Final Results - Year Ended 31 January 2000
Bulgin PLC
25 May 2000
A Year of Good Progress
Bulgin PLC ('Bulgin') announces its unaudited results for
the year ended 31 January 2000. Bulgin designs and
manufactures electromechanical components and power
electronics products for use in a wide variety of sectors
including security, communications, office equipment,
control equipment, instrumentation, medical, marine,
construction, utilities, lighting, test equipment and
military. Bulgin also operates a business which trades
electronic components.
Highlights
* Profitability restored
* Debt reduced
* Enfranchisement of 'A' shares achieved in April 2000
* Strong order book including £1 million contract won by
Bulgin Power Source from Logica
* Export sales increased
* Improved operating margins
* Winner of The Guild of Shareholders' 'Most Investor
Friendly' award
Financial Summary
* Turnover on continuing operations for the year £13.4 million
(1999: £12.1 million)
* Profit before tax and exceptional items of £745,000 (1999:
£152,000)
* Profit before tax of £665,000 (1999: £271,000 loss)
* Cash generated £1,161,000 (1999: £80,000 utilised)
* Net gearing 3% (1999: 43%)
* Final dividends 0.25p per share, post enfranchisement
(1999: 1.0p per share, pre enfranchisement; 0.65p per share,
post enfranchisement)
Chairman Alastair Winter commented:
'I am very pleased with progress. The Group has returned to
profitability, debt has been significantly reduced, the
strength of sterling has been accommodated, shareholders
have supported the Board on the enfranchisement issue, we
have strong new products and the management has been
strengthened.
'I am disappointed with the delay in completing the intended
acquisitions, discussions on which we announced on 27th
January 2000. This has been primarily due to due diligence
issues and vendor changes in the businesses for sale. I
look forward to making further announcements imminently.
'Our strategy is to develop the Group by directing resources
towards the most attractive value-added opportunities,
including acquisitions. Bulgin intends to exploit
opportunities for development of the electronics trading
business into a full scale logistics partner for its growing
number of international clients.
'The relevant business climate has improved and our analysis
suggests that this improvement will continue throughout the
current year. We are confident that the current year will
see further progress'.
For further information please contact:
Alastair Winter, Chairman
Brian Emerson, Chief Executive
Bulgin Plc
Tel: 020 8477 9300
Rick Thompson, Director
Mike Seabrook
Teather & Greenwood Limited
Tel: 020 7426 9073
Hamish McFall
Ana Nogales
Tavistock Communications Ltd
Tel: 020 7600 2288
CHAIRMAN'S STATEMENT
Bulgin PLC is a group of specialist and commodity businesses
which address markets for electrical and electronic products
and services. The year under review has been an important
one in the Group's development. Following disposal of the
business and assets of Cirkit Distribution Ltd, on which I
reported last year, and the subsequent sale of the
Broxbourne property in August 1999, Bulgin became a design,
manufacturing and logistics services operation.
Results
In the year to 31st January 2000 turnover on continuing
operations increased by 11% from £12.1 million to £13.4
million. Total turnover fell by 14% from £16.8 million to
£14.4 million. Profit before exceptional items and taxation
increased by 390% to £745,000 (1999 - £152,000). Net gearing
decreased to 3% from 43% and cash increased by £1.2 million
compared with cash consumed of £80,000 in the previous year.
Sale of Investment
During November 1999 we sold our holding of 930,233 shares
in Deltron Electronics PLC which was received as part of the
proceeds from the disposal of Cirkit Distribution. Sale of
the shares was realised at a small profit.
Enfranchisement
On 16th March 2000 our shareholders voted overwhelmingly in
favour of the Board's proposals for enfranchisement of the
'A' Non-Voting Ordinary shares. All shareholders now have
voting rights and the new single class of Ordinary share
started trading on 7th April 2000. The company's improved
shareholder communications policy was recognised by receipt
of the 'Most Investor Friendly' award of The Guild of
Shareholders at an event on 12th May 2000.
Dividends
Your Board has reviewed its dividend policy and wishes in
future to maintain dividend cover of at least 3 times to
allow for sensible re-investment. For the year under review
your Board is recommending a reduced final dividend of 0.25p
per share, post enfranchisement (1999: 1.0p per share, pre
enfranchisement or 0.65p per share, post enfranchisement) to
shareholders on the register at 16 June 2000.
Acquisitions
On 27th January 2000 we announced that the company was in
discussions with a view to acquiring two power electronics
businesses from a single vendor. It was our expectation that
the acquisitions would be completed by the end of March.
However, due to matters arising from our due diligence
exercise and subsequent changes in the businesses for sale,
the acquisition process is ongoing. The businesses in
question remain completely in line with our development
strategy and I look forward to making a further announcement
in due course.
Future Strategy
Our strategy is to develop the Group by directing resources
towards the most attractive value-added opportunities
including acquisitions. The power electronics business will
continue to focus on specialist requirements in the
marketplace. The electromechanical business is well
established and has substantial growth potential. Production
constraints will be relieved by expansion plans currently
being implemented. Your Board intends to exploit
opportunities for development of the electronics trading
business into a full scale logistics partner for its growing
number of international clients.
Outlook
The relevant business climate has improved and our analysis
suggests that this improvement will continue throughout the
current year.
CHIEF EXECUTIVE'S REVIEW
All business elements of the Group progressed. The
electromechanical business in Barking and the power
electronics operation in Lincoln experienced strong growth
in customer orders. The electronic component trading
business, now located in Hertford, has moved forward
particularly in the USA market.
Bulgin Components, which is based in Barking, designs and
manufactures mains connectors, waterproof connectors,
switches, battery holders, fuseholders, indicators and
filters for a wide range of markets including security,
communications, office equipment, control equipment,
instrumentation, medical, marine, construction, utilities
and lighting. The operation is a medium volume manufacturer
with almost 3000 products and turning out up to 20 million
pieces per year. Customers include original equipment
manufacturers (OEMs), catalogue distributors, overseas
distributors and contract equipment manufacturers (CEMs) to
whom the major OEMs are increasingly outsourcing their
manufacturing.
Turnover increased by 11% to £10.2 million. Net operating
margins improved and the order book remains strong at
approximately 10 weeks sales. Sales to the USA increased in
response to our marketing initiatives and further progress
is anticipated.
Notable among new product introductions was the launch of
the 900 series Buccaneer connector which addresses a gap in
the market for a robust connector suitable for hostile
environments. Development costs for this product were
approximately £250,000. Early orders are encouraging and
interesting new variants are already under consideration.
On 15th May 2000 Richard Hinds was appointed Managing
Director of Bulgin Components and he will implement the next
stage of our strategic plan for the company's future. This
involves significant investment in automation and upgrading
of production and commercial systems.
Bulgin Power Source, which is based in Lincoln, designs and
manufactures custom and standard power supply solutions for
the information technology, security, automation,
communications and CATV markets. Bulgin Power Source also
provides CATV network support services. The company has
concentrated its marketing activities and custom design
skills on more value-added strategic customer projects
during the year.
A small loss was incurred on turnover unchanged from the
previous year at £2.3 million. Bulgin Power Source traded at
a profit in the second half. More significantly the order
book has improved in quality and quantity and represented
more than 6 months sales at year end. After the year end
Bulgin Power Source won a £1 million contract to supply
custom designed power supplies to a major systems supplier
to the gas industry. The delivery dates for much of the
order book fall into the second half of the current year and
consequently Bulgin Power Source will report a loss for the
first half but is expected to return an acceptable profit
for the year as a whole.
Cirkit Holdings now consists principally of BP Purchasing,
following the disposal of Cirkit Distribution in May 1999,
whose results up to that date have been included as
discontinued operations. BP Purchasing has been established
as a discreet business unit in Hertford supplying electronic
component sourcing services to manufacturers. While this is
a highly competitive market, BP Purchasing has experienced
sales growth of 68% in the year under review. The additional
margin generated has been re-invested in the development of
the business for the future including recruitment of
additional sales personnel and new computer systems. Much of
the business growth has resulted from more aggressive use of
internet based electronic trading exchanges. These excellent
tools allow BP Purchasing to access customers worldwide and
it is our belief that progressive investment will continue
to generate sales growth.
Group Profit and Loss Account
Year ended 31January 2000
Unaudited Audited
2000 1999
(as
£'000 restated)
£'000
Turnover - continuing operations 13,373 12,058
- discontinued operations 1,039 4,740
-------- -------
14,412 16,798
Cost of Sales (9,284) (10,907)
-------- --------
Gross Profit 5,128 5,891
Net operating
expenses - normal (4,237) (5,509)
- exceptional (189) (423)
-------- -------
Operating profit - continuing operations 707 199
- discontinued operations (5) (240)
-------- --------
702 (41)
Discontinued
operations;
(Loss) on sale of
operations (25) 0
Profit on disposal
of freehold property 134 0
-------- --------
Profit / (loss) on ordinary
activities before interest 811 (41)
Net interest payable (146) (230)
-------- --------
Profit / (loss) on ordinary
activities before taxation 665 (271)
Taxation on profit / (loss)
on ordinary activities (188) 64
-------- -------
Profit / (loss) on ordinary
activities after taxation 477 (207)
Dividends (186) (368)
------- --------
Transfer to / (from) reserves
291 (575)
===== =====
There were no recognized gains or losses for the year other than included
in the profit and loss account.
Note of Historical Cost Profits and Losses
Year ended 31 January 2000
Unaudited Audited 1999
2000 (as
£'000 restated)
£'000
Reported profit / (loss) on ordinary
activities before taxation 665 (271)
Realisation of property revaluation
gains of previous years 120 -
Difference between a historical cost
depreciation charge and the actual
depreciation charge of the period
calculated on the revalued amount 9 12
-------- -------
Historical cost profit / (loss) on
ordinary activities before taxation 794 (259)
===== =====
-------- --------
Historical cost profit / (loss) for the period after
taxation and dividends 420 (563)
===== =====
Notes
1. It is intended that a final dividend of 0.25p per
share will be paid on 17 July 2000 to holders on the
register at 16 June 2000.
2. Earnings / (loss) per share
The calculation of the basic earnings per share is
based on the earnings attributable to ordinary
shareholders divided by the weighted average number of
shares in issue during the year.
The calculation of the diluted earnings per share is
based on the basic earnings per share, adjusted to
allow for the issue of shares on the assumed conversion
of all dilutive options.
On 6 April 2000 the 'A' Non-Voting Ordinary shares were
enfranchised with the scrip issue of 16,000,000
Ordinary shares of 5p each. The calculation of the
post enfranchisement basic and diluted earnings per
share takes into account the scrip issue of ordinary
shares.
The calculation of earnings is based on the Group
profit after taxation of £477,000 (1999: loss
£207,000).
The weighed average number of shares used in the
calculations is set out below.
Unaudited Audited
2000 1999
Basic Diluted Basic Diluted
Weighted average
number of
shares in issue
- Ordinary
shares 2,000,000 2,000,000 2,000,000 2,000,000
- 'A' Non-
Voting
Ordinary
shares 27,190,000 27,190,000 26,955,753 26,955,753
--------- --------- --------- --------
29,190,000 29,190,000 28,955,753 28,955,753
- share option - -
dilution 87,975 209,015
--------- --------- --------- ---------
29,190,000 29,277,975 28,955,753 29,164,768
- enfranchisement
scrip issue 16,000,000 16,000,000 16,000,000 16,000,000
---------- ------------ ----------- ----------
45,190,000 45,277,975 44,955,753 45,164,768
========= ======== ========= =========
Earnings /
(loss) per share
- pre
enfranchisement 1.63p 1.63p (0.71p) (0.71p)
- post
enfranchisement 1.06p 1.05p (0.46p) (0.46p)
Group Balance Sheet
Year ended 31 January 2000
Unaudited Audited
2000 1999
£'000 £'000
Fixed Assets
Intangible assets 129 70
Tangible assets 3,497 4,111
-------- --------
3,626 4,181
Current Assets
Stocks 1,344 2,189
Debtors 2,237 2,712
Cash at bank and in hand 2,111 771
-------- -------
5,692 5,672
Creditors: amounts falling due within
one year (3,201) (3,748)
-------- -------
Net Current Assets 2,491 1,924
-------- -------
Total Assets Less Current Liabilities 6,117 6,105
Creditors: amounts falling due after
more than one year (1,436) (1,827)
Provisions For Liabilities And Charges (163) (60)
-------- -------
Net Assets 4,518 4,218
===== =====
Capital And Reserves
Called - up share capital 1,460 1,454
Share premium 834 831
Revaluation reserve 125 254
Profit and loss account 2,099 1,679
-------- --------
Shareholders' funds - Equity 4,518 4,218
===== =====
Group Cash Flow Statement
Year ended 31 January 2000
Unaudited Audited
2000 1999
£'000 £'000
Cash flow from operating activities 979 1,478
Returns on investments and servicing of (176) (194)
finance
Taxation 3 (261)
Capital expenditure and financial investment 166 (487)
Acquisitions and disposals 1,257 0
Equity dividends paid (365) (362)
--------- --------
Net cash inflow before financing 1,864 174
Financing (703) (254)
-------- --------
Increase / (Decrease) in cash in the year 1,161 (80)
===== =====
Notes:
1. Audited financial statements will be sent to shareholders
on Wednesday 14 June 2000. Copies of this announcement are
available at the Company's registered office at Bypass Road,
Barking, Essex, IG11 0AZ and copies of the audited financial
statements will be so available for at least 14 days from
Wednesday 14 June 2000.
2. The Company's financial statements for 2000, from which the
figures contained in this statement have been extracted, have
not yet been reported on by the Company's auditors or filed with
the Registrar of Companies. The financial statements for 1999,
from which the figures contained in this preliminary statement
have been extracted and restated, have been filed and contain an
unqualified audit report with no reference to section 237 of the
Companies Act 1985.
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