Final Results

RNS Number : 3179W

Carclo plc

10 June 2008

 



For immediate release

10 June 2008

Carclo plc

('Carclo')

The financial highlights for the year to 31 March 2008 are summarised below:

• Underlying operating profits up 19.1% primarily due to an excellent performance in Precision Products

• Continued good growth in medical and specialist moulding in Technical Plastics

• Underlying EPS increased by 38.2% to 10.5 pence

• Final dividend increased by 8.3% to 1.3 pence per share

• Conductive Inkjet Technology starting to generate revenues

• New five year bank facilities agreed in the year under review

Commenting on the results, Christopher Ross, chairman said:

'The group is very well placed to make further progress in the new financial year. Indeed, the new year has started well. 

The industry sectors served by Carclo such as medical and aerospace are resilient and less likely to be impacted by the current uncertainties facing the world economy. The medical and specialist businesses within Technical Plastics continue to win new work and the order book within Precision Products underpins our confidence in the medium term.

Our investment in new technologies is starting to generate revenues and we anticipate good sales growth from Conductive Inkjet Technology in the coming year.

The board is confident that the strategic focus of the group will continue to deliver good progress.'

Enquiries

Carclo plc
Ian Williamson, Chief Executive
Robert Brooksbank, Finance Director	01924 268040
Weber Shandwick Financial	020 7067 0700
Richard Hews
James White

A presentation for analysts will be held at 9.30 a.m. on 10 June 2008 at the offices of Weber Shandwick Financial, Fox Court, 14 Gray's Inn Road, London WC1X 8WS  

Notes to editors

• Carclo plc is a global supplier of technical plastic components. It is a public company whose shares are quoted on the London Stock Exchange.

• 75% of sales are derived from the supply of fine tolerance, injection moulded plastic components, which are used in medical, automotive, telecom and electronics products. This business, Carclo Technical Plastics, operates internationally in a fast growing and dynamic market underpinned by rapid technological development.

• 25% of sales are derived from the supply of manufactured systems to the automotive and aerospace industries.

• Carclo's strategy is to grow the specialist businesses, expand in low cost regions and to invest in new technologies and proprietary know-how.

Chairman's statement

Overview

The year to 31 March 2008 was one of further excellent progress for Carclo:

• Underlying operating profits from continuing operations improved by nearly 20%, led by an excellent performance in Precision Products

• Continued good growth in medical and specialist moulding improving the quality of the Technical Plastics business

• Investment in new technologies continues with Conductive Inkjet Technology starting to generate revenues

• New five year bank facilities agreed on excellent terms 

• Final dividend increased by 8.3% to 1.3 pence per share

Underlying operating profits from continuing operations, before exceptional charges, increased by 19.1% to £5.7 million. The Precision Products division had a particularly good year, increasing its profits by £1.0 million to £3.3 million. The Technical Plastics division also performed well. Sales and profits were modestly ahead of the prior year but margin progression was held back by transition costs. The mix of business continues to improve with more secure medical work replacing lower quality automotive business which will underpin margin improvement going forward. 

The improved profitability resulted in underlying earnings per ordinary share ('EPS') increasing by 38.2% to 10.5 pence (2007 - 7.6 pence). The group's profit before tax was reduced by £1.3 million of exceptional charges compared to a net exceptional credit of £2.6 million in the prior year (which benefitted from £3.7 million of property profits). As a result, profit before tax was £4.5 million (2007 - £7.2 million) and basic EPS was 7.7 pence (2007 - 12.1 pence).

Cash flow and funding

The group has achieved a secure and certain position over its funding. New £20.0 million five year term loan facilities were secured on terms comparable to the facilities they replaced. This has allowed the group to focus on developing its core medical and specialist businesses, to invest further in new technologies and to resume business acquisitions.

Net debt at 31 March 2008 was £13.7 million (2007 - £12.8 million).  

Dividend

The board is recommending a final dividend of 1.3 pence, an increase of 8.3% on the prior year. This gives a total dividend for the year of 1.9 pence per share (2007 - 1.6 pence per share). 

Subject to shareholder approval, dividend payments will be posted on 11 September 2008 to shareholders on the register at close of business on 8 August 2008. The shares will be traded excluding the right to the dividend from 6 August 2008.

Employees

I would like to thank all those employed by us in the year under review for their significant contribution.

Outlook

The group is very well placed to make further progress in the new financial year. Indeed, the new year has started well. 

The industry sectors served by Carclo such as medical and aerospace are resilient and less likely to be impacted by the current uncertainties facing the world economy. The medical and specialist businesses within Technical Plastics continue to win new work and the order book within Precision Products underpins our confidence in the medium term.

Our investment in new technologies is starting to generate revenues and we anticipate good sales growth from Conductive Inkjet Technology in the coming year.

The board is confident that the strategic focus of the group will continue to deliver good progress.

Christopher Ross

10 June 2008

Chief executive's review

Strategic overview

Longer term shareholders will forgive me for again commencing this review with the words 'our strategy is clear and it is working'.

Our strategy is:

• to grow our specialist businesses including medical plastics and LED lighting

The last year has been particularly successful for our medical plastics business. We have won significant new contracts backed by longer term supply commitments. Additionally customers with whom we have long term relationships such as Axis-Shield plc and Siemens Healthcare Diagnostics are now generating significant revenues for our medical business. With medical well established as the driver of growth, we are now taking the last steps in our long running restructuring programme with the exit from lower margin automotive moulding.

Our LED optics and lighting businesses are also growing strongly. We are enjoying compound growth of 40.0% in our LED optics business and have our eyes set on market leadership. Our LED lighting business - serving the supercar market - has had a truly exceptional year in terms of contract wins. At Wipac, we have increased the design resource from 3 to 15 CAD workstations in the last 12 months - all funded by customer development contracts. This business will deliver several years of good growth as these new premium vehicles are launched.

• to continue our expansion in low cost regions

Our wholly owned operations in the Czech Republic and China are now substantial with a fifth of our underlying operating profits earned in low cost regions. We also have three very successful manufacturing partners in Hungary, China and Taiwan producing products for us under contract. This gives us tremendous flexibility in sourcing and distribution. In India we are planning to establish a small assembly operation to support one of our global customers.

• to increase our investment in new technologies and proprietary know-how

Our investment is now firmly focused on Conductive Inkjet Technology ('CIT') and Platform Diagnostics Limited. Technical and commercial progress at CIT has been excellent and this coming year should see good revenue growth. CIT has opportunities across a broad spectrum of very large markets and the key challenge for the Carclo board is to deliver the value of this growth potential to Carclo shareholders.

This strategy has positioned Carclo in markets with excellent long term growth potential. We have the security of long term supply contracts and good visibility of future growth in an increasing proportion of our business. The end markets for our products and services are also quite defensive and will be less affected by the economic uncertainty facing the global economy.

Our profits have recovered strongly in the last couple of years and there is still further recovery to come as the operating margins in Technical Plastics continue to improve. At the same time, the superior growth opportunities in medical and LED lighting will drive profitability growth for a number of years to come. Added to this, CIT is set to add a step change to earnings in the medium term. 

Operating review

	Carclo Technical Plastics		Carclo Precision Products
	2008	2007	2008	2007
Turnover - continuing operations	£59.5m	£58.7m	£22.3m	£19.6m
Underlying operating profit *	£3.7m	£3.5m	£3.3m	£2.3m
Net assets	£43.4m	£44.5m	£8.9m	£7.6m
Underlying operating margin	6.2%	6.0%	15.0%	11.6%
Return on capital employed *	8.6%	8.0%	37.4%	29.8%
Average number of employees	910	877	214	198
* before rationalisation costs and exceptional bad debts

Carclo Technical Plastics

Underlying operating profits in Carclo Technical Plastics increased by 4.9% to £3.7 million on sales slightly up on last year at £59.5 million (2007 - £58.7 million). The operating margin increased to 6.2% (2007 - 6.0%) with the division benefiting from the better margins in our medical and optical businesses. Profit progression was held back by transitional costs associated with the integration of new business and the reorganisation of the Slough facility.

We continue to win significant new contracts in our medical business. During the year we were nominated as development and production partner for two new inhaler programmes with very significant volume potential. As already reported, our largest customer in medical diagnostics elected to sole source all of its single-use components from Carclo. This represents a tremendous vote of confidence in our global business strategy. We continue to win significant new customers in the medical diagnostics field.

In Shanghai we commissioned new clean room assembly facilities which contributed to a near doubling of our capacity in China.

Over the last few years, as the medical and specialist businesses have grown, we have been reducing our exposure to automotive and telecom markets. By carefully managing this transition we have been able to redeploy assets and refurbish facilities with only modest capital expenditure. The moulding of components for automotive markets accounted for less than 20% of division sales last year and, not surprisingly, these sales generate the lowest margins in the division. With medical growing strongly, we plan to exit from almost all of our remaining automotive business during the current year. This will make space to absorb the new contracts we have won in the last year. One small facility in the UK is likely to close.

These actions - long anticipated and planned - represent the final step to achieve our clearly stated objective of returning the division to double-digit operating margins.

Carclo Precision Products

Underlying operating profits in Carclo Precision Products increased by 47.7% to £3.3 million on sales of £22.3 million (2007 - £19.6 million). The performance of the smaller aerospace and engineering business was satisfactory. The improvement came from our specialist automotive products business - Wipac. The operating margin at 15.0% in this division is excellent.

Wipac has two business units - communications and specialist lighting. The communications business provides antennas and cables principally to Ford. This is a stable business which is not expected to grow in the longer term, although in the year it did benefit from a temporary surge in demand for technically more sophisticated multiband antennas. The specialist lighting business designs and produces highly styled lights for luxury supercars. These lights are now mostly based on high-power LED technology where Carclo has a leading position in the supply of optics and the design of LED light engines. It is the specialist lighting business which is driving the growth of Wipac.

In the last year we have won design and development contracts for new vehicle platforms with a total value of £7.5 million. At the target volumes Wipac will enjoy product sales totalling £20.0 million over the typical 5 year life of the vehicles. As these vehicles are launched from 2009 onwards, this will drive growth in Wipac for some years to come. Last year was exceptional in terms of contract awards but quote activity continues to be very strong.

We took the first steps last year to exploit our niche technology in the automotive aftermarket - we launched the world's first LED driving light, we acquired the UK's leading distributor of aftermarket lights and next month we will launch a stunning Daytime Running Light based on our LED technology.

Technology investments

Conductive Inkjet Technology ('CIT')

This was the transitional year for CIT. At the start of the year CIT was still primarily an R & D company - 72% owned by Carclo - developing applications of its proprietary catalytic inks in selected markets. CIT is now a wholly owned Carclo subsidiary, with its own production and development facilities, and with proven products and solutions across an ever expanding applications universe.

The main focus of technical development has been the MetalJet 6000 high speed roll to roll print line. This equipment will produce RFID antennas in high volumes, aiming to be at the lowest component and capital cost. The prototype MetalJet 6000, produced with our original partner, did not have sufficient print accuracy for UHF antennas. For the production MetalJet 6000 we have teamed with Inca Digital Printers Limited (based in Cambridge) and FUJIFILM Dimatix Inc to produce a printer with greatly improved resolution and accuracy. The need to change partner has caused a slight delay but the new printer will be installed in CIT's facility in June 2008.

First contracts have already been negotiated for product supply. The highest volume contract is for a combined RFID antenna and sensor used to monitor temperature in transit by logistics companies. We have also signed a collaboration agreement with a major Korean conglomerate for the supply of RFID antennas and MetalJet 600i prototyping equipment. This agreement envisages the sale of a full scale MetalJet 6000 line in 2009 and will give us a strong foothold in the Asian markets.

In addition to the MetalJet 600i for RFID applications, we have sold two further MetalJet 2000 systems for photovoltaic research, and a MetalJet 4000 for the flat panel display market. There are now seven companies and institutions working under license from CIT in various application fields.

We have now completed our first stage programme with Cambridge Display Technology Limited ('CDT') for mobile phone displays which was funded by the Department of Business, Enterprise & Regulatory Reform ('BERR', formerly the DTI). The encouraging results have enabled us to secure joint funding with CDT of £0.9 million from BERR, to develop scalable manufacture of electrodes for OLED devices including displays, lighting and photovoltaics. This 18 month programme will commence in June 2008. Meanwhile, our BERR funded programme with Epigem Limited to create alternatives to transparent ITO electrodes for flexible OLEDs has started off very well and early results are extremely positive.

With several customers we are evaluating the use of our fine line technology to produce capacitive touch screen devices. Our technology offers significant cost and performance benefits over the existing process of patterning of ITO and relies predominantly on existing manufacturing equipment, thus reducing barriers to entry into this high growth area.

Our developments within photovoltaics have continued and we have now increased our levels of co-operation and development to encompass Europe's leading solar cell research facility as well as a leading plating equipment manufacturer. Our focus of development is on rigid silicon based etchants and dopants using inkjet deposition methods. We anticipate completion of our development phase by the end of 2008.

We have a number of advanced projects for medical sensors. For one customer, we have adapted our catalyst technology for flexographic printing opening up several further opportunities for high volume manufacture where inkjet is not appropriate.

CIT is set to generate good revenue growth in this coming year.

Platform Diagnostics Limited ('PDL')

PDL has had a good first year. We now have a working assay based on Capillary Agglutination Technology and we are reviewing the commercialisation plan for this assay with our partner, BBI Holdings plc. We are working with a number of other companies to develop products for the Point Of Care diagnostic market. There is an increasing recognition in this emerging market of our unique capabilities in micro-moulding, surface coatings and optics.

Ian Williamson

10 June 2008

Finance director's review

Financial summary

	2008 £million	2007 £million
Turnover - continuing	81.3	78.0
Divisional operating profit	7.1	5.8
Unallocated	(1.4)	(1.0)
Underlying operating profit from continuing operations	5.7	4.8
Exceptional items	(1.3)	2.6
Net interest	0.1	(0.2)
Profit before tax	4.5	7.2
Taxation	-	(0.7)
(Loss) / profit on disposal of discontinued operations	(0.2)	0.2
Profit attributable to ordinary shareholders	4.3	6.7
Ordinary dividend	(1.0)	(0.7)
Surplus for the year	3.3	6.0
Divisional operating margin from continuing operations	8.7%	7.4%
Basic earnings per share	7.7p	12.1p
Underlying earnings per share	10.5p	7.6p

Turnover from continuing operations increased by 4.2% to £81.3 million (2007 - £78.0 million) and this primarily reflects the strong performance by Wipac within our Precision Products division. Although the weaker US dollar reduced reported turnover and profits in our US operations, this currency impact was broadly mitigated by the affect of the strengthening Czech Koruna on reported sales and profits in our Czech Republic operation.

Underlying operating profit from continuing operations was £5.7 million (2007 - £4.8 million). Divisional operating profit increased by £1.3 million to £7.1 million (2007 - £5.8 million). However, unallocated costs of £1.4 million (2007 - £1.0 million) were higher mainly due to a reduction in group rental income as a result of the property disposals that were completed in the prior year. 

Profit before tax was £4.5 million (2007 - £7.2 million), however, it should be noted that last year's profit before tax included a £3.7 million profit from the disposal of group properties. Included in the profit before tax is a £1.1 million (2007 - £1.1 million) pensions net financing credit based on the requirements of IAS 19 'Employee Benefits'. Rationalisation costs amounted to £1.2 million (2007 - £0.6 million) and the majority of these costs related to the re-organisation of our Slough facility in order to transfer a number of its larger programmes to lower cost facilities within the group.

Group net debt was £13.7 million (2007 - £12.8 million) at the year end. This provides an acceptable level of headroom on the group's new £20.0 million revolving credit facilities. Net bank interest payable was £1.0 million (2007 - £1.3 million). As expected, financing costs reduced this year due to the lower average level of borrowings and despite the impact of higher LIBOR rates.

The group tax charge for the year is nil (2007 - £0.7 million). The reduction in the tax charge is due to a prior year deferred tax credit which has occurred as a result of the utilisation of previously unrecognised capital losses to offset taxable profits. The group expects to continue to benefit from the use of prior year losses and consequently we do not expect the effective tax rate to normalise for a few years. No UK tax was payable during the year although the group did make a tax payment in the Czech Republic.

The group booked a loss on disposal of discontinued operations of £0.2 million (2007 - a net profit of £0.2 million). This relates primarily to the write down of deferred consideration in respect of the disposal of the group's CTP Gills Cables Limited business in 2006 for which it is now anticipated that no further consideration will be received.

The profit attributable to ordinary shareholders was £4.3 million (2007 - £6.7 million). The board is recommending an increased final dividend for the year of 1.3 pence per ordinary share.

Net debt and gearing

	2008 £million	2007 £million
Underlying cash flow	9.3	6.0
Interest and tax	(1.2)	(1.5)
Capital expenditure	(3.7)	(2.3)
Free cash flow	4.4	2.2
Pension payments above regular cost	(1.4)	(2.0)
Other non recurring	(0.9)	6.2
Issue of share capital	-	0.3
Equity dividends	(0.9)	(0.7)
Cash flow available for corporate activities	1.2	6.0
Development expenditure	(1.2)	(1.2)
Acquisitions and disposals	(0.9)	2.1
Exchange movement	-	1.1
(Increase) / decrease in net debt in year	(0.9)	8.0

Net debt comprises interest bearing loans and borrowings less cash and cash deposits.

Net borrowing increased in the year by £0.9 million to £13.7 million (2007 - £12.8 million). This represents gearing of 27.6% (2007 - 27.3%) after excluding the net pension surplus.

Underlying cash flow from operations was up sharply at £9.3 million (2007 - £6.0 million). This reflects a reduction in group working capital of £0.4 million over the year despite the increase in turnover and various programme transfers in the UK businesses. Group capital expenditure was £3.7 million (2007 - £2.3 million) representing 111.9% of the total group depreciation charge (2007 - 77.5%). This is the first year for a number of years that group capital expenditure has exceeded depreciation and this is a result of the expansion of the group's clean room facilities in its medical businesses. Free cash flow doubled to £4.4 million (2007 - £2.2 million).

Pension contributions of £1.4 million (2007 - £2.0 million) above the regular pension cost were made during the year. Other non-recurring cash outflows of £0.9 million predominantly related to the re-organisation of the Slough facility.  

Development expenditure of £1.2 million (2007 - £1.2 million) represents the capitalised cost of research and development expenditure on Conductive Inkjet Technology during the year.

There was a net cash outflow of £0.9 million for the acquisition and disposal of businesses during the year.  

Property and business disposals

The group received £1.0 million of deferred consideration, before costs, relating to the disposal of its ECC Card Clothing businesses in June 2005. The group has received a total of £1.6 million of a maximum deferred consideration payable of £1.7 million in relation to this disposal.

No surplus property disposals were completed by the group during the year and at the year end the group had surplus properties with a net book value of £1.3 million. The group has recently sold for £0.8 million its Prospect Mills site in Cleckheaton, West Yorkshire, which had a net book value of £0.5 million. Our remaining surplus property, with a book value of £0.8 million, is expected to be sold in the current financial year.

Ultra acquisition

During the year the group acquired the business and assets of Ultra Auto Cosmetics ('Ultra'), 

a leading distributor of aftermarket automotive lighting. The cash consideration paid of  

£1.4 million was based on an agreed premium to the net asset value of the business (excluding the trade debtor book). Further deferred consideration of up to £0.25 million is payable dependent on the performance of the business over the next year.

Conductive Inkjet Technology ('CIT')

The total investment in research and development by CIT made during the year was £1.2 million and these development costs have been capitalised. In addition, capital expenditure of 

£0.2 million was required on plant and equipment to develop the contract manufacturing and clean room facilities at our Cambridge site. The group balance sheet now includes intangible assets totalling £11.4 million which relate to CIT. Of this amount £4.4 million relates to capitalised research and development costs funded by Carclo over the last four years to drive progress forward on this project. The balance of £7.0 million is assigned to the fair value of patents and goodwill which arises from the accounting treatment of the acquisitions of the minority holdings from our original joint venture partner. During the year CIT generated revenues of £67,000 against which £45,000 of amortisation was charged and this reflects the commencement of the commercialisation of the CIT technology.

The remaining minority shareholding in CIT was acquired during the financial year. The consideration paid to Xennia Technology Limited ('Xennia') for its 25.6% shareholding was £1.32 million, and the initial consideration of £1.07 million was in the form of 869,565 newly issued Carclo ordinary shares and £0.1 million cash. A further cash payment of £0.25 million was made to Xennia for transitional technical support and the release of certain intellectual property rights. Additionally, deferred consideration of a maximum of £0.75 million is payable in cash dependant on the performance of CIT in the period to 31 March 2010.

Financing 

The group completed its re-financing early in the financial year before conditions in the credit market began to deteriorate. New medium term loans totalling £20.0 million were formalised with two banks on terms similar to the group's previous facilities. In addition to the five year multi-currency revolving credit facilities, the group also agreed total bank overdraft facilities of £10.5 million. As part of the re-financing agreement the group has provided the banks with security over the current assets of its three main UK trading subsidiaries. As at 31 March 2008 the value of this security was £18.5 million and this represents a substantial reduction in the level of securitisation compared to the previous financing arrangement.

As at 31 March 2008 total drawings on the medium term loan facilities were £14.3 million.

Pensions

The IAS 19 operating charge to income for the year was £0.7 million (2007 - £0.6 million). The small increase in this charge has occurred despite falling employer cash contributions and this is due to the revised assumptions used for contribution rates following the results of the actuarial valuation last year. The IAS 19 financing credit, which represents the difference between the expected return on plan assets and the financing charge on the pension scheme liability was £1.1 million (2007 - £1.1 million).  

Under IAS 19 the aggregate pension deficit/surplus must be reflected in the group balance sheet. As at 31 March 2008 the IAS 19 surplus was a net £0.6 million (2007 - a deficit of 

£8.4 million, net of deferred tax). The schemes have moved into surplus under IAS 19 due to a significant increase in the corporate bond yield which is used to discount the scheme liability.

As part of the agreed funding plan the group has now formalised the grant of security over freehold UK property assets with a current market value of approximately £10.0 million. 

At the group's request the trustees of the two group pension schemes have completed the merger of the two schemes and this should reduce ongoing scheme administration costs.

Robert Brooksbank

10 June 2008

Consolidated income statement 

 year ended 31 March

				2008				2007
		Continuing operations  £000	Discontinued operations  £000	Total  £000		Continuing operations  £000	Discontinued operations  £000	Total  £000
Revenue		81,274	-	81,274		78,030	1,025	79,055
Underlying operating profit
Operating profit before exceptional costs		5,713	-	5,713		4,797	22	4,819
- rationalisation costs		(1,244)	-	(1,244)		(593)	-	(593)
- exceptional bad debts		(93)	-	(93)		-	-	-
After exceptional costs		4,376	-	4,376		4,204	22	4,226
Operating profit		4,376	-	4,376		4,204	22	4,226
Site closure costs		-	-	-		(561)	-	(561)
Profit on sale of properties		-	-	-		3,722	-	3,722
Profit before financing costs		4,376	-	4,376		7,365	22	7,387
Finance revenue		246	-	246		355	7	362
Finance expense		(1,267)	-	(1,267)		(1,691)	-	(1,691)
Other finance revenue - retirement benefits		10,422	-	10,422		9,996	-	9,996
Other finance expense - retirement benefits		(9,275)	-	(9,275)		(8,865)	-	(8,865)
Profit before tax		4,502	-	4,502		7,160	29	7,189
Income tax expense		-	-	-		(713)	(2)	(715)
Profit after tax but before profit / (loss) on discontinued operations		4,502	-	4,502		6,447	27	6,474
Profit on disposal of discontinued operation, net of tax		-	-	-		-	342	342
Loss on disposal of discontinued operation, net of tax		-	(250)	(250)		-	(173)	(173)
Profit / (loss) after tax		4,502	(250)	4,252		6,447	196	6,643
Attributable to:
Equity holders of the parent		4,543	(250)	4,293		6,504	196	6,700
Minority interest		(41)	-	(41)		(57)	-	(57)
Profit / (loss) for the period		4,502	(250)	4,252		6,447	196	6,643
Earnings per ordinary share
Basic		8.1 p	(0.4) p	7.7 p		11.7 p	0.4 p	12.1 p
Diluted		8.0 p	(0.4) p	7.6 p		11.5 p	0.3 p	11.8 p
Dividend per ordinary share
Arising in respect of the year				1.9 p				1.6 p
Paid in the year				1.6 p				1.2 p

Consolidated statement of recognised income and expense 

year ended 31 March

					2008  £000	2007  £000
Foreign exchange translation differences					2,493	(643)
Net gain on hedge of net investment in foreign subsidiary					-	22
Actuarial gains on defined benefit schemes					10,339	7,651
Taxation on items taken directly to equity					(3,300)	(2,296)
Income and expense recognised directly in equity					9,532	4,734
Profit for the period					4,252	6,643
Total recognised income and expense for the period					13,784	11,377
Attributable to:
Equity holders of the parent					13,825	11,434
Minority interest					(41)	(57)
Total recognised income and expense for the period					13,784	11,377

Consolidated balance sheet 

as at 31 March

		2008 £000		2007 £000
Assets
Intangible assets		28,934		25,365
Property, plant and equipment		25,429		24,585
Investments		265		52
Deferred tax assets		2,273		5,092
Retirement benefit asset		857		-
Other receivables		-		150
Total non current assets		57,758		55,244
Inventories		9,661		8,227
Trade and other receivables		16,632		18,243
Cash and cash deposits		7,785		2,875
Assets classified as held for sale		1,271		842
Total current assets		35,349		30,187
Total assets		93,107		85,431
Liabilities
Interest bearing loans and borrowings		14,684		4,877
Deferred tax liabilities		3,785		3,642
Retirement benefit obligations		-		12,061
Other payables		1,000		-
Total non current liabilities		19,469		20,580
Trade and other payables		14,078		13,691
Current tax liabilities		1,919		1,694
Dividends payable		339		222
Interest bearing loans and borrowings		6,847		10,803
Total current liabilities		23,183		26,410
Total liabilities		42,652		46,990
Net assets		50,455		38,441
Equity
Ordinary share capital issued		2,859		2,815
Share premium		3,916		3,002
Other reserves		3,669		3,670
Translation reserve		3,351		858
Retained earnings		36,660		26,900
Total equity attributable to equity holders of the parent		50,455		37,245
Minority interest		-		1,196
Total equity		50,455		38,441

Consolidated statement of cash flows

year ended 31 March

		2008 £000		2007 £000
Cash flows from operating activities
Profit before financing costs and taxation		4,376		7,387
Adjustments for:
Pension fund contributions in excess of service costs		(1,432)		(1,990)
Depreciation charge		3,152		2,977
Amortisation of intangible assets		112		103
Exceptional bad debt provision		93		-
Profit on disposal of property		-		(3,722)
Profit on disposal of other plant and equipment		(4)		(94)
Write down of assets charged to rationalisation costs		150		-
Cash flows on closures less than charge in the income statement		-		127
Share based payment charge		128		196
Operating profit before changes in working capital		6,575		4,984
Changes in working capital (excluding the effects of acquisition and disposal of subsidiaries)
Increase in inventories		(436)		(744)
Decrease / (Increase) in trade and other receivables		827		(1,859)
(Decrease) / increase in trade and other payables		(24)		552
Cash generated from operations		6,942		2,933
Interest paid		(1,344)		(1,728)
Tax paid		(131)		(154)
Net cash from operating activities		5,467		1,051
Cash flows from investing activities
Proceeds from sale of property, plant and equipment		47		7,314
Interest received		264		370
Disposal of subsidiaries, net of cash disposed of and related costs		(100)		1,261
Receipt of deferred consideration, net of related costs		937		403
Proceeds from sale of investments		2		2
Acquisition of business undertaking		(1,406)		-
Acquisition of minority interest		(148)		-
Acquisition of property, plant and equipment		(3,571)		(2,283)
Acquisition of intangible assets - computer software		(89)		(42)
Acquisition of trade investment		(215)		(43)
Development expenditure		(1,244)		(1,180)
Repayment of loan by jointly controlled entities		-		390
Net cash from investing activities		(5,523)		6,192
Cash flows from financing activities
Proceeds from the issue of share capital		6		260
Drawings on term loan facilities		18,216		-
Repayment of borrowings		(17,288)		(12,395)
Payment of finance lease liabilities		(1)		(8)
Dividends paid		(890)		(661)
Net cash from financing activities		43		(12,804)
Net decrease in cash and cash equivalents		(13)		(5,561)
Cash and cash equivalents at beginning of period		991		6,734
Effect of exchange rate fluctuations on cash held		161		(182)
Cash and cash equivalents at end of period		1,139		991
Cash and cash equivalents comprise:
Cash and cash deposits		7,785		2,875
Bank overdrafts		(6,646)		(1,884)
		1,139		991

Notes 

Segment reporting

At 31 March 2008, the group is organised into two main business segments: Technical Plastics and Precision Products.  

The primary segment reporting format is determined to be business segments as the group's risks and returns are affected predominantly by differences in the products and services provided. Secondary information is reported geographically. The operating business segments are organised and managed separately.

The Technical Plastics segment supplies fine tolerance, injection moulded plastic components, which are used in medical, telecom and electronics products. This business operates internationally in a fast growing and dynamic market underpinned by rapid technological development.

The Precision Products segment supplies systems to the automotive and aerospace industries.

Discontinued operations relate to the disposal of the group's automotive control cables business on 12 May 2006.

Transfer pricing between business segments is set on an arm's length basis. Segmental revenues and results include transfers between business segments. Those transfers are eliminated on consolidation.

The group's geographical segments are based on the location of the group's assets. Sales to external customers disclosed in geographical segments are based on the geographical location of its customers.

Analysis by business segment

The segment results for the year ended 31 March 2008 were as follows:

	Technical Plastics  £000	Precision Products  £000	Unallocated £000	Eliminations  £000	Continuing total  £000	Discontinued  £000	Group total  £000
Income statement
Total revenue	59,460	22,255	67	(508)	81,274	-	81,274
Less inter-segment revenue	(508)	-	-	508	-	-	-
Total external revenue	58,952	22,255	67	-	81,274	-	81,274
Expenses	(55,237)	(18,907)	(1,417)	-	(75,561)	-	(75,561)
Underlying operating profit	3,715	3,348	(1,350)	-	5,713	-	5,713
Rationalisation costs	(1,078)	(6)	(160)	-	(1,244)	-	(1,244)
Exceptional bad debts	(45)	-	(48)	-	(93)		(93)
Operating profit before financing costs	2,592	3,342	(1,558)	-	4,376	-	4,376
Net finance costs					126	-	126
Tax					-	-	-
Profit after tax					4,502	-	4,502
Balance sheet
Investments	-	-	265	-	265	-	265
Property, plant and equipment	19,022	5,415	992	-	25,429	-	25,429
Intangible assets	16,469	985	11,480	-	28,934	-	28,934
Retirement benefit asset	-	-	857	-	857	-	857
Other segment assets	17,523	7,813	3,230	-	28,566	-	28,566
Assets classified as held for sale	-	-	1,271	-	1,271	-	1,271
Cash and cash deposits	2,457	1,663	3,665	-	7,785	-	7,785
Total assets	55,471	15,876	21,760	-	93,107	-	93,107
Trade and other payables	8,482	4,264	2,332	-	15,078	-	15,078
Dividends payable	-	-	339	-	339	-	339
Tax liabilities	(1,796)	800	6,700	-	5,704	-	5,704
Interest bearing loans and borrowings	5,376	1,869	14,286	-	21,531	-	21,531
Total liabilities	12,062	6,933	23,657	-	42,652	-	42,652
Net assets	43,409	8,943	(1,897)	-	50,455	-	50,455
Other segmental information
Capital expenditure on property, plant and equipment	2,244	576	681	-	3,501	-	3,501
Capital expenditure on computer software	14	43	32	-	89	-	89
Depreciation	2,533	503	116	-	3,152	-	3,152
Amortisation of computer software	12	20	24	-	56	-	56

Analysis by business segment

The segment results for the year ended 31 March 2007 were as follows:

	Technical Plastics  £000	Precision Products  £000	Unallocated £000	Eliminations  £000	Continuing total  £000	Discontinued  £000	Group total  £000
Income statement
Total revenue	58,664	19,595	-	(229)	78,030	1,025	79,055
Less inter-segment revenue	(201)	(28)	-	229	-	-	-
Total external revenue	58,463	19,567	-	-	78,030	1,025	79,055
Expenses	(54,922)	(17,300)	(1,011)	-	(73,233)	(1,003)	(74,236)
Underlying operating profit	3,541	2,267	(1,011)	-	4,797	22	4,819
Rationalisation costs	(153)	(239)	(201)	-	(593)	-	(593)
Operating profit	3,388	2,028	(1,212)	-	4,204	22	4,226
Site closure costs	(561)	-	-	-	(561)	-	(561)
Profit on sale of properties	-	-	3,722	-	3,722	-	3,722
Profit before financing costs	2,827	2,028	2,510	-	7,365	22	7,387
Net finance costs					(205)	7	(198)
Tax					(713)	(2)	(715)
Profit after tax					6,447	27	6,474
Balance sheet
Investments	-	-	52	-	52	-	52
Property, plant and equipment	18,526	5,396	663	-	24,585	-		24,585
Intangible assets	15,061	21	10,283	-	25,365	-		25,365
Other segment assets	18,228	5,975	7,557	(48)	31,712	-		31,712
Assets classified as held for sale	-	-	842	-	842	-		842
Cash and cash deposits	2,425	22	428	-	2,875	-		2,875
Total assets	54,240	11,414	19,825	(48)	85,431	-	85,431
Trade and other payables	8,974	3,141	1,624	(48)	13,691	-		13,691
Dividends payable	-	-	222	-	222	-		222
Tax liabilities	(1,496)	21	6,811	-	5,336	-		5,336
Interest bearing loans and borrowings	2,242	639	12,799	-	15,680	-		15,680
Retirement benefit obligations	-	-	12,061	-	12,061	-		12,061
Total liabilities	9,720	3,801	33,517	(48)	46,990	-		46,990
Net assets	44,520	7,613	(13,692)	-	38,441	-		38,441
Other segmental information
Capital expenditure on property, plant and equipment	1,766	460	119	-	2,345	-		2,345
Capital expenditure on computer software	27	10	5	-	42	-		42
Depreciation	2,390	462	92	-	2,944	33		2,977
Amortisation of computer software	62	11	30	-	103	-		103

Analysis by geographical segment by destination 

The analysis of revenue by geographical destination for the year ended 31 March 2008 was as follows:

			United Kingdom  £000	North America  £000	Rest of world  £000	Group total  £000
Total external revenue			33,540	17,891	29,843	81,274
Less revenue attributable to discontinued operations			-	-	-	-
Revenue from continuing operations			33,540	17,891	29,843	81,274

The analysis of revenue by geographical destination for the year ended 31 March 2007 was as follows:

			United Kingdom  £000	North America  £000	Rest of world  £000	Group total  £000
Total external revenue			34,000	17,990	27,065	79,055
Less revenue attributable to discontinued operations			(477)	(96)	(452)	(1,025)
Revenue from continuing operations			33,523	17,894	26,613	78,030

Analysis by geographical segment by origin

The business operates in three main geographical regions - the United Kingdom, North America and in lower cost regions such as the Czech Republic and China.

The analysis of results by geographical origin for the year ended 31 March 2008 was as follows:

		United Kingdom  £000	North America  £000	Rest of world  £000	Group total  £000
Revenue
Total external revenue		57,806	13,814	9,654	81,274
Less revenue attributable to discontinued operations		-	-	-	-
Revenue from continuing operations		57,806	13,814	9,654	81,274
Other segment information
Segment assets		26,964	11,457	13,931	52,352
Unallocated assets		(1,897)	-	-	(1,897)
Net assets		25,067	11,457	13,931	50,455
Capital expenditure on property, plant and equipment		2,484	836	181	3,501
Capital expenditure on computer software		75	14	-	89
Depreciation		2,130	545	477	3,152
Amortisation of computer software		44	12	-	56

The analysis of results by geographical origin for the year ended 31 March 2007 was as follows:

	United Kingdom  £000	North America  £000	Rest of world  £000	Group total  £000
Revenue
Total external revenue	58,719	14,667	5,669	79,055
Less revenue attributable to discontinued operations	(1,025)	-	-	(1,025)
Revenue from continuing operations	57,694	14,667	5,669	78,030
Other segment information
Segment assets	29,371	11,109	11,653	52,133
Unallocated assets	(13,692)	-	-	(13,692)
Net assets	15,679	11,109	11,653	38,441
Capital expenditure on property, plant and equipment	1,567	497	281	2,345
Capital expenditure on computer software	14	28	-	42
Depreciation	2,158	491	328	2,977
Amortisation of computer software	41	62	-	103

Notes

1.     The financial statements set out above do not constitute the company's statutory accounts for the years ended 31 March 2008 and 31 March 2007, but are derived from those accounts. Statutory accounts for the year ended 31 March 2007 have been delivered to the Registrar of Companies and those for the year ended 31 March 2008 will be delivered following the company's annual general meeting. 

2.     The auditors have reported on those accounts; their report was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under S 237 (2) or S 237 (3) of the Companies Act 1985.

 

END

 

 

FR SSAFIUSASEIM