                                    -----------      -----------   -----------

Group sales by country of
operation
United Kingdom                            6,823            5,830        12,991
Sweden                                      310              232           571
Inter-area eliminations                   (138)             (98)         (258)
                                    -----------      -----------   -----------
                                          6,995            5,964        13,304
                                    -----------      -----------   -----------

Group sales by country of
destination
United Kingdom                            5,389            4,543         9,414
Rest of Europe                            1,445            1,230         3,549
Rest of world                               161              191           341
                                    -----------      -----------   -----------
                                          6,995            5,964        13,304
                                    -----------      -----------   -----------



3. EXCEPTIONAL ITEMS


The exceptional items relate to the capital reduction and reorganisation and
litigation between a former supplier to the Group and a former subsidiary
undertaking. Both of these issues were resolved in the prior year.





4. TAXATION ON PROFIT/(LOSS) ON ORDINARY ACTIVITIES


The taxation charge for the six months to 28 February 2003 is based on the
effective taxation rate which it is estimated will apply to earnings for the
full year.



5. RECONCILIATION OF MOVEMENTS IN EQUITY SHAREHOLDERS' FUNDS


                                  Six months to    Six months to Twelve months
                                                                            to
                                    28 February      28 February     31 August
                                           2003             2002          2002
                                    (Unaudited)      (Unaudited)     (Audited)
                                           £000             £000          £000
                                    -----------      -----------   -----------

Profit/(loss) for the period                258            (264)           113
Equity dividend                               -                -         (100)
                                    -----------      -----------   -----------
Profit/(loss) for the period                
retained                                    258            (264)            13
New share capital subscribed                  -                -             1
Currency translation differences
on foreign
currency investments                          -              (1)             -
                                    -----------      -----------   -----------
Net movement in equity                      
shareholders' funds                         258            (265)            14
Opening equity shareholders'              
funds                                     8,794            8,780         8,780
                                    -----------      -----------   -----------
Closing equity shareholders'              
funds                                     9,052            8,515         8,794
                                    -----------      -----------   -----------




6(a). RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING
ACTIVITIES

                                    
                                  Six months to    Six months to Twelve months
                                                                            to
                                    28 February      28 February     31 August
                                           2003             2002          2002
                                    (Unaudited)      (Unaudited)     (Audited)
                                           £000             £000          £000
                                    -----------      -----------   -----------

Operating profit                            279              138           508
Depreciation of tangible fixed              108              130           255
assets
Amortisation of goodwill                     36               36            72
(Increase)/decrease in stocks             (290)               50         (430)
Decrease/(increase) in debtors               58               72         (153)
Increase/(decrease) in                       41             (56)           771
creditors
Loss/(profit) on disposal of                  2              (6)          (13)
tangible fixed assets               -----------      -----------   -----------

Net cash inflow from operating              
activities                                  234              364         1,010
                                    -----------      -----------   -----------





6(b). NET CASH

                                                                           Net
                                                                          Cash
                                                                          £000

Net cash at 31 August 2002                                               4,950
Decrease in cash                                                          (12)
                                                                   -----------
Net cash at 28 February 2003                                             4,938
                                                                   -----------



7. EARNINGS/(LOSS) PER ORDINARY SHARE


Basic earnings per share is calculated using the weighted average number of
shares in issue during the period of 39,477,042 (28 February 2002: 39,466,012
and 31 August 2002: 39,468,017).


Underlying earnings per share is also shown calculated by reference to earnings
before amortisation of goodwill and non-operating exceptional items. The
Directors consider that this information gives a useful additional indication of
underlying performance.



                          Six months to     Six months to    Twelve months to
                           28 February       28 February         31 August
                               2003              2002                2002
Basic earnings per         (Unaudited)       (Unaudited)           (Audited)
ordinary share
                           £000        p     £000        p      £000         p
                        -------  -------  -------  -------   -------   -------

Profit/(loss) for the       
period                      258      0.6     (264)    (0.6)      113       0.3
Amortisation of              
goodwill                     36      0.1       36      0.1        72       0.2
Exceptional items             -        -      411      1.0       411       1.0
                        -------  -------  -------  -------   -------   -------
Underlying earnings         294      0.7      183      0.5       596       1.5
                        -------  -------  -------  -------   -------   -------



Diluted earnings per share is calculated with reference to 39,962,344 (28
February 2002: 39,887,903 and 31 August 2002: 39,887,548) ordinary shares.



                          Six months to     Six months to    Twelve months to
                           28 February       28 February         31 August
                               2003              2002                2002
Diluted earnings per       (Unaudited)       (Unaudited)           (Audited)
ordinary share
                           £000        p     £000        p      £000         p
                        -------  -------  -------  -------   -------   -------

Profit/(loss) for the       
period                      258      0.6     (264)    (0.6)      113       0.3
Amortisation of              
goodwill                     36      0.1       36      0.1        72       0.2
Exceptional items             -        -      411      1.0       411       1.0
                        -------  -------  -------  -------   -------   -------
Underlying earnings         294      0.7      183      0.5       596       1.5
                        -------  -------  -------  -------   -------   -------




8. COPIES OF INTERIM REPORT


Copies of this interim report are being sent to shareholders and will also be
made available upon request to members of the public at the Company's Registered
Office, Lonsdale House, 7/9 Lonsdale Gardens, Tunbridge Wells, Kent, TN1 1NU.



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