Interim Results
Acal PLC
04 December 2006
FOR RELEASE 7:00AM 4 DECEMBER 2006
ACAL plc
(Leading pan-European, value-added technology based distributor
providing specialist design-in, sales and marketing services)
Unaudited Interim Results for the six months to 30 September 2006
2006 2005** Change
(restated)
Turnover - ongoing activities*** £122.9m £119.8m +3%
EBIT* - ongoing activities £4.6m £4.1m +12%
Profit before tax
- ongoing activities £4.2m £3.4m +24%
- including disposed activities £8.8m £3.9m
Basic earnings per share
- ongoing activities 10.2p 7.9p +29%
- including disposed activities 28.4p 9.2p
Dividends per share - relating to period 7.2p 7.2p -
(*EBIT - Earnings before interest, tax, the Group's share of profit of
associated companies and exceptional items stated after full allocation of
central costs)
(** The restatement of the prior year's figures arises from the reclassification
of the Air Conditioning and Refrigeration ("AC&R")activities as discontinued, in
the light of their sale, and the reallocation of central costs and the inclusion
of the small medical instrumentation business under IT Solutions following that
reclassification.)
(***Disposed activities represent the sold AC&R business and ongoing activities
represent the remaining business of the Group.)
• Overall sales of ongoing activities up 3% at £122.9m
• EBIT of ongoing activities up 12% at £4.6m and profit before tax
of ongoing activities up 24% at £4.2m
• Electronic Components : continuing progress in expanding product
portfolio and its geographic coverage
• Parts Services : short-term weakness in demand as a result of
"technology refresh" programmes; minority in CPI bought out; longer term
opportunity to attract more customers to outsourced model
• IT Solutions : some stability in margins; initial benefits from
new product introductions
• Interim dividend unchanged at 7.2p
For further information:-
Tony Laughton - Chief Executive 01483 544500
Jim Virdee - Finance Director 01483 544500
Brian Coleman-Smith/Nia Thomas
Cubitt Consulting 020 7367 5100
Notes to Editors:
1 The Acal Group is a leading European, value-added technology based distributor
providing specialist design-in, sales and marketing, as well as stock planning
and procurement services with three divisions: Electronic Components, Parts
Services and IT Solutions. Its value-added philosophy and geographic coverage
enables Acal to provide specialist knowledge and support to customers on a
pan-European basis.
2 Design-in is the process by which Acal's sales engineers work with customers
and suppliers to procure components which meet the specific technical and
performance needs of the customers.
3 Acal has operating companies in the UK, Netherlands, Belgium, Germany, France,
Italy, Spain, and Scandinavia. Westech Electronics, an associated company, is
based in Singapore and covers the Far East region.
CHAIRMAN'S STATEMENT
As indicated in our pre-close Trading Update in September, Acal's profit before
tax from ongoing activities for the half year ending 30 September 2006 shows an
improvement over the corresponding period in the prior year. The disposed
activities represent the Air Conditioning and Refrigeration business, the sale
of which was announced in May and completed in July 2006.
Based on the ongoing activities, overall sales have grown by 3% to £122.9m
(2005: £119.8m) and profit before tax by 24% to £4.2m (2005: £3.4m). The Group
made an annualised return on capital employed of 36% (2005: 22%).
Results
The performance of Acal's divisions in each of the half years ended 30 September
2006 and 2005 is set out below:
2006/7 2005/6
(restated)**
Sales EBIT* Sales EBIT*
as % of as % of as % of as % of
£m Group £m Sales £m Group £m Sales
Electronic
Components 51.9 42% 1.7 3.3% 48.4 40% 1.0 2.1%
Parts Services 25.0 20% 1.5 6.0% 27.2 23% 2.3 8.5%
IT Solutions 46.0 38% 1.4 3.0% 44.2 37% 0.8 1.8%
122.9 100% 4.6 3.7% 119.8 100% 4.1 3.4%
* EBIT = Earnings before interest, tax, the Group's share of profit of
associates and exceptional items, stated after full allocation of central costs.
** The restatement of the prior year's figures arises from the reclassification
of the Air Conditioning and Refrigeration activities as discontinued, in the
light of their sale, and the reallocation of central costs and the inclusion of
the small medical instrumentation business under IT Solutions following that
reclassification.
Electronic Components
The growth in sales and profits reflects the initial benefits of our success in
expanding our product portfolio of advanced technology products, particularly in
the area of semiconductors. This has been achieved with considerable support
from our suppliers and has enabled us to expand our existing semiconductor teams
and to begin establishing dedicated teams in both Germany and Italy. A
significant contribution to the improvement in performance of this division came
from some of our Continental European business units where the expansion of the
product portfolio started earlier.
Parts Services
Following record growth last year, both sales and profits have fallen in the
first half as a consequence of weaker demand for parts resulting from a number
of 'technology-refresh' programmes. Although the second quarter saw some new
contracts, these have not been sufficient to offset the shortfall.
There continue to be significant further opportunities for the contracted
procurement, supply and management of service parts with a growing trend towards
outsourcing of these activities by maintenance and service organisations.
As previously announced, in accordance with the arrangements agreed at the time
of its acquisition in May 2003, Acal bought the 28.4% minority interest in CPI
in October 2006 for a consideration of approximately £6.7m. Following this
acquisition the customer-facing activities of this division are being
reorganised so as to present a unified range of services to customers.
IT Solutions
Although there was a small increase in sales over the prior year, profitability
increased markedly. The improvement was seen in storage networking and most
particularly in networking & security. As previously reported, there are signs
that margins are stabilising in this area. This continues to be the case for the
majority of products but trading conditions remain competitive and there are
still some products which remain under severe price and margin pressure. The
division has also seen some early benefits from the expansion of its product
range.
Dividend
The Board has declared an interim dividend of 7.2p per share, unchanged from the
prior year. This is to be paid on 25 January 2007 to shareholders on the
register on 15 December 2006.
Outlook
In Electronic Components, execution of the strategy to expand our range of
technology products and their geographical coverage continues to provide
considerable optimism for the future. The timing of new contracts in Parts
Services is always difficult to predict but the longer term opportunities are
clear. The improved performance of our IT Solutions business is expected to be
maintained.
Richard Moon
4 December 2006
unaudited consolidated income statement
for the six months ended 30 September 2006
six months ended 30 Sept 2006
Continuing operations Ongoing Disposed Total six year
activities activities months ended
(note 2) ended 31 Mar
30 Sept 2006
2005
£m £m £m £m £m
Revenue 122.9 - 122.9 119.8 257.0
Operating profit 4.6 (1.8) 2.8 4.1 9.7
Analysed between:
Operating profit before
exceptional items 4.6 - 4.6 4.1 9.9
Exceptional items - provision
for retained obligations
(note 2) - (1.8) (1.8) - -
Exceptional items - profit
on disposal of investments - - - - 0.6
Exceptional items - product
withdrawal costs - - - - (0.8)
Share of post-tax profits
from associates (note 3) 0.3 - 0.3 0.2 0.4
Finance costs (1.0) - (1.0) (1.2) (2.3)
Finance income 0.3 - 0.3 0.3 0.6
Profit before taxation 4.2 (1.8) 2.4 3.4 8.4
Analysed between:
Profit before taxation before
exceptional items 4.2 - 4.2 3.4 8.6
Exceptional items - provision
for retained obligations
(note 2) - (1.8) (1.8) - -
Exceptional items - profit
on disposal of investments - - - - 0.6
Exceptional items - product
withdrawal costs - - - - (0.8)
Taxation (note 3) (1.3) 0.5 (0.8) (1.0) (2.7)
Analysed between:
Taxation before exceptional
items (1.3) (1.3)
Exceptional items - taxation
credit arising consequent on
the disposal (note 3) 0.5 0.5
Profit after taxation for the
period from continuing
operations 2.9 (1.3) 1.6 2.4 5.7
Discontinued operations
Profit for the period from
discontinued operations
(note 2) - 6.1 6.1 0.3 0.9
Profit for the period 2.9 4.8 7.7 2.7 6.6
Attributable to:
Equity holders of the parent 7.5 2.4 6.0
Minority interests 0.2 0.3 0.6
7.7 2.7 6.6
Earnings per share (note 4)
Continuing operations
Basic 10.2p (4.8p) 5.4p 7.9p 19.1p
Diluted 10.2p (4.8p) 5.4p 7.9p 19.1p
Including discontinued operations
Basic 28.4p 9.2p 22.3p
Diluted 28.4p 9.2p 22.3p
Dividends
Dividends per share declared in
respect of period 7.2p 7.2p 21.6p
Dividends per share paid in
period 14.4p 14.4p 21.6p
Dividends paid in period £3.8m £3.8m £5.7m
unaudited statement of recognised income and expense
for the six months ended 30 September 2006
+----------------------------------+-----------+----------+----------+
| | six months|six months|year ended|
| | ended| ended| 31 Mar|
| | 30 Sept| 30 Sept| 2006|
| | 2006| 2005| |
| | £m| £m| £m|
+----------------------------------+-----------+----------+----------+
|Actuarial loss on defined benefit | - | - | (3.4)|
|pension scheme | | | |
|Deferred tax relating to pension | (0.1)| (0.1)| 0.8 |
|scheme | | | |
|Decrease in fair value of | -| (0.7)| (0.4)|
|investments | | | |
|Foreign currency translation | (0.6)| 0.2| 0.7|
|differences | | | |
+----------------------------------+-----------+----------+----------+
|Income and expense recognised | (0.7)| (0.6)| (2.3)|
|directly in equity | | | |
|Profit for the period | 7.7| 2.7| 6.6|
+----------------------------------+-----------+----------+----------+
|Total recognised income and | 7.0| 2.1| 4.3|
|expense for the period | | | |
|Restatement for the effects of IAS| -| -| 0.4|
|32 and 39 | | | |
+----------------------------------+-----------+----------+----------+
|Total recognised income and | 7.0| 2.1| 4.7|
|expense for the period | | | |
+----------------------------------+-----------+----------+----------+
| | | | |
|Attributable to: | | | |
|Equity holders of the parent | 6.8| 1.8| 4.1|
|Minority interests | 0.2| 0.3| 0.6|
+----------------------------------+-----------+----------+----------+
| | 7.0| 2.1| 4.7|
+----------------------------------+-----------+----------+----------+
unaudited consolidated balance sheet
at 30 September 2006
at 30 Sept at 30 Sept at 31 Mar
2006 2005 2006
£m £m £m
Non-current assets
Property, plant and equipment 6.6 7.0 6.7
Goodwill 48.7 48.8 48.8
Intangible assets - software 4.5 5.2 4.8
Investments in associates 4.7 4.2 4.7
Other financial assets 0.3 1.8 0.3
Deferred tax assets 4.1 2.2 4.0
68.9 69.2 69.3
Current assets
Inventories 23.2 25.2 21.4
Trade and other receivables 49.4 55.9 58.0
Current tax assets 0.7 1.8 1.7
Cash and cash equivalents 10.6 12.6 16.9
83.9 95.5 98.0
Current liabilities
Trade and other payables (48.1) (50.3) (58.0)
Short-term borrowings (7.1) (10.6) (11.2)
Current tax liabilities (2.3) (3.4) (3.7)
Provisions (1.8) - (1.0)
(59.3) (64.3) (73.9)
Net current assets 24.6 31.2 24.1
Assets of discontinued - - 6.2
operations classified as held
for sale
Non-current liabilities
Long-term borrowings (6.2) (20.2) (12.2)
Pension liability (8.9) (6.2) (9.1)
Deferred tax liabilities (1.9) (1.8) (1.8)
Provisions (1.6) (1.0) (0.7)
(18.6) (29.2) (23.8)
Liabilities of discontinued - - (4.1)
operations classified as held
for sale
Net assets 74.9 71.2 71.7
Equity
Share capital 1.3 1.3 1.3
Share premium account 38.0 38.0 38.0
Share scheme reserve 0.3 0.1 0.2
Other reserves 1.2 1.6 1.8
Retained earnings 32.2 28.7 28.6
Equity attributable to equity
holders of the parent 73.0 69.7 69.9
Minority interests 1.9 1.5 1.8
Total equity 74.9 71.2 71.7
unaudited reconciliation of movements in shareholders' equity
for the six months ended 30 September 2006
+----------------------------+-----------+--+----------+--+-----------+
| | six months| |six months| | year ended|
| | ended 30| | ended 30| | |
| | Sept 2006| | Sept 2005| |31 Mar 2006|
| | £m| | £m| | £m|
+----------------------------+-----------+--+----------+--+-----------+
|Shareholders' equity at | 69.9| | 71.3| | 71.3|
|start of period | | | | | |
|Opening balance sheet | -| | 0.4| | 0.4|
|adjustment: IAS 39 | | | | | |
|Total recognised income and | | | | | |
|expense for the period | 6.8| | 1.8| | 3.7|
|Share-based payments | 0.1| | -| | 0.1|
|Dividends | (3.8)| | (3.8)| | (5.7)|
|Movements in associates | -| | -| | 0.1|
|reserves | | | | | |
+----------------------------+-----------+--+----------+--+-----------+
|Shareholders' equity at end | 73.0| | 69.7| | 69.9|
|of period | | | | | |
+----------------------------+-----------+--+----------+--+-----------+
unaudited consolidated cash flow statement
for the six months ended 30 September 2006
+----------------------------+-----------+-+-----------+-+-----------+
| | six months| | six months| | year ended|
| | ended 30| | ended 30| | |
| | Sept 2006| | Sept 2005| |31 Mar 2006|
| | £m| | £m| | £m|
+----------------------------+-----------+-+-----------+-+-----------+
|Profit for the year | | | | | |
|Ongoing activities | 2.9| | 2.4| | 5.7|
|Disposed activities | 4.8| | 0.3| | 0.9|
+----------------------------+-----------+-+-----------+-+-----------+
| | 7.7| | 2.7| | 6.6|
|Taxation expense | 1.0| | 1.2| | 3.1|
|Share of results from | (0.3)| | (0.2)| | (0.4)|
|associates | | | | | |
|Net finance costs | 0.7| | 1.0| | 1.7|
|Depreciation of property, | 1.0| | 1.1| | 2.1|
|plant and equipment | | | | | |
|Amortisation of intangible | 0.5| | 0.5| | 1.1|
|assets - software | | | | | |
|Change in provisions | 1.8| | 0.2| | 0.7|
|Gain on disposal of business| (5.9)| | -| | -|
|Gain on disposal of | -| | -| | (0.6)|
|investments | | | | | |
|Gain on disposal of | | | | | |
|property, plant and | | | | | |
|equipment | (0.1)| | (0.1)| | (0.1)|
|Pension scheme funding | (0.4)| | (0.3)| | (0.7)|
|Equity-settled share-based | 0.1| | -| | 0.1|
|payment expense | | | | | |
+----------------------------+-----------+-+-----------+-+-----------+
|Operating cash flows before | 6.1| | 6.1| | 13.6|
|changes in working capital | | | | | |
|(Increase)/decrease in | (3.7)| | (5.6)| | 2.3|
|working capital | | | | | |
+----------------------------+-----------+-+-----------+-+-----------+
|Cash flow from operations | 2.4| | 0.5| | 15.9|
|Interest paid | (0.9)| | (1.3)| | (2.1)|
|Income taxes paid | (1.5)| | (0.5)| | (2.9)|
+----------------------------+-----------+-+-----------+-+-----------+
|Net cash flow from operating| 0.0| | (1.3)| | 10.9|
|activities | | | | | |
+----------------------------+-----------+-+-----------+-+-----------+
|Cash flows from investing | | | | | |
|activities | | | | | |
|Acquisition of subsidiaries | -| | -| | (0.4)|
|Proceeds from sale of | -| | -| | 2.5|
|associate | | | | | |
|Proceeds from sale of | 8.3| | | | -|
|subsidiaries | | | | | |
|Net overdrafts disposed of | 0.2| | | | |
|with subsidiaries | | | | | |
|Purchases of property, plant| (1.1)| | (1.2)| | (2.2)|
|and equipment | | | | | |
|Proceeds from sale of | 0.2| | 0.2| | 0.3|
|property, plant and | | | | | |
|equipment | | | | | |
|Purchases of intangible | (0.2)| | (0.2)| | (0.3)|
|assets - software | | | | | |
|Interest received | 0.2| | 0.3| | 0.6|
|Dividends received from | 0.2| | 0.1| | 0.1|
|associates | | | | | |
+----------------------------+-----------+-+-----------+-+-----------+
|Net cash flow from investing| 7.8| | (0.8)| | 0.6|
|activities | | | | | |
+----------------------------+-----------+-+-----------+-+-----------+
|Cash flows from financing | | | | | |
|activities | | | | | |
|Repayments of borrowings | (11.0)| | (0.1)| | (3.1)|
|Dividends paid to company's | (3.8)| | (3.8)| | (5.7)|
|shareholders | | | | | |
|Dividends paid to minority | (0.1)| | -| | -|
|interests | | | | | |
+----------------------------+-----------+-+-----------+-+-----------+
|Net cash flow from financing| (14.9)| | (3.9)| | (8.8)|
|activities | | | | | |
+----------------------------+-----------+-+-----------+-+-----------+
|Net (decrease)/increase in | | | | | |
|cash and cash equivalents | (7.1)| | (6.0)| | 2.7|
|Cash and cash equivalents at| | | | | |
|beginning of period | 10.8| | 8.0| | 8.0|
|Effect of exchange rate | -| | 0.1| | 0.1|
|fluctuations | | | | | |
+----------------------------+-----------+-+-----------+-+-----------+
|Cash and cash equivalents at| 3.7| | 2.1| | 10.8|
|end of period | | | | | |
+----------------------------+-----------+-+-----------+-+-----------+
notes to the interim report
for the six months ended 30 September 2006
1. Basis of accounting and preparation
This interim results announcement is prepared in accordance with the IFRS
accounting policies expected to apply at 31 March 2007 and which were applied at
31 March 2006.
As permitted, this interim report has been prepared in accordance with UK
listing rules and not in accordance with IAS 34 'Interim Financial Reporting'.
Comparative figures at September 2005 have been restated to reflect the
following changes in accounting treatment:
• Where operations have subsequently been classified as discontinued, the
income statement has been restated to present the income statements of
those operations within discontinued operations (see note 2);
• Deferred tax and reserves have been restated to reflect the deferred tax
liability that would follow from the distribution of profits by the
company's associates.
The financial information for the year ended 31 March 2006 is extracted from the
statutory accounts of the Group for that year. Those published accounts were
reported on by the auditors without qualification or statement under sections
237 (2) or (3) of the Companies Act 1985 and have been delivered to the
Registrar of Companies.
The interim accounts for the six months ended 30 September 2006 and the
comparatives to 30 September 2005 do not constitute statutory accounts as
defined in S240 of the Companies Act 1985 and are unaudited.
2. Disposed activities
On 25 May 2006, the Company announced the disposal of its air conditioning and
refrigeration business. The disposal was completed on 3 July 2006 for a cash
consideration of £8.3 million.
The effect of the disposal during the period is as follows:
+-----------------------------------------+-----------------------+
| | £m|
+-----------------------------------------+-----------------------+
|Sale proceeds | 8.3|
|Total net assets sold | (2.3)|
+-----------------------------------------+-----------------------+
| | 6.0|
|Tax effect of disposal | (0.1)|
+-----------------------------------------+-----------------------+
|Profit on disposal | 5.9|
+-----------------------------------------+-----------------------+
In addition a provision of £1.8m has been made to cover certain obligations of
the disposed activities which have been retained by the Group. These obligations
represent costs relating to people, properties and IT systems.
Profit from discontinued operations comprises:
+-----------------------------+-----------+-----------+-----------+
| | six months| six months| year ended|
| | ended 30| ended 30| |
| | Sept 2006| Sept 2005|31 Mar 2006|
| | £m| £m| £m|
+-----------------------------+-----------+-----------+-----------+
|Profit on disposal of | 5.9| - | -|
|discontinued operations | | | |
|Profit for the period from | 0.2| 0.3| 0.9|
|trading of discontinued | | | |
|operations | | | |
+-----------------------------+-----------+-----------+-----------+
|Profit for the period from | 6.1| 0.3| 0.9|
|discontinued operations | | | |
+-----------------------------+-----------+-----------+-----------+
3. Taxation
The £1.3 million tax charge for ongoing activities for the six months ended 30
September 2006 (30 September 2005: £1.0 million, 31 March 2006: £2.7 million)
comprises a charge of £1.2 million in respect of UK taxation (30 September 2005:
£1.3 million, 31 March 2006: £2.6 million) and a charge of £0.1 million in
respect of overseas taxation (30 September 2005: credit £0.3 million, 31 March
2006: charge £0.1 million). A deferred tax asset of £0.5m has been recognised in
respect of the provision for retained obligations of the disposed activities
referred to in note 2 above.
In addition, the group's share of post-tax profits from associates includes a
tax charge for the six months ended 30 September 2006 of £0.1 million (30
September 2005: £0.1 million, 31 March 2006: £0.3 million).
4. Earnings per share
The weighted average number of Ordinary Shares in issue during the period was
26.4 million (2005: 26.4 million). The weighted average number of Ordinary
Shares on a diluted basis was 26.4 million (2005: 26.4 million) after an
adjustment for dilutive share options of nil (2005: nil million). Basic earnings
per share have been calculated on profit attributable to Shareholders of £7.5
million (2005: £2.4 million). Earnings per share on discontinued operations of
23.0p (2005: 1.3p) have been calculated on the discontinued profit attributable
to shareholders of Acal plc of £6.1m (2005: £0.3m) and are based on the same
weighted average number of ordinary shares as for basic earnings per share.
5. Post balance sheet events
- Dividends
An interim dividend of 7.2 pence per share (2005: 7.2 pence) amounting to a
dividend of £1.9 million (2005: £1.9 million) has been declared by the
Directors. These interim accounts do not reflect this dividend payable.
- Acquisition of minority interest
On 13 October 2006, the Company acquired the remaining 28.4% minority interest
in Computer Parts International Limited for a consideration of £6.7 million.
6. Unaudited reconciliation of net cash flow to movements in net borrowings
for the six months ended 30 September 2006
+---------------------------+------------+------------+---------+
| | six months| six months| year|
| | ended 30| ended 30| ended|
| | Sept 2006| Sept 2005| 31 Mar|
| | | | 2006|
| | £m| £m| £m|
+---------------------------+------------+------------+---------+
|Net (decrease)/increase in | (7.1)| (6.0)| 2.7|
|cash and cash equivalents | | | |
|Cash outflow from decrease | 11.0| 0.1| 3.0|
|in debt and lease financing| | | |
|Translation differences | (0.1)| -| 0.1|
+---------------------------+------------+------------+---------+
|Decrease/(increase) in net | 3.8| (5.9)| 5.8|
|borrowings | | | |
|Net borrowings at beginning| (6.5)| (12.3)| (12.3)|
|of the period | | | |
+---------------------------+------------+------------+---------+
|Net borrowings at end of | (2.7)| (18.2)| (6.5)|
|the period | | | |
+---------------------------+------------+------------+---------+
7. The Company's interim report is being sent to shareholders by post. Copies
will also be available at www.acalplc.co.uk or from:-
Acal plc, 2 Chancellor Court, Occam Road, Surrey Research Park, Guildford,
Surrey, GU2 7AH.
The interim results will not be advertised in any newspaper
Ends
This information is provided by RNS
The company news service from the London Stock Exchange
Latest directors dealings
- 11 minutes ago Carclo
- 39 minutes ago Howden Joinery Group
- 45 minutes ago Lok'n Store Group
- 1 hour ago Auto Trader Group
- 2 hours ago Value and Indexed Property Income Trust