Interim Results

Elektron PLC 19 September 2001 Embargoed for release: 07.30hrs, Wednesday, 19th September 2001 Elektron PLC Interim results for the six months ended 31 July 2001 Elektron PLC ('Elektron'), the AIM quoted components and power electronics company, formerly called Bulgin PLC, announces interim results for the six months ended 31 July 2001. Key Points: * Turnover increased 6% to £8.74 million (six months to 31 July 2000: £ 8.27 million) * Operating profit on ordinary activities before exceptional items and amortisation of goodwill £39,000 (six months to 31 July 2000: £529,000) * Loss per share 0.97p (six months to 31 July 2000: earnings per share: 0.72p). * Board's policy to maintain dividend cover of 3 times, accordingly no interim dividend in the current year * Excellent performance continues at Milmega * Acquisition of Powertron, a power electronics business, announced in August 2001 Alastair Winter, Chairman, commented 'Power electronics has developed well and the acquisition of Powertron adds an important new line of business which we will exploit to its full potential. The outlook is positive with only the communications sector showing weakness. 'Poor conditions prevail in the components market place and there is no evidence of an imminent upturn. This market is inherently cyclical and as we have historically had a small share of the world market and we will continue our strategy to expand capacity and reduce unit costs in anticipation of an eventual upturn. Overall, given the staple nature of its products, the Division is well placed to exploit any upturn. 'The Group will continue to pursue suitable acquisitions to accelerate growth. ' For further information please contact: Brian Emerson Hamish McFall Chief Executive Ana Nogales Elektron PLC Tavistock Communications Tel: 01245 494 542 Tel: 020 7600 2288 Chairman's Statement Change of Name At the AGM held on 15th August shareholders approved a resolution to change the name of the Company from Bulgin PLC to Elektron PLC. This change recognises the broadening business profile of the Group. Results The Group's results for the 6 months to 31st July 2001 were principally affected by the persisting reduction in turnover at the Components Division due to a worldwide slowdown in manufacturing activity within the customer base. Also in this first half, the Power Electronics Division experienced slower than expected turnover growth for power management products due to changes in customer production schedules whilst demand for power amplifier products remained firm. Turnover increased by 6% to £8.74m including a full 6 months turnover from Milmega, which was acquired in June 2000, and 5 months turnover from AFI, which was acquired in February of this year. Operating profit was £0.04m (half year to 31 July 2000: £0.53m) before exceptional charges of £0.34m (half year to 31 July 2000: £nil) and goodwill amortisation of £0.1 million (half year to 31 July 2000: £0.01m). Exceptional charges consisted of £0.15m for restructuring and £0.19m acquisition costs written off. Cash decreased by £0.92m (half year to 31 July 2000: £2.31m) due to expansion of working capital and continued capital expenditure. Components Division Turnover decreased by 23% to £5.21m. The division has experienced a severe reduction in demand from component distributors although business conducted directly with manufacturers, as part of a strategic initiative, increased slightly. In April of this year action was taken to reduce the cost base through a redundancy programme which will yield savings of £0.3m in a full year. An exceptional charge of £0.15m was taken to put the programme into effect. At 31st July 2001 the order book stood at £1.5m (as at 31 July 2000: £2.0m). Power Electronics Division Turnover increased by 133% to £3.53m. These figures include £2.17m of turnover from Milmega and AFI (half year to 31 July 2000: £0.27m). Milmega has continued its excellent performance whilst AFI, our 61% owned USA high frequency electronics venture, has made slower than expected progress due to customer ordering delays. However in the further period to the date of this report orders received at AFI have accelerated. Turnover at Bulgin Power Source increased by 9% to £1.36m but this consisted mainly of lower margin products. At 31st July 2001 the order book stood at £3.8m (as at 31 July 2000: £4.0m). Acquisitions On 16th August the Company expanded its power electronics interests with the acquisition of Powertron Ltd for an initial consideration of £0.95m. Further consideration of £0.2m and the assumption of £0.2m of bank indebtedness will be payable on settlement of the net assets delivered at completion. Powertron designs and manufactures power management products primarily for the rail industry, a sector where we have been looking to increase our involvement. In its last financial year to 31st May 2001 Powertron generated a pre-tax profit of £0.21m on turnover of £2.4m. Progress on another intended acquisition has slowed down due to the difficult economic climate in the relevant market. Related costs of £0.19m have been written off to recognise the risk of the transaction not completing in the foreseeable future. Earnings per Share and Dividends Loss per share was 0.97p compared with earnings per share of 0.72p in the corresponding period last year. It is the Board's policy to maintain dividend cover of 3 times and accordingly no interim dividend will be paid in the current year. Outlook Poor conditions prevail in the components market place and there is no evidence of an imminent upturn. Components accounted for 60% of the Group's turnover in the first half down from 82% in the first half last year. This market is inherently cyclical and as we have historically had a small share of the world market we will continue our strategy to expand capacity and reduce unit costs in anticipation of an eventual upturn. Overall, given the staple nature of its products, the Division is well placed to exploit any upturn. Power electronics has developed well and the acquisition of Powertron adds an important new line of business which we will exploit to its full potential. The outlook is positive with only the communications sector showing weakness. The Group will continue to pursue suitable acquisitions to accelerate growth. A. S. Winter Chairman 18 September 2001 Group Profit and Loss Account Unaudited Interim Results to 31 July 2001 Half year Half year Year to to to 31 July 31 July 31 January 2001 2000 2001 £'000 £'000 £'000 Turnover - continuing operations 8,704 8,270 17,536 - acquisitions 33 0 0 ------ ------ ------ 8,737 8,270 17,536 ------ ------ ------ Operating (loss)/profit - before exceptional items and goodwill amortisation 39 529 1,155 Exceptional items (338) 0 0 Goodwill amortisation (98) (13) (100) Operating (loss)/profit - continuing operations (350) 516 1,055 Operating (loss)/profit - acquisitions (47) 0 0 ------ ------ ------ (Loss)/profit on ordinary activities before interest (397) 516 1,055 Net interest payable (105) (68) (150) ------ ------ ------ (Loss)/profit on ordinary activities before taxation (502) 448 905 Tax on loss/profit on ordinary activities 45 (124) (295) ------ ------ ------ (Loss)/profit on ordinary activities after taxation (457) 324 610 Minority Interests 19 0 0 ------ ------ ------ (Loss)/profit for the financial period (438) 324 610 Dividends 0 (113) (226) ------ ------ ------ Retained (loss)/profit for the period (438) 211 384 ====== ====== ====== (Loss)/earnings per share - Basic (0.97p) 0.72p 1.35p ====== ====== ====== (Loss)/earnings per share - Diluted (0.97p) 0.72p 1.35p ====== ====== ====== Dividends per share - 0.25p 0.50p ====== ====== ====== Group Statement of Total Recognised Gains and Losses Unaudited Interim results to 31 July 2001 Half year Half year to Year to to 31 July 31 July 31 January 2001 2000 2001 £'000 £'000 £'000 (Loss)/profit for the financial period (438) 324 610 Unrealised surplus on revaluation of properties - - 787 ------ ------ ------ Total recognised gains and losses for the financial period (438) 324 1,397 ====== ====== ====== Note of Historical Cost Profits and Losses Half Half Year to year year to to 31 31 31 July July January 2001 2000 2001 £'000 £'000 £'000 Reported (loss)/profit on ordinary activities before taxation (502) 448 905 Difference between a historical cost depreciation charge and the actual depreciation charge for the period calculated on the revalued amount 7 3 6 ------ ------ ------ Historical cost (loss)/profit on ordinary activities before taxation (495) 451 911 Taxation on loss/profit on ordinary activities 45 (124) (295) Dividends - (113) (226) Minority interests 19 - - ------ ------ ------ Historical cost (loss)/profit for the period after taxation, minority interests and dividends (431) 214 390 ====== ====== ====== Group Balance Sheet Unaudited Interim Results at 31 July 2001 31 July 31 July 31 January 2001 2000 2001 £'000 £'000 £'000 Fixed assets Intangible assets 902 1,060 950 Tangible assets 5,373 3,968 5,134 ------ ------ ------ 6,275 5,028 6,084 ====== ====== ====== Current assets Stocks 2,212 1,938 2,237 Debtors 3,348 3,823 3,553 Cash at bank and in hand 1,031 902 941 ------ ------ ------ 6,591 6,663 6,731 Creditors: Amounts falling due within one year (5,890) (5,265) (5,325) ------ ------ ------ Net current assets 701 1,398 1,406 ------ ------ ------ Total assets less current liabilities 6,976 6,426 7,490 Creditors Amounts falling due after more than one year (1,534) (1,521) (1,589) Provision for liabilities and charges (174) (176) (207) ------ ------ ------ Net assets 5,268 4,729 5,694 ====== ====== ====== Capital and reserves Called up share capital 2,263 2,260 2,263 Share premium 36 34 36 Revaluation reserve 899 122 906 Profit and loss account 2,057 2,313 2,489 ------ ------ ------ Shareholders'funds equity 5,255 4,729 5,694 Minority interests 13 - - ------ ------ ------ 5,268 4,729 5,694 ====== ====== ====== Group Cash Flow Statement Unaudited Interim Results to 31 July 2001 31 July 31 July 31 January 2001 2000 2001 £'000 £'000 £'000 Cash flow from operating activities (321) (69) 1,160 Returns on investments and servicing of finance (99) (80) (155) Taxation (39) - (106) Capital expenditure and financial investment (376) (386) (717) Acquisitions and disposals (49) (1,466) (1,303) Equity dividends paid - (113) (226) ------ ------ ------ Net cash outflow before financing (884) (2,114) (1,347) Financing (35) (192) (232) ------ ------ ------ Decrease in cash (919) (2,306) (1,579) ------ ------ ------ Reconciliation of operating (loss)/profit to net cash flow from operating activities 31 July 31 July 31 January 2001 2000 2001 £'000 £'000 £'000 Operating (loss)/profit (397) 516 1,055 Amortisation of goodwill 98 13 100 Depreciation charges 333 292 616 Amortisation of development costs 100 33 116 Provision for exceptional administration costs 71 (39) - Loss/(profit) on disposal of tangible fixed assets 11 (22) (27) Decrease/(increase) in stocks 36 (254) (588) Decrease/(increase) in debtors 218 (1,127) (1,001) (Decrease)/increase in creditors (791) 519 889 ------ ------ ------ Cash flow from operating activities (321) (69) 1,160 ------ ------ ------ Included in cash flow from operating activities is £267,000 (year ended 31 January 2001: £40,000, six months ended 31 July 2000: £39,000) net outflow in respect of exceptional items. Notes 1. The financial information in this statement does not constitute statutory accounts. The financial information in respect of the year ended 31 January 2001 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. 2. 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 2001. 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. 3. Copies of this announcement will be sent to shareholders and will be available for inspection at the Company's registered office at Hurst House, 131/133 New London Road, Chelmsford, Essex, CM2 OQN.

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