Interim Results
Acal PLC
05 December 2005
FOR RELEASE 7:00AM 5 DECEMBER 2005
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 2005
(reported under International Financial Reporting Standards - IFRS)
2005 2004 Change
Turnover £129.1m £124.4m +4%
-------------------------- --------- -------- --------
EBIT* £4.7m £6.1m -23%
-------------------------- --------- -------- --------
Profit before tax £3.9m £5.4m -28%
-------------------------- --------- -------- --------
Earnings per share 9.2p 13.0p -29%
-------------------------- --------- -------- --------
Interim Dividend per share 7.2p 7.2p -
-------------------------- --------- -------- --------
• Overall sales up 4%, with IT Parts Services up 11%
• As previously announced, first half profitability adversely affected by
poor trading conditions in Continental European Electronic Components and IT
Products
• Unchanged interim dividend of 7.2p
• Promising recent order growth in Electronic Components
• Significant expansion opportunities in Electronic Components and IT Parts
Services
(*EBIT - Earnings before interest, tax and the Group's share of profit of
associated companies)
For further information:-
Tony Laughton - Chief Executive 01483 544500
Jim Virdee - Finance Director 01483 544500
Brian Coleman-Smith/Nia Thomas 020 7053 6400
Beattie Financial
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 in the fields of Electronic
Components, IT Products, IT Parts Services and Industrial Controls. 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, Scandinavia and the USA. Westech Electronics, an
associated company, is based in Singapore and covers the Far East region.
CHAIRMAN'S STATEMENT
As reported in our pre-close trading update, Acal plc's performance in the first
half of this year has been disappointing reflecting the continuing tough trading
conditions. This has been particularly so in Electronic Components in
Continental Europe and in IT Products.
Despite this, overall sales have grown by 4% to £129.1m (2004: £124.4m) with
particularly strong growth in the IT Parts Services division. Return on sales
fell to 3.6% from 4.9%, reflecting a 23% reduction in EBIT. The Group made an
annualised 24% (2004: 28%) return on capital employed (calculated under IFRS)
during the half year.
RESULTS
Below is a table showing the results of each of Acal's divisions for the half
year ended 30 September 2005.
2005/06 2004/05
----------------------------------------------------------- -------------------------------
Sales EBIT* Sales EBIT
------------------- ------------------------------------ ------ ----------------------
£m % change £m % change % of sales £m £m % of sales
Electronic 48.4 - 1.0 -50% 2.1% 48.6 2.0 4.1%
Components
Industrial 10.8 +8% 0.8 - 7.4% 10.0 0.8 8.0%
Controls
----- ------ ---- ------ ----- ----- ----- ------
Components 59.2 +1% 1.8 -36% 3.0% 58.6 2.8 4.8%
TOTAL
----- ------ ---- ------ ----- ----- ----- ------
IT 42.7 +4% 0.6 -50% 1.4% 41.2 1.2 2.9%
Products
IT Parts
Services 27.2 +11% 2.3 +10% 8.5% 24.6 2.1 8.5%
----- ------ ---- ------ ----- ----- ----- ------
IT TOTAL 69.9 +6% 2.9 -12% 4.1% 65.8 3.3 5.0%
----- ------ ---- ------ ----- ----- ----- ------
129.1 +4% 4.7 -23% 3.6% 124.4 6.1 4.9%
===== ====== ==== ====== ===== ===== ===== ======
(*EBIT - Earnings before interest, tax and the Group's share of profits of
associated companies)
Although sales of the Electronics Components Division were flat, there have been
some positive signs with 15% year-on-year order growth in the last quarter.
Gross margins have held up well in a competitive environment and the sales mix
has moved more towards niche semiconductors, reflecting our strategy. This has
been achieved by the continuing process of introducing new suppliers as well as
extending geographic coverage for existing suppliers.
The Industrial Controls division continues to perform well, particularly the Air
Conditioning and Refrigeration activity, with an 8% growth in total sales.
Although the IT Products Division has shown a small growth in sales, as
previously reported, profitability has been further impacted by price and margin
pressures, particularly in the Storage Area Networking market.
IT Parts Services has seen excellent growth of 11% in sales and 10% in profits.
A major new contract started successfully at the beginning of this half year.
DIVIDEND
The Board has declared an interim dividend of 7.2p net per share, the same as
2004. This is to be paid on 25 January 2006 to shareholders on the register on
16 December 2005.
OUTLOOK
With the re-organisation of the Electronic Components and IT Products divisions
we are now consolidating our logistics, warehousing, back office and support
functions to improve efficiency and effectiveness. Although we do not expect
market conditions to improve materially in the short term, the order growth seen
in the last quarter in Electronic Components as well as the extension of the
overall product portfolio in both these divisions will help performance in the
second half.
IT Parts Services has benefited from growth in outsourcing of planning,
procurement and supply of spare parts and services. We expect this trend to
continue.
Richard Moon
5 December 2005
unaudited consolidated income statement
for the six months ended 30 September 2005
six months six months
ended ended year ended
30 Sept 2005 30 Sept 2004 31 Mar 2005
Continuing operations £m £m £m
Revenue 129.1 124.4 260.7
---------------------- ---------- --------- --------
Operating profit 4.7 6.1 12.6
Share of post-tax profits
from associates (note 2) 0.2 0.2 0.4
Finance costs (1.3) (1.2) (2.5)
Finance income 0.3 0.3 0.6
---------------------- ---------- --------- --------
Profit before taxation 3.9 5.4 11.1
Taxation (note 2) (1.2) (1.7) (3.7)
---------------------- ---------- --------- --------
Profit after taxation for
the period 2.7 3.7 7.4
---------------------- ---------- --------- --------
Attributable to:
Equity holders of the
parent 2.4 3.5 7.0
Minority interests 0.3 0.2 0.4
---------------------- ---------- --------- --------
2.7 3.7 7.4
---------------------- ---------- --------- --------
Earnings per share (note 3)
Basic 9.2p 13.0p 26.6p
Diluted 9.2p 13.0p 26.6p
---------------------- ---------- --------- --------
Dividends
Dividends per share
declared in respect of
period 7.2p 7.2p 21.6p
Dividends per share paid in
period 14.4p 14.0p 21.2p
Dividends paid in period £3.8m £3.7m £5.6m
---------------------- ---------- --------- --------
unaudited statement of recognised income and expense
for the six months ended 30 September 2005
six months six months
ended ended
30 Sept 2005 30 Sept 2004 year ended
£m £m 31 Mar 2005
£m
---------------------- ---------- --------- --------
Decrease in fair value of
investments (0.7) - -
Foreign currency translation
differences 0.2 0.4 0.3
Deferred tax relating to
pension scheme (0.1) (0.1) (0.2)
---------------------- ---------- --------- --------
Income and expense recognised
directly in equity (0.6) 0.3 0.1
Profit for the period 2.7 3.7 7.4
---------------------- ---------- --------- --------
Total recognised income and
expense for the period 2.1 4.0 7.5
---------------------- ---------- --------- --------
Attributable to:
Equity holders of the parent 1.8 3.8 7.1
Minority interests 0.3 0.2 0.4
---------------------- ---------- --------- --------
2.1 4.0 7.5
---------------------- ---------- --------- --------
unaudited consolidated balance sheet
at 30 September 2005
at 30 Sept 2005 at 30 Sept 2004 at 31 Mar 2005
£m £m £m
Restated *
Non-current assets
Property, plant and equipment 7.0 7.5 6.6
Goodwill 48.8 48.9 48.7
Intangible assets - software 5.2 6.3 5.9
Investments in associates 4.2 4.2 3.9
Other financial assets 1.8 2.2 2.2
Deferred tax assets 2.2 2.3 2.1
-------------------- --------- --------- ----------
69.2 71.4 69.4
-------------------- --------- --------- ----------
Current assets
Inventories 25.2 26.3 25.5
Trade and other receivables 55.9 52.4 55.5
Current tax assets 1.8 2.1 1.0
Cash and cash equivalents 12.6 10.9 15.9
-------------------- --------- --------- ----------
95.5 91.7 97.9
-------------------- --------- --------- ----------
Current liabilities
Trade and other payables (50.3) (49.1) (55.8)
Short-term borrowings (10.6) (11.0) (8.0)
Current tax payable (3.4) (3.5) (2.0)
-------------------- --------- --------- ----------
(64.3) (63.6) (65.8)
-------------------- --------- --------- ----------
Net current assets 31.2 28.1 32.1
-------------------- --------- --------- ----------
Non-current liabilities
Long-term borrowings (20.2) (20.3) (20.2)
Pension liability (6.2) (6.6) (6.4)
Deferred tax liabilities (1.5) (0.7) (1.2)
Provisions (1.0) (0.7) (0.9)
-------------------- --------- --------- ----------
(28.9) (28.3) (28.7)
-------------------- --------- --------- ----------
Net assets 71.5 71.2 72.8
-------------------- --------- --------- ----------
Equity
Share capital 1.3 1.3 1.3
Share premium account 38.0 38.0 38.0
Share capital to be issued 0.1 0.1 0.1
Other reserves 1.6 1.5 1.4
Retained earnings 29.0 29.3 30.8
-------------------- --------- --------- ----------
Equity attributable to
equity holders of the parent 70.0 70.2 71.6
Minority interests 1.5 1.0 1.2
-------------------- --------- --------- ----------
Total equity 71.5 71.2 72.8
-------------------- --------- --------- ----------
* see note 1
unaudited reconciliation of movements in shareholders' equity
for the six months ended 30 September 2005
six months six months
ended ended
30 Sept 2005 30 Sept 2004 year ended
£m £m 31 Mar 2005
£m
-------------------- --------- --------- ---------
Shareholders' equity at
start of period 71.6 69.9 69.9
Opening balance sheet
adjustment: IAS 39 0.4 - -
Total recognised income and
expense for the period 1.8 3.8 7.1
Dividends (3.8) (3.7) (5.6)
Share capital issued - 0.2 0.2
-------------------- --------- --------- ---------
Shareholders' equity at end
of period 70.0 70.2 71.6
-------------------- --------- --------- ---------
unaudited consolidated cash flow statement
for the six months ended 30 September 2005
six months six months
ended ended
30 Sept 2005 30 Sept 2004 year ended
£m £m 31 Mar 2005
£m
-------------------- --------- --------- ---------
Cash flows from operating activities
Operating profit 4.7 6.1 12.6
Depreciation of property,
plant and equipment 1.1 1.0 2.3
Amortisation of intangible
assets - software 0.5 0.5 0.9
Change in provisions 0.2 (0.2) (0.2)
Gain on disposal of
property, plant and equipment (0.1) - (0.4)
Pension scheme funding (0.3) (0.3) (0.7)
Equity-settled share-based
payment expense - - 0.1
-------------------- --------- --------- ---------
Operating cash flows before
changes in working capital 6.1 7.1 14.6
(Increase)/decrease in
working capital (5.6) (3.5) 2.3
-------------------- --------- --------- ---------
Cash flow from operations 0.5 3.6 16.9
Interest paid (1.3) (1.2) (2.5)
Income taxes paid (0.5) (2.0) (3.9)
-------------------- --------- --------- ---------
Net cash flow from operating
activities (1.3) 0.4 10.5
-------------------- --------- --------- ---------
Cash flows from investing activities
Acquisition of subsidiary - (1.3) (2.3)
Proceeds from sale of associate - - 0.4
Purchases of property,
plant and equipment (1.2) (0.7) (1.5)
Proceeds from sale of
property, plant and equipment 0.2 0.1 1.0
Purchases of intangible
assets (0.2) (0.6) (0.7)
Interest received 0.3 0.3 0.6
Dividends received 0.1 0.1 0.3
-------------------- --------- --------- ---------
Net cash flow from investing
activities (0.8) (2.1) (2.2)
-------------------- --------- --------- ---------
Cash flows from financing activities
Proceeds from issue of
ordinary shares - 0.2 0.2
Repayments of borrowings (0.1) (0.1) (0.1)
Dividends paid to company's
shareholders (3.8) (3.7) (5.6)
Dividends paid to minority
interests - - (0.1)
-------------------- --------- --------- ---------
Net cash flow from financing
activities (3.9) (3.6) (5.6)
-------------------- --------- --------- ---------
Net (decrease)/inc rease in cash
and cash equivalents (6.0) (5.3) 2.7
Cash and cash equivalents at
beginning of period 8.1 5.3 5.3
Effect of exchange rate
fluctuations - 0.1 0.1
-------------------- --------- --------- ---------
Cash and cash equivalents at
end of period 2.1 0.1 8.1
-------------------- --------- --------- ---------
notes to the interim report
for the six months ended 30 September 2005
1. Basis of preparation
Acal plc and its subsidiaries (the 'Group') have previously prepared
consolidated financial statements under UK Generally Accepted Accounting
Principles ('UK GAAP'). From 1 April 2005 the Group is required to prepare
consolidated financial statements in accordance with International Financial
Reporting Standards ('IFRS') and International Accounting Standards (IAS)
adopted by the European Union (EU).
This interim financial report is prepared in accordance with the IFRS accounting
policies expected to apply in the Group's first IFRS Annual Report and Accounts
for the year ending 31 March 2006. These policies are available at the company's
website at www.acalplc.co.uk.
As permitted, this interim report has been prepared in accordance with UK
listing rules and not in accordance with IAS 34 'Interim Financial Reporting'
and is, therefore, not fully compliant with IFRS. The Directors have anticipated
that the amendments to IAS 19 'Employee Benefits - Actuarial Gains and Losses,
Group Plans and Disclosures' which have yet to be formally adopted for use in
the EU, will be so adopted in time to be applicable to the next annual financial
statements.
As allowed by IFRS 1 'First Time Adoption of IFRS', the provisions of IAS 32
'Financial Instruments, Disclosure and Presentation' and IAS 39 'Financial
Instruments, Recognition and Measurement' have not been applied to the
comparative periods and are applied from 1 April 2005.
IFRS currently in issue and adopted by the EU are subject to interpretation
issued from the International Financial Reporting Interpretations Committee
('IFRIC') and are therefore subject to possible change. Further standards or
interpretations may also be issued that could be applicable to the full year
consolidated financial statements. Therefore, potential changes could result in
the need to change the basis of preparation or presentation of certain financial
information from that presented in this document.
The Group's transition date for the application of IFRS is 1 April 2004. The
comparative figures for 30 September 2004 and 31 March 2005 have been restated
to reflect the transition to IFRS and reconciliations of profit and equity from
UK GAAP to IFRS were presented in an announcement published on 28 September
2005, along with a reconciliation of equity at 1 April 2004. A copy of that
announcement can be found on the company's website at www.acalplc.co.uk.
The September 2004 comparatives have been restated from those shown in that
announcement to reflect the change in accounting policy relating to the deferral
of service contract revenue that was adopted in the March 2005 financial
statements. The restatement has the impact on the consolidated balance sheet of
grossing up Trade and other receivables by £3.5 million and Trade and other
payables by £4.5 million and therefore reducing retained earnings by £1.0
million. The impact on the consolidated income statement is immaterial.
The financial information for the year ended 31 March 2005 is extracted from the
statutory accounts of the Group for that year, now amended to conform to
applicable IFRS as discussed above. Those published accounts, in a form
consistent with UK GAAP, 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 2005 and the
comparatives to 30 September 2004 do not constitute statutory accounts as
defined in S240 of the Companies Act 1985 and are unaudited.
2. Taxation
The £1.2 million tax charge for the six months ended 30 September 2005 (30
September 2004: £1.7 million, 31 March 2005: £3.7 million) comprises a charge of
£1.3 million in respect of UK taxation (30 September 2004: £1.6 million, 31
March 2005: £3.4 million) and a credit of £0.1 million in respect of overseas
taxation (30 September 2004: charge £0.1 million, 31 March 2005: charge £0.3
million).
In addition, the group's share of post-tax profits from associates includes a
tax charge for the six months ended 30 September 2005 of £0.1 million (30
September 2004: £0.1 million, 31 March 2005: £0.1 million).
3. Earnings per share
The weighted average number of Ordinary Shares in issue during the period was
26.4 million (2004: 26.4 million). The weighted average number of Ordinary
Shares on a diluted basis was 26.4 million (2004: 26.5 million) after an
adjustment for dilutive share options of nil (2004: 0.1 million). Basic earnings
per share have been calculated on profit attributable to Shareholders of £2.4
million (2004: £3.5 million).
4. Post balance sheet events - Dividends
An interim dividend of 7.2 pence per share (2004: 7.2 pence) amounting to a
dividend of £1.9 million (2004: £1.9 million) has been declared by the
Directors. These interim accounts do not reflect this dividend payable.
5. unaudited reconciliation of net cash flow to movements in net borrowings
for the six months ended 30 September 2005
six months six months
ended ended year ended
30 Sept 2005 30 Sept 2004 31 Mar 2005
£m £m £m
------------------- ---------- ---------- --------
Net (decrease)/increase in
cash and cash equivalents (6.0) (5.3) 2.7
Cash outflow from decrease
in debt and lease financing 0.1 0.1 0.1
Translation differences - - 0.1
------------------- ---------- ---------- --------
(Increase)/decrease in net
borrowings (5.9) (5.2) 2.9
Net borrowings at beginning
of the period (12.3) (15.2) (15.2)
------------------- ---------- ---------- --------
Net borrowings at end of the
period (18.2) (20.4) (12.3)
------------------- ---------- ---------- --------
6. 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
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Friday, 22nd November 2024
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