Interim Results

BULGIN PLC 23 September 1999 Bulgin PLC Interim Results Bulgin PLC ('Bulgin') announces Interim Results for the six months ended 31 July 1999. Key Points: * Pretax profits of £405,000 (6 months ended 31 July 1998:£320,000) * Turnover of £7.572m (£9.06m) * Interim Dividend maintained at 0.25p Chairman's Statement Review of Operations The Group experienced improving trading conditions in the first half compared with the second half of last year. Group profit before tax and exceptional items was £406,000 compared with £384,000 in the corresponding period last year and £152,000 for the year ended 31 January 1999. Exceptional costs were £154,000 relating mainly to the preparation of enfranchisement proposals which were narrowly rejected by the shareholders at the EGM on 2 July 1999. Offsetting these costs were exceptional income items totalling £153,000 which relate to the disposal of the business in Cirkit Distribution Ltd and the sale of the freehold property in Broxbourne. Net margins on continuing operations before exceptional items were 6.5% compared with 7.3% for the corresponding period last year (see comments on Bulgin Components sales mix below). Cash decreased by £251,000 as a result of continued capital expenditure and high levels of debtors following strong trading in June and July. Net gearing fell from 43% to 42% in the first half. Bulgin Components earned a profit before tax of £652,000 having increased monthly output consistently in the first half. New management and technical personnel have made an impact and we are now very focused on improving the overall skill level and efficiency in the company through ongoing training and quality programmes. Changes in sales mix caused a slight reduction in average selling price per component during the period. New product introductions and ongoing sales programmes are designed to increase average selling price and we expect to return to an upward trend in the second half. The 900 series Buccaneer connector was successfully launched at a major press event held in London on 10 September 1999. This significant new range of connectors addresses a gap in the market for power applications in hostile environments. The pace of new product introductions will increase in the second half and we anticipate that associated approval and marketing costs will be recovered in generally good trading. Bulgin Power Source incurred a loss before tax of £62,000. This resulted from delayed commencement and ramp-up of CATV installations for a major cable customer. Installations are now proceeding at full speed and it is expected that the shortfall will be recovered. Strong new product introductions for remote sensing, telemetry and other important applications are imminent. BP Purchasing (Electronics) returned to a modest profit before tax of £15,000 in the first half. Marketing initiatives to open up new territories and customers are paying off. BPP turned in a record month for orders and shipments in August. Now relocated in a new leased facility in Hertford, the company is positioned to underpin its recovery and operate as a useful contributor to the Bulgin financial picture. Of particular note is the company's very successful venture in operating an internet based forum for customers which is producing increasing enquiry levels and new business. Bulgin PLC incurred a loss before tax of £196,000 (£179,000 before exceptional items). The Board has reviewed the role of the PLC in the light of the enfranchisement decision, corporate governance obligations, the level of complexity in the business and the company's AIM listing. It has deemed it appropriate that the costs of the parent should be realigned and that process is well under way. Cirkit Distribution incurred a loss before tax of £4,000 (£20,000 before exceptional items). As shareholders will probably know, the sale of the business in Cirkit Distribution Ltd to Deltron Electronics PLC took place earlier this year. Part of the consideration consisted of 930,233 Deltron shares, the remainder being in cash. Recently the Deltron share price has fallen and after a recent revival now stands at 73p compared with 95p at the time of the disposal. The movement in the Deltron share price is not a realised loss and does not, in the opinion of the Board, constitute a permanent diminution in value. The reduction in value at the half year is reflected in the statement of total recognised gains and losses. The Board's policy is to retain the shares for the foreseeable future. Dividends Having considered all aspects of the current and immediate future trading climate the Board has decided to maintain the interim dividend at 0.25p per share. This will be payable on 1 December 1999 to shareholders on the register at 5 November 1999. Outlook The Group is approaching completion of almost 18 months work to reorganise its operations and relieve production constraints. There are encouraging signs in the market and exciting new products and services coming on stream to fuel our confidence in the future. In the immediate period to the end of the current financial year we anticipate a continuing improvement in the relevant business climate. The Group's order book continues at approximately three month's sales. Some of our largest distributors are formulating their buying plans for the next six months and their decisions will strongly influence the second half. A.S. Winter Chairman 23 September 1999 For further information please contact: Alastair Winter Hamish McFall Chairman, Bulgin PLC Tavistock Communications Brian Emerson Tel: 0171 600 2288 Chief Executive, Bulgin PLC Tel: 0181 594 5588 Copies of this statement will be sent to all shareholders on 29 September 1999 and will be available from the Company's registered office at Bypass Road, Berking, Essex IG11 0AZ for at least 14 days thereafter. Group Profit and Loss Account Unaudited Interim Results to 31 July 1999 Half year to Half year to Year to 31 July 1999 31 July 1998 31 January (as restated) 1999 (as restated) £'000 £'000 £'000 Turnover - continuing operations 6,533 6,438 12,058 - discontinued operations 1,039 2,622 4,740 ------- ------- ------- 7,572 9,060 16,798 ===== ===== ===== Operating profit - continuing operations 345 501 203 - discontinued operations (10) (86) (244) ------- ------- ------- 335 415 (41) Discontinued operations Profit on sale of Operations 20 - - Profit on disposal of freehold property 133 - - ------- ------- ------- Profit/(loss) on ordinary activities before interest 488 415 (41) Net interest payable (83) (95) (230) ------- ------- ------- Profit/(loss) on ordinary activities before Taxation 405 320 (271) Tax on profit on ordinary activities (129) (111) 64 ------- ------- ------- Profit/(loss) on ordinary activities after Taxation 276 209 (207) Dividends (73) (76) (368) ------- ------- ------- Retained profit/(loss) for the period 203 133 (575) ===== ===== ===== Earnings per share - Basic 0.94p 0.72p (0.71p) ===== ===== ===== Earnings per share - Diluted 0.94p 0.72p (0.71p) ===== ===== ===== Dividends per share 0.25p 0.25p 1.00p ===== ===== ===== Notes: 1.Operating profit on continuing operations is after accounting for exceptional costs of £154,000 (year ended 31 January 1999 - £423,000, six months ended 31 July 1998 - £64,000). 2.The financial information in this statement does not constitute statutory accounts. The financial information in respect of the year ended 31 January 1999 has been extracted from the statutory accounts which have been filed with the Registrar of Companies. The auditors' report on those accounts was unqualified and did not contain any statement under Section 237 of the Companies Act 1985. 3.The interim financial information has been prepared on the basis of the accounting policies set out in the Group's statutory accounts for the year ended 31 January 1999. Fixed annual charges are apportioned to the interim period on the basis of time elapsed. Other expenses are accrued in accordance with the same principles used in the preparation of the annual accounts. 4.The Board has declared an interim dividend of 0.25p per share (1998: 0.25p per share) payable on 1 December 1999 to shareholders on the register at 5 November 1999. Group Statement of Total Recognised Gains and Losses Unaudited Interim Results to 31 July 1999 Half year to Half year to Year to 31 July 1999 31 July 1998 31 January (as restated) 1999 (as restated) £'000 £'000 £'000 Profit/(loss) for the financial period 276 209 (207) Unrealised loss on fixed asset investments (198) - - ------- ------- ------- Total recognised gains and losses for the financial period 78 209 (207) ===== ===== ===== Note of Historical Cost Profits and Losses Half year to Half year to Year to 31 July 1999 31 July 1998 31 January (as restated) 1999 (as restated) £'000 £'000 £'000 Reported profit/(loss) on ordinary 405 320 (271) activities before taxation Realisation of property revaluation gains of previous 120 - - years Difference between a Historical cost depreciation charge and the actual depreciation charge of the period calculated on the 6 6 12 revalued amount ------- ------- ------- Historical cost profit/ (loss) on ordinary activities before taxation 531 326 (259) ===== ===== ===== Historical cost profit/(loss) for the period after taxation and dividends 329 139 (563) ===== ===== ===== Group Balance Sheet Unaudited Interim Results at 31 July 1999 31 July 1999 31 July 1998 31 January 1999 £'000 £'000 £'000 Fixed assets Intangible assets 99 49 70 Tangible assets 3,490 3,958 4,111 Investments 684 - - ------- ------- ------- 4,273 4,007 4,181 ===== ===== ===== Current assets Stocks 1,459 2,998 2,189 Debtors 3,288 3,560 2,712 Cash at bank and in hand 651 819 771 ------- ------- ------- 5,398 7,377 5,672 Creditors: Amounts falling due within one year (3,603) (4,395) (3,748) ------- ------- ------- Net current assets 1,795 2,982 1,924 ------- ------- ------- Total assets less current liabilities 6,068 6,989 6,105 Creditors: Amounts falling due after more than one year (1,744) (2,006) (1,827) Provision for liabilities and charges (92) (63) (60) ------- ------- ------- Net assets 4,232 4,920 4,218 ===== ===== ===== Capital and reserves Called up share capital 1,460 1,449 1,454 Share premium 834 830 831 Revaluation reserve (70) 261 254 Profit and loss account 2,008 2,380 1,679 ------- -------- ------- Shareholders' funds - equity 4,232 4,920 4,218 ===== ===== ===== Group Cash Flow Statement Unaudited Interim Results at 31 July 1999 31 July 1999 31 July 1998 31 January 1999 £'000 £'000 £'000 Cash flow from operating activities 7 407 1,478 Returns on investments and servicing of finance (117) (89) (194) Taxation (14) (73) (261) Capital expenditure and financial investment (264) (203) (487) Acquisitions and disposals 375 - - Equity dividends paid - (290) (362) ------- ------- ------- Net cash (outflow)/inflow before financing (13) (248) 174 Financing (238) (27) (254) ------- ------- ------- Decrease in cash (251) (275) (80) ===== ===== ===== Reconciliation of operating profit/(loss) to net cash inflow from operating activities 31 July 1999 31 July 1998 31 January 1999 £'000 £'000 £'000 Operating profit/(loss) 335 415 (41) Depreciation charges 281 299 616 Amortisation of development costs 8 4 18 Provision for exceptional Administration costs 56 - 7 Loss/(profit) on disposal of tangible fixed assets 3 (7) (51) (Increase)/decrease in stocks (109) (214) 595 (Increase)/decrease in debtors (976) (104) 816 Increase/(decrease) in Creditors 409 14 (482) ------- ------- ------- Cash flow from operating Activities 7 407 1,478 ===== ===== ===== Included in cash flow from operating activities is £98,000 net outflow in respect of exceptional items. Summary of Results Group profits before taxation for the first half of the financial year were £405,000 (1998: £320,000) details of which are as follows: 31 July 1999 31 July 1998 31 January 1999 Turnover Profit/ Turnover Profit/ Turnover Profit/ (loss) (loss) (loss) before before before taxation taxation taxation £'000 £'000 £'000 £'000 £'000 £'000 Bulgin PLC - (196) - (142) - (320) Bulgin Components PLC 5,198 652 4,971 667 9,185 613 Cirkit Distribution (100) Ltd 1,039 (4) 2,622 4,740 (280) BP Purchasing (Electronics) Ltd 332 15 314 8 540 (17) Bulgin Power Source PLC 1,003 (62) 1,153 (113) 2,333 (267) ------- ------- ------- ------- ------- ------- 7,572 405 9,060 320 16,798 (271) ===== ===== ===== ===== ===== ===== Independent Review Report to Bulgin PLC Introduction We have been instructed by the company to review the financial information set out on pages 2 to 5 and we have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by the Directors. It is also their responsibility to ensure that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4 issued by the Auditing Practices Board. A review consists principally of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data and based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly, we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 31 July, 1999. Bright Grahame Murray Chartered Accountants 124/130 Seymour Place London W1H 6AA 23 September 1999

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