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Armour Group PLC (AMR)

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Monday 23 November, 2009

Armour Group PLC

Final Results

RNS Number : 8796C
Armour Group PLC
23 November 2009
 


ARMOUR GROUP PLC

 ("Armour" or the "Group")

Preliminary Results for the year ended 31 August 2009 



FINANCIAL HEADLINES

  • Sales £51.6 million (2008: £54.0 million).
  • EBITDA* of £3.0 million (2008: £5.2 million).
  • Profit before taxation £1.1 million (2008: £3.5 million).
  • Basic earnings per ordinary share 1.4p (20083.7p).
  • Cash generated from operations of £7.2 million (2008: £3.1 million).
  • Net debt substantially reduced to £4.9 million (2008: £8.9 million).
  • Recommended dividend of 0.30p (2008: 0.65p) per ordinary share.


* EBITDA is defined as profit before interest, taxation, depreciation, amortisation and share-based payments.


BUSINESS HIGHLIGHTS

  • Outperformed market expectations despite a year of severe economic downturn.
  • Secured over £1 million of additional future annual revenue from new distribution agreements.
  • Successfully expanded into the "small office home office" furniture market.
  • Won significant incremental business with existing and new customers in both divisions.
  • Achieved strong growth in our Nordic operations.



George Dexter, Chief Executive of Armour Group plc commented:


"The Group's target markets of electrical retailing, house building and automotive have been some of the hardest hit over last year's severe economic downturn. We have adapted our business but continued to pursue our strategy, producing a very sound set of results given the overall economic climate.


Despite the state of the economy, the Group has not stood still. We have continued to invest in our business. We believe that the Group is well positioned to take advantage of any opportunities that arise as the recovery gathers momentum. 


The new financial year has started well for both our operating divisionswith Group sales and profit comfortably ahead of last year.



For further information please contact: 


Armour Group plc                                                                    Tel: 01892 502700

George Dexter, Chief Executive        

John Harris, Finance Director


FinnCap, Nominated Adviser and Broker                                Tel: 0207 600 1658

Geoff Nash

Stephen Norcross (Sales)


Threadneedle Communications, Financial PR                        Tel: 020 7653 9850

Trevor Bass, Alex White

  

ARMOUR GROUP PLC

 ("Armour" or the "Group")

Preliminary Results for the year ended 31 August 2009 



CHAIRMAN'S STATEMENT


We are pleased to report that despite an extremely challenging year to 31 August 2009, Group sales were £51.6 million (2008: £54.0 million) and profit from operations was £1.5 million (2008: £4.0 million). Basic earnings per ordinary share were 1.4p (2008: 3.7p) and the proposed full year dividend is 0.30p (2008: 0.65p). The Group generated £7.2 million of cash from operations (2008: £3.1 million) with net debt falling by £4.0 million to £4.9 million at 31 August 2009.


The Group's profitable and cash generative performance, whilst reflecting the difficulties in the economic environment, has also clearly demonstrated the resilience and strength of our business model. This model is based upon strong brands, quality products backed by innovation, unrivalled distribution and excellent customer service. Taken together, these fundamental strengths are a key part of our strategy and the foundation of our leading positions in our niches within the home and automotive consumer product markets.


During the year we successfully managed our way through a variety of unfavourable events which have included a tightening of credit facilities, significant exchange rate volatility, a collapse in consumer confidence and demand and fierce price competition in particular sectors of our target markets.  


We responded to the deteriorating market conditions in a measured and responsible manner with the objective of protecting profitability without damaging the longer term prospects of the Group. We reduced our cost base, selectively increased product pricing and maintained our investment in the key new product development programmes, which we believe will drive future growth. 


Whilst the headlines for the year have been dominated by the impact of the economic downturn, there has been a considerable amount of good news for the Group. This includes a significant amount of new business won across all the operations with both new and existing customers; the successful launch of our "small office home office" furniture range; over £1 million of additional future annual revenue secured through new distribution agreements signed in the year; the expansion of our operations in Scandinavia; and the launch of a series of new products, the most exciting of which is QTV2 (www.qacoustics.co.uk/q-tv.htm).  


The Group employs over 300 loyal and dedicated colleagues throughout our operations in the UKIreland, Scandinavia and the Far East, all of whom have responded positively to a challenging time. The results for year just ended are a credit to their hard work, enthusiasm and professionalism and on behalf of the Board I thank them all.


The economic outlook is becoming brighter, with most economic indicators, both at home and abroad, showing positive signs of recovery. The Group has positioned itself well to take advantage of the recovery with new products, new contracts, new customers and new channels to market. The 2010 financial year has started well and whilst there will undoubtedly be further turbulence in the wider economic environment, the Board remains confident with regard to the future prospects for the Group.




BOB MORTON

Chairman

23 November 2009








  

ARMOUR GROUP PLC


CONSOLIDATED INCOME STATEMENT

For the year ended 31 August 2009





Note

31 August

2009 

£000

31 August 

2008

£000

Revenue

2

51,614

54,008





Changes in inventory of finished goods and work in progress


(1,060)

2,870

Raw materials and consumables


(29,095)

(31,272)

Employee benefits costs


(9,487)

(9,631)

Depreciation and amortisation expense


(1,413)

(1,075)

Other expenses


(9,031)

(10,871)

Total expenses


(50,086)

(49,979)

Profit from operations


1,528

4,029

Finance expense


(409)

(703)

Finance income


17

166

Share of loss of associated undertakings


(16)

(7)

Profit before taxation

2

1,120

3,485

Taxation expense

3

(234)

(991)

Profit for the year


886

2,494













Earnings per ordinary share

4



Basic


1.4p

3.7p

Diluted


1.4p

3.7p




  

ARMOUR GROUP PLC


CONSOLIDATED BALANCE SHEET

At 31 August 2009





Note

31 August 

2009

£000

31 August 

2008

£000





Non-current assets




Goodwill


21,084

21,082

Other intangible assets


3,112

2,041

Property, plant and equipment


2,044

2,102

Investment in associated undertakings


352

368

Total non-current assets


26,592

25,593





Current assets




Inventories


11,681

12,826

Trade and other receivables


9,876

10,220

Cash and cash equivalents


72

170

Total current assets


21,629

23,216

Total assets

2

48,221

48,809









Current liabilities




Bank overdrafts and borrowings


(3,521)

(6,650)

Trade and other payables


(12,465)

(9,755)

Corporation taxation liability


(580)

(326)

Provisions


(95)

(136)

Total current liabilities


(16,661)

(16,867)





Non-current liabilities




Borrowings


(1,438)

(2,394)

Provisions


(141)

(226)

Deferred taxation liability


(656)

(520)

Total non-current liabilities


(2,235)

(3,140)

Total liabilities

2

(18,896)

(20,007)

Total net assets

2

29,325

28,802

















Equity




Share capital


6,848

6,848

Share premium


8,513

8,513

Other reserves


871

871

Retained earnings


13,602

13,074

Translation reserve


63

68

Share trust reserve


(572)

(572)

Total equity 


29,325

28,802


  

ARMOUR GROUP PLC


CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

For the years ended 31 August 2009






Share

capital

Share

premium

Other

reserves

Retained

earnings

Translation

reserve

Share trust

reserve

Total

equity


£000

£000

£000

£000

£000

£000

£000









At 1 September 2007

6,848

8,513

871

10,919

(7)

(200)

26,944









Profit for the year

-

-

-

2,494

-

-

2,494

Currency translation

-

-

-

-

75

-

75

Total recognised income/(expense)

-

-

-

2,494

75

-

2,569

Shares acquired by share trust

-

-

-

-

-

(372)

(372)

Share-based payments

-

-

-

100

-

-

100

Dividend paid

-

-

-

(439)

-

-

(439)

At 31 August 2008

6,848

8,513

871

13,074

68

(572)

28,802

















Profit for the year

-

-

-

886

-

-

886

Currency translation

-

-

-

-

(5)

-

(5)

Total recognised income/(expense)

-

-

-

886

(5)

-

881

Share-based payments

-

-

-

65

-

-

65

Dividend paid

-

-

-

(423)

-

-

(423)

At 31 August 2009

6,848

8,513

871

13,602

63

(572)

29,325




  

ARMOUR GROUP PLC


CONSOLIDATED CASH FLOW STATEMENT

For the year ended 31 August 2009





Note

31 August 

2009

£000

31 August 

2008

£000





Cash flow from operating activities




Cash generated from operations

6

7,171

3,124

Income taxes recovered/(paid)


156

(1,308)

Net cash from operating activities


7,327

1,816





Investing activities




Acquisition of subsidiary undertaking, net of cash acquired


(2)

(4,302)

Disposal of subsidiary undertaking, net of cash disposed


-

400

Purchase of property, plant and equipment


(604)

(1,196)

Sale of property, plant and equipment


40

147

Expenditure on intangible assets 


(1,853)

(1,506)

Interest received


17

166

Net cash used in investing activities


(2,402)

(6,291)





Financing activities




Dividend paid


(423)

(439)

Repayment of bank loans


(720)

(720)

Repayment of finance lease creditors


-

(26)

Shares acquired by share trust


-

(372)

Interest paid


(475)

(726)

Net cash used in financing activities


(1,618)

(2,283)

Net increase/(decrease) in cash, cash equivalents and bank overdrafts

7

3,307

(6,758)

Currency variations on cash, cash equivalents and bank overdrafts


(6)

74

Cash, cash equivalents and bank overdrafts at the start of the year 


(5,792)

892

Cash, cash equivalents and bank overdrafts at the end of the year


(2,491)

(5,792)






  

ARMOUR GROUP PLC


Preliminary Announcement of the audited financial statements for the year ended 31 August 2009



1.     Accounting Policies


Basis of preparation


The Group's Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively "IFRS") issued by the International Accounting Standards Board as adopted by the European Union ("Adopted IFRS") and with those parts of the Companies Act 2006 applicable to companies preparing their financial statements under IFRS.


While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of IFRS, this announcement does not itself contain sufficient information to comply with IFRS. The Group expects to publish full financial statements that comply with IFRS in December 2009.




2.     Segment Information


The Group operates in the following main business segments:


Armour Auto:                The design, manufacture and supply of products for the in-car communications and entertainment 
                                         market.


Armour Home:              The design, manufacture and supply of products into the Hi-Fi, home theatre, home entertainment and
                                         office furniture 
markets.


Central operations:    The provision of finance and support services, including future product concepts and Hong Kong based 
                                         quality control
, to the other business segments within the Group.


The Group's primary reporting format for reporting segment information is business segments.



Year ended 31 August 2009

Armour 

Auto

£000

Armour 

Home

£000

Central

operations

£000


Total

£000

Revenue

13,092

38,522

-

51,614

Profit/(loss) before taxation

71

3,327

(2,278)

1,120

Balance Sheet





Assets

7,891

18,691

21,639

48,221

Liabilities

(2,166)

(5,756)

(10,974)

(18,896)

Net Assets

5,725

12,935

10,665

29,325

Other





Capital expenditure

188

414

2

604

Depreciation 

213

404

14

631

Amortisation of intangible assets

224

557

1

782

Share-based payments

7

52

6

65











ARMOUR GROUP PLC


Preliminary Announcement of the audited financial statements for the year ended 31 August 2009


2.     Segment Information (continued)



Year ended 31 August 2008

Armour 

Auto

£000

Armour 

Home

£000

Central

operations

£000


Total

£000

Revenue

14,409

39,599

-

54,008

Profit/(loss) before taxation

1,284

4,872

(2,671)

3,485

Balance Sheet





Assets

8,557

18,650

21,602

48,809

Liabilities

(2,281)

(6,538)

(11,188)

(20,007)

Net Assets

6,276

12,112

10,414

28,802

Other





Capital expenditure

210

973

13

1,196

Depreciation 

209

397

13

619

Amortisation of intangible assets

133

323

-

456

Share-based payments

28

57

15

100


The Group's secondary reporting format for reporting segment information is geographic segments.




Revenue by location

of customers

Total net assets by location of assets

Capital expenditure by location of assets


2009

£000

2008

£000

2009

£000

2008

£000

2009

£000

2008

£000

United Kingdom

41,851

45,855

28,854

28,349

(597)

(1,185)

Rest of Europe

5,966

6,346

461

446

(4)

(8)

Rest of world

3,797

1,807

10

7

(3)

(3)


51,614

54,008

29,325

28,802

(604)

(1,196)



3.     Taxation Expense



31 August 

2009

£000

31 August 

2008

£000

Current taxation expense



UK Corporation Tax on profit for the year

(119)

(478)

Adjustment in respect of prior years

61

36

Income taxation of overseas operations

(40)

(47)

Total current taxation expense

(98)

(489)

Deferred taxation expense



UK operations

(104)

(544)

Adjustment in respect of prior years

(36)

62

Overseas operations

4

(20)

Total deferred taxation expense 

(136)

(502)

Total taxation expense

(234)

(991)




ARMOUR GROUP PLC


Preliminary Announcement of the audited financial statements for the year ended 31 August 2009



3.    Taxation Expense (continued)

The taxation assessed for the year is lower (31 August 2008: Lower) than the standard rate of UK Corporation Tax. The differences are explained below: 



31 August 

2009

£000

31 August 

2008

£000

Profit on ordinary activities before taxation

1,120

3,485

Profit multiplied by the rate of UK corporation tax of 28% (2008: 29.17%)

(314)

(1,017)

Effects of:



Expenses not deductible for taxation purposes

(51)

(166)

Taxation credits 

105

40

Recognition of losses carried forward

-

11

Use of previously unrecognised losses

-

20

Lower taxation rates on overseas profit and marginal relief

1

10

Corporate and deferred taxation rate differences

-

13

Adjustments in respect of prior years

25

98

Total taxation expense

(234)

(991)


The 2008 rate of UK Corporation Tax of 29.17% reflected the rate change from 30% to 28% effective from April 2008. Deferred taxation has been provided at the future taxation rate of 28% in both years.


4.    Earnings per Ordinary Share

Basic earnings per ordinary share are calculated using the weighted average number of ordinary shares in issue during the financial year of 65,056,067 (31 August 2008: 67,191,706). Diluted earnings per ordinary share are calculated with reference to 65,056,067 (31 August 2008: 68,044,400) ordinary sharesThe effect of the exercise of options on the weighted average number of ordinary shares in issue is Nil (31 August 2008852,694).


At 31 August 2009, the Armour Employees' Share Trust held 3,424,000 (31 August 20083,424,000ordinary shares. The weighted average number of ordinary shares held by the Armour Employees' Share Trust during the year of 3,424,000 (31 August 20081,288,361are not included in either the weighted average, or diluted weighted average, ordinary shares in issue during the financial year.


Underlying earnings per ordinary share are also shown calculated by reference to earnings before share-based payments. The Directors consider that this gives a useful additional indication of underlying performance. It should be noted that the term "underlying" is not defined under IFRS and may not therefore be comparable with similarly titled profit measures reported by other entities





31 August 2009

31 August 2008



£000

Basic

p

Diluted

p


£000

Basic

p

Diluted

p

Profit for the financial year

886

1.4

1.4

2,494

3.7

3.7

Share-based payments 

65

0.1

0.1

100

0.2

0.1

Underlying earnings

951

1.5

1.5

2,594

3.9

3.8


 



ARMOUR GROUP PLC


Preliminary Announcement of the audited financial statements for the year ended 31 August 2009


5.     Dividend




31 August 

2009

£000

31 August 

2008

£000

Proposed dividend for the year of 0.30p (31 August 2008: 0.65p) per ordinary share

(195)

(423)


The Board is recommending a dividend for the year of 0.30 pence per ordinary share. Subject to approval at the Annual General Meeting, the dividend will be paid on 12 March 2010 to those shareholders on the register at the close of business on 12 February 2010.


The proposed dividend for the year has not been accrued in the Consolidated Balance Sheet as at 31 August 2009. The dividend proposed in the financial statements as at 31 August 2008, and approved by shareholders at the Annual General Meeting held on 29 January 2009, was charged to reserves and paid during the year. 

 


6.    Net Cash Inflow from Operations



31 August

2009

£000

31 August

2008

£000




Profit from operations

1,528

4,029

Depreciation of property, plant and equipment

631

619

Amortisation of intangible assets

782

456

Share-based payments

65

100

Gain on sale of property, plant and equipment

(9)

(68)

Movements before working capital

2,997

5,136

Decrease/(increase) in inventories

1,145

(2,335)

Decrease in trade and other receivables

344

810

Increase/(decrease) in trade, other payables and provisions

2,685

(487)

Net cash from operations

7,171

3,124




7.    Reconciliation of Net Cash Flow to Movement in Net Debt

Net debt incorporates the Group's borrowings, bank overdrafts and obligations under finance leases, less cash and cash equivalents. A reconciliation of the movement in the net debt from the beginning to the end of the year is shown below:



31 August

2009

£000

31 August

2008

£000




Net increase/(decrease) in cash and cash equivalents

3,307

(6,758)

Net cash outflow from debt and lease financing

720

746

Other non-cash movements

(40)

42

Decrease/(increase) in net debt 

3,987

(5,970)

Opening net debt

(8,874)

(2,904)

Closing net debt

(4,887)

(8,874)





ARMOUR GROUP PLC


Preliminary Announcement of the audited financial statements for the year ended 31 August 2009



8.    Publication of non-statutory accounts

The financial information set out in this preliminary announcement does not constitute the Group's financial statements for the year ended 31 August 2009 and the year ended 31 August 2008


The financial statements for the year ended 31 August 2008 were prepared in accordance with Adopted IFRS and have been delivered to the Registrar of Companies. The financial statements for the year ended 31 August 2009 will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The auditors' report on both accounts was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain statements under sections 237(2) or (3) of the Companies Act 1985 (in respect of the 31 August 2008 financial statements) or sections 498(2) or (3) of the Companies Act 2006 (in respect of the 31 August 2009 financial statements).


The full audited financial statements of Armour Group plc for the period ended 31 August 2009 are expected to be posted to shareholders no later than 14 December 2009 and will be available to the public at the Company's registered office, Lonsdale House, 7-9 Lonsdale Gardens, Tunbridge Wells Kent, TN1 1NU and available to view on the Company's website at www.armourgroup.uk.com from that date. 



9.    Annual General Meeting

The Annual General Meeting will be held at the offices of Arnold & Porter (UK) LLP, Tower 42, 25 Old Broad StreetLondonEC2N 1HQ on 28 January 2010.

  


ABOUT ARMOUR


Armour Group is the United Kingdom's leading consumer electronics group within the home and in-car communications and entertainment markets, committed to designing, manufacturing and distributing leading-edge audio and visual products and solutions. 


Armour Group has two principal operating divisions, Armour Home and Armour Auto, and employs over 300 people across eight operating sites in the UKSweden and Hong Kong.


The Group possesses a strong brand portfolio, including more than 6,000 products and accessories, which is underpinned by innovative product development and investment in proprietary technology. 


An unrivalled distribution capability ensures that products are supplied direct to more than 6,000 retail outlets within the UK and to customers in 68 countries worldwide. Armour Group is also a leading supplier of audio and visual technology to a host of non-retail customers including vehicle manufacturers, hotel chains, house builders and custom installers. 


The Group's strength is based on 5 fundamentals:


  • Strong recognised brands

  • Quality product portfolio

  • Structured programme of product innovation

  • Unrivalled distribution into the UK's retail electronics market

  • First class customer service


 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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