Final Results
Eleco PLC
09 October 2007
For release 7.00am 02 October 2007
ELECO PLC (ELCO.L)
('Eleco' or 'the Group')
The Building Systems and Construction Software Group
PRELIMINARY RESULTS FOR THE YEAR ENDED 30 JUNE 2007
'Eleco's performance as measured by all key indicators is again most
encouraging. We have made a strong start to the current year'
Highlights
Turnover increased 12.5% to £62.1m from £55.2m driven by innovative building
components and software
Operating profit up 35.8% at £5.6m (2006: £4.1m) driven by higher margins in
Building Systems and reduced loss in Software
Profit after tax up 38.4% at £4.6m (2006: £3.3 m restated)
Operating cash flow was again strong and net funds in hand marginally up at
£4.8m (2006: £4.7m)
Earnings per share up 27.9% to 8.7p (2006: 6.8p restated).
Proposed full year dividends up 19% to 2.5p per share (2006: 2.1p).
Software now in profit before goodwill amortisation charges
Good start to the current year and in a strong financial position
John Ketteley, Executive Chairman of Eleco plc, commented:
'We finished the year with substantially higher orders and in a strong financial
position. We will continue our emphasis on strong cash generation in our
operations. Our products are increasingly well regarded in the market place and
we have a dedicated management team backed by an experienced workforce. We have
made a strong start to the year'.
'For these reasons, and despite the current turmoil in financial markets, I have
every confidence in the year ahead for Eleco'.
Enquiries to:
Eleco plc http://www.elecoplc.com Tel: 01920 443 830
John Ketteley, Executive Chairman john.ketteley@eleco.com
Eleco plc Tel: 01920 443 830
David Dannhauser, Finance Director david.dannhauser@eleco.com
Collins Stewart Europe Limited Tel: 020 8523 8350
(Nominated Adviser)
Nick Ellis / Philip P. Roe
Adventis Financial PR Tel: 020 7034 4758 / 59
Tarquin Edwards/Chris Steele
Chairman's Statement
I am pleased to present my statement for the year ended 30 June 2007, including
the review of our business activities and the outlook for the current year.
PERFORMANCE SUMMARY
Group turnover for the year was £62,078,000 (2006: £55,197,000), an increase of
12.5 per cent.
Group operating profit was 35.8 per cent. higher at £5,591,000 (2006: £4,116,000
restated). Group operating profit was arrived at after deducting goodwill
amortisation costs for the year of £596,000 (2006: £744,000) and included a
first year contribution of £497,000 from Asta Development, which was acquired in
December 2006.
Profit on ordinary activities before tax was £5,650,000 (2006: £4,436,000
restated), an increase of 27.3 per cent after net interest receivable of £59,000
(2006: £156,000 payable).
Group profit for the year after tax was £4,614,000 (2006: £3,333,000 restated)
equivalent to 8.7p per share (2006: 6.8p per share), an increase of 27.9 per
cent.
Operating cash flow was again strong and net funds in hand at 30 June 2007 were
marginally higher at £4,760,000 (2006: £4,682,000). It should be noted that the
cash cost of financing the acquisition of Asta Development during the year was
£2,587,000 net of the cash balances acquired with that company.
We continued to invest significantly in new products and enhanced software
development during the year and such expenditure increased to £1,963,000 (2006:
£1,281,000).
The Company's performance as measured by the above key performance indicators is
again most encouraging.
Dividends
The Board proposes an increased final dividend of 1.80p per share (2006: 1.50p
per share), which subject to approval by shareholders, will be paid on 23
November 2007 to shareholders on the Register on 19 October 2007.
The final dividend, together with the interim dividend of 0.70p already paid,
would result in total dividends for the year ended 30 June 2007 of 2.50p per
share (2006: 2.10p per share), an increase of 19.0 per cent.
REVIEW OF BUSINESS ACTIVITIES
BUILDING SYSTEMS
In the UK, our building systems operations are principally involved in the
design, off-site manufacture and supply of structural building components in
precast concrete, metal roofing and cladding and engineered timber products; and
also in the supply of timber engineering systems. In South Africa and Germany we
also supply timber engineering systems.
Turnover of our building systems operations increased by 6.7 per cent. to
£51,793,000 (2006: £48,544,000).
Building systems operating profit increased by 12.4 per cent to £6,087,000
(2006: £5,418,000 restated). Operating profit before goodwill was £6,119,000
(2006: £5,450,000 restated)
Precast
Bell & Webster Concrete again experienced strong demand for its FastBuild Rooms
for hotels and student accommodation projects in the second half of the year.
Demand for its retaining wall and other products also remained firm. As a
consequence, its operating profits were significantly higher than last year.
Evidence of Bell & Webster Concrete's growing reputation for its products and
service is that it has been short listed by the Concrete Society for its 2007
Annual Awards in the category 'New Structures'. It has also been nominated for
the Interbuild Off-site Construction Awards for 2007 in the category 'Best use
of Concrete' in connection with the highly regarded Docklands Student Village
for the University of East London.
Engineered Building Components
Profit contributions from the roofing and cladding operations SpeedDeck Building
Systems and Downer Cladding were lower in a difficult market. However,
management has taken steps to remedy this situation and will be launching new
products at the forthcoming Interbuild Exhibition in October. I am pleased to
report that Eleco Timber Frame made a welcome breakthrough to profit in the
second half and that orders for the ElecoFrame(R) patented timber frame system
continue to grow.
Timber Engineering Systems
Gang-Nail Systems was adversely affected by the atrocious wet weather conditions
experienced in the UK in the latter part of the year. The consequent disruption
to activity on building sites affected Gang-Nail Systems' customers' ability to
supply roof trusses and Ecojoist(R) to those sites. In the circumstances
Gang-Nail performed well although profits for the year were marginally lower
than the record profit achieved last year.
Eleco Bauprodukte performed well in the German market and sales and profits were
significantly higher than last year.
In South Africa, International Truss Systems yet again delivered another
outstanding performance, with profits again ahead of last year's record in
sterling terms despite a somewhat weaker Rand.
SOFTWARE
Turnover of our software operations increased by 54.7per cent to £10,285,000
(2006: £6,653,000), of which £2,432,000 was attributable to Asta Development,
acquired in December 2006.
The operating loss of our software operations fell to £496,000 (£1,302,000
restated) after goodwill charges of £564,000 (2006: £712,000). Fully expensed
development costs were £1,379,000 (2006: £858,000).
The operating profit before goodwill of our software interests was £68,000
(2006: loss £590,000 restated), including the contribution of £497,000 from Asta
Development.
Construction software
The construction software interests namely, Consultec Sweden and Consultec UK
and Asta Development performed well, the latter in line with our expectations at
the time of its acquisition in December 2006.
All our software operations have benefited from the adoption of Asta
Development's software management techniques and disciplines. In particular,
cross initiatives with Asta Development have contributed to improved performance
from the Consultec companies in Sweden and the UK and I look forward to further
progress in this quarter.
Visualisation Software
ArCon(R) and Esign sustained operating losses due to continuing high development
costs. However, substantial increases in sales of both products during the year
were most encouraging. Since the year end, we have completed the development of
ArCon 2007, following which we have entered into a new 3 year agreement with
Micro Application, the leading French software distributor, to continue its
distribution of ArCon 3D. We are actively negotiating agreements with
distributors in 10 other countries. We have also signed a distribution agreement
to target major UK retailers with own brand consumer software for home
improvement.
MANAGEMENT AND EMPLOYEES
I would like to take this opportunity to formally welcome Michael McCullen, who
joined the Board following the acquisition of Asta Development, of which he is
Managing Director.
I would also like to thank on your behalf the employees in the UK, Germany,
Sweden and South Africa all of whose hard work, dedication and skill have made
possible these significantly improved results.
OUR VALUE PROPOSITION
The building industry has been moving progressively towards the use of off-site
manufactured structural building components for some time.
The increasing use of design and engineering software in recent years has also
facilitated the selection of off-site manufactured building elements, enabling
them to be more accurately dimensioned, costed and manufactured for speedy
installation when delivered to site. Visualisation software enables builders and
their clients to view projects and building components in virtual form before
building begins and the build process itself is now normally managed by project
management software.
Our strategy is to satisfy the requirements of the construction industry in this
modern, progressive approach to the build process and to anticipate the
industry's future needs. Thus we design and manufacture innovative and
efficient building components in precast concrete, metal and timber; we develop
and utilise the latest design and engineering software in our manufacturing
processes; and we develop for use by our customers design and engineering
software, estimating software, visualisation software, plant management software
and project management software.
FINANCE
Following the recovery in the Company's fortunes over the last decade, we have
consistently applied measured financing policies as we have moved forward. The
recent turmoil in the financial markets would seem to justify this approach and
we continue to strive to maintain a strong financial position. In this
connection, I am pleased to inform you that we recently agreed with our bankers
a significant increase in our committed medium term banking facilities, which,
together with our net cash position and continuing strong operating cash flows,
will provide significant resources to support the expansion of the Group.
OUTLOOK
The outlook for the major part of our operations for the year ahead is firm,
although the effect of the current turmoil in the financial markets on those of
our operations that are directly involved in the UK housing market remains to be
seen. That said, the Prime Minister has made clear that one of his major
objectives is to bring about a step change in the construction of affordable
housing in this country and I am encouraged by the fact that this laudable and
ambitious target will be achieved only by the increased application of those
modern building systems and technologies on which Eleco's business is based.
We finished the year with substantially higher orders and in a strong financial
position. Our products are increasingly well regarded in the market place and we
have a dedicated management team backed by an experienced workforce. We have
also made a strong start to the current year and we will continue our emphasis
on strong cash generation in our operations. For all these reasons, and despite
the current turmoil in financial markets, I have every confidence in the year
ahead for Eleco.
John Ketteley
EXECUTIVE CHAIRMAN
2 October 2007
Eleco plc
Consolidated Profit and Loss Account (Unaudited)
For the year ended 30 June 2007
Notes 2007 2007 2006
(restated)
£'000 £'000 £'000
Turnover
Continuing operations 59,646 55,197
Acquisitions 2,432 -
Total Continuing operations 3 62,078 55,197
Operating profit
Continuing operations 5,308 4,116
Acquisitions 283 -
Total Continuing operations 3 5,591 4,116
Profit on sale of tangible assets - 476
Profit on ordinary activities before interest and taxation 5,591 4,592
Net interest receivable/(payable) 18 (114)
Other finance income/(charges) 41 (42)
Profit on ordinary activities before taxation 5,650 4,436
Taxation (1,036) (1,103)
Profit for the financial year 4,614 3,333
Basic earnings per ordinary 10p share 5 8.7p 6.8p
Diluted earnings per ordinary 10p share 5 8.7p 6.7p
Statement of Total Recognised Gains and Losses (Unaudited)
for the year ended 30 June 2007
Notes 2007 2006
(restated)
£'000 £'000
Profit for the financial year 4,614 3,333
Translation differences on foreign currency net investments (154) (125)
Actuarial gain on retirement benefit scheme 1,125 1,354
Associated deferred tax on retirement benefit scheme (407) (406)
Total recognised gains for the period 5,178 4,156
Prior year adjustment 7 (8)
Total gains and losses recognised since last annual report 5,170
Reconciliation of Movement in Shareholders' Equity (Unaudited)
for the year ended 30 June 2007
Notes 2007 2006
(restated)
£'000 £'000
Profit for the financial year 4,614 3,333
Other recognised profits relating to the year 564 823
LTIP expense net of vesting credit (114) (126)
Increase in own shares held by ESOT (204) (52)
Dividends 4,8 (1,122) (786)
Issue of ordinary shares 4,727 324
Increase in shareholders' equity 8,465 3,516
Opening shareholders' equity as previously reported 12,210 8,677
Prior year adjustments:
FRS 20 Share based payments (25) (8)
Opening shareholders' equity as restated 12,185 8,669
Increase in shareholders' equity 8,465 3,516
Closing shareholders' equity 20,650 12,185
Eleco plc
Summarised Consolidated Balance Sheet (Unaudited)
at 30 June 2007
2007 2006
(restated)
£'000 £'000
Fixed assets 20,601 13,935
Current assets
Stocks 3,441 2,821
Debtors 13,151 9,891
Cash at bank and in hand 5,940 6,852
22,532 19,564
Creditors: amounts falling due within one year (19,049) (16,394)
Net current assets 3,483 3,170
Total assets less current liabilities 24,084 17,105
Creditors: amounts falling due after more than one year (630) (954)
Provisions for liabilities and charges (274) (425)
Net assets excluding retirement benefit liability 23,180 15,726
Retirement benefit liability (2,530) (3,541)
Net assets 20,650 12,185
Capital and reserves
Called up share capital 5,674 5,033
Share premium account 10,310 6,024
Merger reserve 367 367
Other reserve (306) (102)
Profit and loss account 4,605 863
Shareholders' Equity 20,650 12,185
Eleco plc
Consolidated Cash Flow Statement (Unaudited)
for the year ended 30 June 2007
Notes 2007 2006
(restated)
£'000 £'000
Net cash inflow from continuing operations 9 6,133 7,975
Net cash inflow from operating activities 9 6,133 7,975
Returns on investment and servicing of finance
Net interest paid (9) (119)
Net cash outflow from returns on investment and servicing of finance (9) (119)
Net cash outflow from taxation (663) (494)
Capital expenditure and financial investment
Purchase of fixed assets (1,348) (1,384)
Disposal of fixed assets 315 930
Purchase of investments - (29)
Net cash outflow from capital expenditure and financial investment (1,033) (483)
Acquisitions and disposals
Purchase of subsidiary undertakings (3,969) (1,151)
Cash acquired with subsidiary undertakings 1,382 33
Net cash outflow from acquisitions and disposals (2,587) (1,118)
Equity dividends paid (1,122) (786)
Net cash inflow before financing 719 4,975
Financing
New bank loans - 650
Repayment of principal under finance leases (374) (321)
Repayment of bank loans (891) (885)
Issue of ordinary shares - 31
Own shares purchased by Employee Share Ownership Trust (204) (52)
Net cash outflow from financing (1,469) (577)
(Decrease)/increase in cash in the year 10 (750) 4,398
Eleco plc
Notes
1. The financial information in this announcement, which is unaudited, does not constitute statutory accounts within
the meaning of section 240 of the Companies Act 1985. Statutory accounts of the Company, on which the Auditors will
report, will be delivered to the Registrar of Companies and posted to shareholders from 17th October 2007. The
comparative figures for the year to 30 June 2006 have been taken from, but do not constitute, the Company's
statutory financial statements for that financial year. Those financial statements have been reported on by the
Auditors and delivered to the Registrar of Companies. The Report of the Auditors was unqualified and did not
contain a statement under s237(2) or (3) of the Companies Act 1985.
2. The information herein has been prepared on the basis of the accounting policies adopted for the year ended 30 June
2006, as set out in the Company's Annual Report and Accounts as modified by the adoption of new Financial Reporting
Standards as detailed in note 7 below.
3. Turnover and Segmental analysis
Group turnover and profits were attributable as follows:
Turnover Operating
profit/(loss)
2007 2007 2007 2006 2007 2007 2007 2007 2006
Prior to goodwill Goodwill
Continuing Acquisition Continuing Acquisition Charges (restated)
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Continuing
operations
Building Systems 51,793 - 51,793 48,544 6,119 - (32) 6,087 5,418
Software 7,853 2,432 10,285 6,653 (429) 497 (564) (496) (1,302)
Total continuing 59,646 2,432 62,078 55,197 5,690 497 (596) 5,591 4,116
operations
Exceptional - 476
profit/(loss)
Net interest 59 (156)
Profit before 5,650 4,436
taxation
4. A dividend of 0.70p per share was declared at the interim stage. A final dividend representing 1.80p per
share is being proposed and, if approved at the Annual General Meeting, will be payable on 23 November 2007
to shareholders on the Register on 19 October 2007.
5. The calculation of basic earnings per share is based on the profit attributable to equity shareholders of
£4,614,000 (2006: £3,333,000) and on 52,855,635 ordinary shares (2006: 48,961,869), being the weighted
average number of ordinary shares in issue during the year.
The calculation of diluted earnings per share is based on the profit attributable to equity shareholders of
£4,614,000 (2006: £3,333,000) and on 52,855,635 ordinary shares (2006: 50,003,519), being the weighted
average diluted number of ordinary shares in issue during the year.
6. On 15 December 2006, the Group acquired Asta Group Limited and subsidiaries for a consideration of £7.65
million. The consideration comprised the payment of £3,229,871 in cash, satisfied from the Group's existing
resources, the placing on behalf of the vendor of 3,750,000 of new ordinary shares to raise £3,000,000 and
the further issue to the vendors of £1,420,129 of new ordinary shares. Goodwill on acquisition of £7,261,692
has been capitalised and included within fixed assets. Cash amounting to £1,382,000 was acquired
7. The Company has adopted the following accounting standards in the year. The comparative figures at 30 June
2006 have been restated.
FRS 20 Share-based payments - requires that the fair value of equity-settled, share-based payments,
determined at the date of the grant, be expensed over the vesting period based on the Group's estimate of
the options that will eventually vest.
The Group has taken advantage of the transitional provisions of FRS 20 and has only applied FRS 20 to
equity-settled options and awards granted after 7 November 2002 that had not vested on or before 1 July
2006.
The effect of implementing FRS 20 is to increase profit before tax for the year June 2006 by £57,000 with
related decreases in equity.
8. Dividends 2007 2006
Pence Pence
Final dividend (previous year) 1.50 1.00
Interim dividend (current year) 0.70 0.60
Dividend included in movement in shareholders equity 2.20 1.60
9. Reconciliation of operating profit to net cash flow from operating activities
Continuing
2007 2006
(restated)
£'000 £'000
Operating profit 5,591 4,116
Depreciation charge 1,456 1,373
Amortisation of intangible assets 808 894
LTIP expense 181 167
Profit on sale of tangible assets (250) (17)
Working capital (increase)/decrease (1,653) 1,442
Net cash inflow from operating activities 6,133 7,975
10. Reconciliation of net cash flow to movement in net funds
2007 2006
£'000 £'000
(Decrease)/increase in cash in the year (750) 4,398
Cash flow from movements in debt and lease financing 1,265 556
Increase in net funds resulting from cash flows 515 4,954
Other non-cash items:
New finance leases (282) (414)
Effects of changes in foreign exchange rates (155) (34)
Increase in net funds in the year 78 4,506
Opening net funds 4,682 176
Closing net funds 4,760 4,682
11. The Annual General Meeting of Eleco plc will be held at The London Capital Club, 15 Abchurch Lane, London EC4N
7BB at 12:00 noon on 15 November 2007.
12. Copies of the Report and Accounts will be sent to shareholders from 17 October 2007 and will be available free
of charge from the Secretary at the Company's registered office, Eleco House, 15 Gentleman's Field,
Westmill Road, Ware, Hertfordshire, United Kingdom, SG12 0EF.
This information is provided by RNS
The company news service from the London Stock Exchange
Latest directors dealings
- 26 minutes ago ADVFN
- 33 minutes ago ADVFN
- 38 minutes ago Flutter Entertainment (CDI)
- 53 minutes ago Legal & General Group
- 1 hour ago Auction Technology Group