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Armour Group PLC (AMR)

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Wednesday 07 April, 2004

Armour Group PLC

Interim Results

Armour Group PLC
07 April 2004


                                ARMOUR GROUP plc

           Interim Results for the six months ended 29 February 2004

                              CHAIRMAN'S STATEMENT


RESULTS AND DIVIDEND

I am pleased to report an excellent set of results for the six months to 29
February 2004.

The financial highlights are as follows:

   • Sales of £13.9 million (28 February 2003: £7.0 million) up 98%.
   • Operating profit after amortisation of goodwill of £1.4 million (28
     February 2003: £0.3 million) up 404%.
   • Basic underlying earnings per share of 2.3p (28 February 2003: 0.7p) up
     229%.
   • Equity shareholders' funds of £15.7 million (28 February 2003: £8.9
     million) up 76%.
   • Net debt position was £3.2 million (28 February 2003: Net funds £4.9
     million).

The Board is not recommending an interim dividend.

OPERATIONS

Auto Electronics Division

The Audio Electronics Division, which has changed its name to the Auto
Electronics Division, has had yet another record six months with sales
increasing by 23% and operating profit by 83%. Our strong market position and
the further development of our proprietary brands through the introduction of
new products has resulted in increases in our market share and continued organic
growth.

The Autoleads range of specialist connectivity solutions for in-car
entertainment and communications has driven organic growth with sales increasing
by 18% over the same period last year. Sales from one of its core products, the
telemute range of leads, has risen by over 108% as a result of the change in
legislation on 1 December 2003 restricting the use of mobile phones in vehicles.

The CTI range of specialist GSM and GPS aerials and antennae for the automotive
and marine aftermarkets has benefited from both the change in legislation
regarding the use of mobile phones in vehicles and the Division's increasingly
strong position in the in-vehicle cellular market. In the first six months of
the year, a number of new blue chip customers have been secured.

The Veba branded range of in-car audio-visual entertainment systems has achieved
considerable success in the past six months and consolidated its position as one
of the leaders in the professional fit end of the market. Our focus remains on
our skills as a solution designer and provider, which has resulted in the
winning of significant contracts from BMW and Hyundai. The initial orders for
these two contracts total in excess of £800,000. Given that we have designed
model specific solutions for these customers, we can expect ongoing sales of
these systems throughout the lifecycle of the vehicle, which could be up to
seven years. On the retail side, our audio-visual products and services are
being sold by an additional 60 specialist retailers and rolled out by a national
retail chain across 230 of its stores.

Elsewhere in the brand portfolio, the RM Audio range of mid-market car audio
products has secured new headunit business from both Fiat (UK) and Claas, the
agricultural vehicle manufacturer. The new Mutant range of mid-priced speakers
and amplifiers has been successfully launched and is now selling well through
our retail customer base.



Home Electronics Division

The Home Electronics Division was formed on 31 October 2003 through the
acquisition of Veda Products Limited, QED Audio Products Limited, Goldring
Products Limited and Integrated Media Installations Limited. All four of the
businesses are involved in the design, manufacture and supply of high end
products and services to the specialist hi-fi, home theatre and entertainment
market. The Home Electronics Division has strong, market leading, proprietary
brands, which include QED, Systemline, Cinemax, Arca and Goldring.

The Division has made a significant contribution to the Group in its first four
months of ownership with the return on sales being well in excess of 10%. There
is a good pipeline of new products coming through into sales, which includes
QED's high performance interconnects such as the Performance Sqart, the awards
winning Qunex OT home theatre cable and QED XT300 speaker cable, the new
Goldring GR1 turntable and the new Systemline Modular multi-room entertainment
system. This last product has been specifically designed to lower the entry
point for multi-room entertainment systems and thereby open up the residential
market. It is targeted at the general new build housing market and it secured
its first sales in February 2004.

The process of creating an integrated operating structure in the Division and
realising the synergies identified at the time of acquisition has begun. The
management of the four businesses has been consolidated into a single
streamlined team to run the Division, a co-ordinated product development
programme has been put in place and a purchasing review is being undertaken,
which is aimed at reducing our manufacturing and sourcing costs. It is expected
that these actions will make a positive financial contribution in the current
year.

OUTLOOK

The Group is financially strong. The operating divisions continue to win new
business as well as launch new products and brands, which create strong organic
growth. The Board looks forward to the second half of the financial year with
confidence.


Bob Morton
Chairman
7 April 2004



CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE SIX MONTHS TO 29 FEBRUARY 2004

                                 Notes Six months to Six months to Twelve months
                                         29 February   28 February  to 31 August        
                                                2004          2003          2003
                                         (Unaudited)   (Unaudited)     (Audited)     
                                                £000          £000          £000
Turnover
Continuing operations              2           8,570         6,995        15,147
Acquisitions                      2,3          5,315             -           928
                                              13,885         6,995        16,075
Operating profit before
amortisation of goodwill
Continuing operations                          1,073           315         1,101
Acquisitions                       3             598             -           248
Amortisation of goodwill                       (264)          (36)         (113)
Operating profit                               1,407           279         1,236

Amounts written back to
investments
Continuing operations                              -             -            24
Profit on ordinary activities                  1,407           279         1,260
before interest
Net interest                                    (72)            89           141

Profit on ordinary activities                  1,335           368         1,401
before taxation
Taxation on profit on ordinary     4           (499)         (110)         (406)
activities
Profit on ordinary activities                    836           258           995
after taxation
Dividend                                           -             -         (138)
Profit for the period retained     5             836           258           857

Earnings per ordinary share        7
Basic                                           1.8p          0.6p          2.5p
Basic - underlying                              2.3p          0.7p          2.7p
Diluted                                         1.6p          0.6p          2.5p
Diluted - underlying                            2.1p          0.7p          2.7p



CONSOLIDATED STATEMENT OF RECOGNISED GAINS AND LOSSES
FOR THE SIX MONTHS TO 29 FEBRUARY 2004

                                       Six months to Six months to Twelve months
                                         29 February   28 February  to 31 August        
                                                2004          2003          2003
                                         (Unaudited)   (Unaudited)     (Audited)     
                                                £000          £000          £000

Profit for the period                            836           258           995
Currency translation differences on                -             -           (1)
foreign
currency net investments

Total recognised gains and losses
relating
to the period                                    836           258           994



CONSOLIDATED BALANCE SHEET
AT 29 FEBRUARY 2004

                                        Notes 29 February  Restated * Restated *
                                                     2004 28 February  31 August
                                              (Unaudited)        2003       2003
                                                     £000 (Unaudited)  (Audited)
                                                                 £000       £000
Fixed assets
Intangible assets                                  13,729       1,164      2,846
Tangible assets                                     1,570         426        882
                                                   15,299       1,590      3,728

Current assets
Stocks                                              4,350       2,705      2,767
Debtors                                             6,550       2,431      3,956
Cash at bank and in hand                              694       4,938      3,407
                                                   11,594      10,074     10,130
Creditors: Amounts falling due within
one year
Borrowings                                          (545)           -          -
Other                                             (7,361)     (2,788)    (4,408)
                                                  (7,906)     (2,788)    (4,408)

Net current assets                                  3,688       7,286      5,722

Total assets less current liabilities              18,987       8,876      9,450

Creditors: Amounts falling due after
more than one year
Borrowings                                        (3,328)           -          -
Net assets                                         15,659       8,876      9,450

Capital and reserves
Called up share capital                             5,261       4,044      4,044
Share premium account                               4,156           -          -
Special reserve account                                 -       4,958          -
Profit and Loss Account                             6,442          50      5,606
                                                   15,859       9,052      9,650
Investment in own shares                            (200)       (176)      (200)
Equity shareholders' funds                5        15,659       8,876      9,450

* See Note 1


CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS TO 29 FEBRUARY 2004

                                 Notes Six months to Six months to Twelve months
                                                                              to
                                         29 February   28 February     31 August
                                                2004          2003          2003
                                         (Unaudited)   (Unaudited)     (Audited)
                                                £000          £000          £000

Net cash inflow from operating   6(a)            872           234         1,271
activities

Returns on investment and
servicing of finance
Interest paid                                   (62)             -             -
Interest received                                 30            89           144
Interest element of finance                      (5)             -           (3)
lease rentals

Net cash (outflow)/inflow from
returns on investment
and servicing of finance                        (37)            89           141

Corporate taxation paid                        (476)          (56)         (225)

Capital expenditure and
financial investment
Payments to acquire tangible                   (251)         (188)         (505)
assets
Sale of tangible assets                            8             4            27

Net cash outflow from capital                  (243)         (184)         (478)
expenditure
and financial investment

Acquisitions and disposals
Purchase of subsidiary                      (13,732)             -       (1,839)
undertakings
Net cash/(overdraft) acquired                  1,812             -         (291)
with subsidiary undertakings

Net cash outflow from
acquisitions
and disposals                               (11,920)             -       (2,130)

Dividend paid                                  (135)          (95)         (100)

Net cash outflow before                     (11,939)          (12)       (1,521)
financing

Financing
Issue of ordinary share capital                5,373             -             -
Capital element of finance lease                (20)             -          (22)
rental repayments

Net cash inflow/(outflow) from                 5,353             -          (22)
financing

Net cash outflow after
financing,
being the decrease in cash in    6(b)        (6,586)          (12)       (1,543)
the period


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 2003, with the exception
of the classification of own ordinary shares held by the Armour Employees' Share
Trust.

Previously, in accordance with UITF 13, the own ordinary shares held by the
Armour Employees' Share Trust have been shown as fixed asset investments. In
accordance with UITF 38, issued on 15 December 2003, this investment in own
shares has been transferred to equity shareholders' funds. The comparative
figures have been restated to reflect this change. The effect on the
Consolidated Balance Sheets at 28 February 2003 and 31 August 2003 is to
decrease equity shareholders' funds by £176,000 and £200,000 respectively.

The results of the Group for the six months to 29 February 2004, and the
comparative figures for the six months to 28 February 2003, 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 2003, 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
                                         29 February   28 February     31 August
                                                2004          2003          2003
                                         (Unaudited)   (Unaudited)     (Audited)
                                                £000          £000          £000

Group sales by business segment
Auto Electronics Division                      8,570         6,995        16,075
Home Electronics Division                      5,315             -             -

                                              13,885         6,995        16,075

Group sales by country of operation
United Kingdom                                13,726         6,823        15,628
Sweden                                           316           310           750
Inter-area eliminations                        (157)         (138)         (303)

                                              13,885         6,995        16,075

Group sales by country of destination
United Kingdom                                10,539         5,389        11,960
Rest of Europe                                 3,014         1,445         3,907
Rest of world                                    332           161           208

                                              13,885         6,995        16,075

3. ACQUISITIONS

On 31 October 2003, the Group acquired four separate companies - Veda Products
Limited, QED Audio Products Limited,  Goldring Products Limited and Integrated
Media Installations Limited - which are involved in the design, manufacture  and
supply of high end products and services to the specialist hi-fi, home theatre
and entertainment market. These  companies comprise the Home Electronics
Division.

4. TAXATION ON PROFIT ON ORDINARY ACTIVITIES

The taxation charge for the six months to 29 February 2004 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
                                         29 February   28 February     31 August
                                                2004          2003          2003
                                         (Unaudited)   (Unaudited)     (Audited)
                                                £000          £000          £000

Profit for the period                            836           258           995
Dividend                                           -             -         (138)
Profit for the period retained                   836           258           857
New share capital subscribed (net of           5,373             -             -
costs)
Currency translation differences on
foreign
Currency investments                               -             -           (1)
Net movement in equity shareholders'           6,209           258           856
funds
Opening equity shareholders' funds             9,450         8,794         8,794
Prior year adjustment (Note 1)                     -         (176)         (200)
Closing equity shareholders' funds            15,659         8,876         9,450


6(a). RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING
ACTIVITIES
                                       Six months to Six months to Twelve months
                                                                              to
                                         29 February   28 February     31 August
                                                2004          2003          2003
                                         (Unaudited)   (Unaudited)     (Audited)
                                                £000          £000          £000

Operating profit                               1,407           279         1,236
Depreciation of tangible fixed assets            284           108           281
Amortisation of goodwill                         264            36           113
Increase in stocks                             (252)         (290)          (27)
(Increase)/decrease in debtors                 (744)            58         (715)
(Decrease)/increase in creditors                (88)            41           388
Loss/(profit) on disposal of tangible              1             2           (5)
fixed assets
Net cash inflow from operating                   872           234         1,271
activities


6(b). RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS/(DEBT)

                                       Six months to Six months to Twelve months
                                                                              to
                                         29 February   28 February     31 August
                                                2004          2003          2003
                                         (Unaudited)   (Unaudited)     (Audited)
                                                £000          £000          £000

Decrease in cash                             (6,586)          (12)       (1,543)
Cash outflow from finance leases                  20             -            22
Change in net funds resulting from           (6,566)          (12)       (1,521)
cash flows
New finance leases                              (31)             -          (76)
Movement in net debt in the year             (6,597)          (12)       (1,597)
Opening net funds                              3,353         4,950         4,950
Closing net (debt)/funds                     (3,244)         4,938         3,353


6(c). ANALYSIS OF NET FUNDS/(DEBT) MOVEMENT

                                      31 August    Cash Acquisitions 29 February
                                           2003    Flow         £000        2004
                                           £000    £000                     £000
Cash                                      3,407 (2,713)            -         694
Loans: Amounts falling due within one         -   (545)            -       (545)
year
Loans: Amounts falling due after more           (3,328)                  (3,328)
than one year
Finance leases                             (54)      20         (31)        (65)

Net funds /(debt)                         3,353 (6,566)         (31)     (3,244)


7. EARNINGS PER ORDINARY SHARE

Basic earnings per share is calculated using the weighted average number of
shares in issue during the period of 47,567,290 (28 February 2003: 39,477,042
and 31 August 2003: 39,477,042).

Underlying earnings per share is also shown calculated by reference to earnings
before amortisation of goodwill and amounts written back to investments. The
Directors consider that this information gives a useful additional indication of
underlying performance.

                                  Six months to Six months to Twelve months to
                                   29 February   28 February      31 August
                                      2004          2003            2003
                                   (Unaudited)   (Unaudited)      (Audited)
Basic earnings per ordinary share     £000    p    £000     p     £000        p

Profit for the period                  836  1.8     258   0.6      995      2.5
Amortisation of goodwill               264  0.5      36   0.1      113      0.3
Amounts written back to                  -    -       -     -     (24)    (0.1)
investments

Underlying earnings                  1,100  2.3     294   0.7    1,084      2.7

Diluted earnings per share is calculated with reference to 51,226,791 (28
February 2003: 39,962,344 and 31 August 2003: 40,406,857) ordinary shares.

                                  Six months to Six months to Twelve months to
                                   29 February   28 February      31 August
                                      2004          2003            2003
                                   (Unaudited)   (Unaudited)      (Audited)
Diluted earnings per ordinary         £000    p    £000     p     £000        p
share

Profit for the period                  836  1.6     258   0.6      995      2.5
Amortisation of goodwill               264  0.5      36   0.1      113      0.3
Amounts written back to                  -    -       -     -     (24)    (0.1)
investments

Underlying earnings                  1,100  2.1     294   0.7    1,084      2.7


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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