Interim Results
Radstone Technology PLC
8 November 2000
Radstone Technology PLC
('Radstone' or 'the Group')
Interim Results for the six months ended 30 September 2000
Radstone Technology PLC, one of the world's leading suppliers of
open architecture computer subsystems to the industrial and defence
sectors, announces Interim Results for the six months ended 30
September 2000.
Highlights
* Sales for the six months were up 46% at £18.2m, an increase of
£5.8m over last year.
On a like-for-like basis (excluding the business acquired in
December 1999), sales increased by £2.4m, a 19% improvement.
* Pre-tax profit increased by 92% to £1.2m (1999: £603,000)
* Basic earnings per share increased by 67% to 3.45p (1999:
2.07p)
* Operating cash inflow more than doubled to £2.65m (1999:
£1.23m)
* The period end order book stood at a record £59.9m (1999:
£25.7m). New orders received in the period were £32.4m, double
the same period last year
* Investment in product development was £1.4m, representing 7.9%
of Group sales
Rhys Williams, Chairman, commented:
'During this period, the Group has secured a substantial volume of
new business and my view of future opportunities is extremely
positive.
'The markets in which we operate remain encouraging and I am
confident we can maintain this pace of sales growth in the period
ahead. The prospects for the Group are for a sustained improvement
in sales, profits and cash.'
For further information please contact:
Radstone Technology PLC 01327 359444
Dr Charles Paterson, Group Managing Director, or
Jeff Perrin, Finance Director
Square Mile Communications Ltd 020 7601 1000
Nick Oborne / Stephanie Smart
8 November 2000
Radstone Technology PLC
('Radstone')
Interim Results for the six months ended 30 September 2000
Chairman's Statement
I am pleased to report a strong performance in the half year to 30
September 2000. Sales increased by 46%, pre-tax profit by 92% and
earnings per share by 67% against the corresponding period last
year.
Results
Sales for the six months were £18,196,000, an increase of
£5,758,000 over last year. On a like-for-like basis (excluding the
business acquired in December 1999), sales increased by £2,387,000,
a 19% improvement. This growth would have been even greater if it
were not for the industry wide current component shortages.
Pre-tax profits, at £1,245,000 (excluding goodwill) improved by
£642,000.
Basic earnings per share were 3.45p. Normalised earnings per share
(excluding goodwill written off and exceptional items) increased by
85% to 3.83p. With prior year tax losses having been fully consumed
last year, corporation tax at £344,000, represented a full charge
on profits; had a full tax charge been applied last year, the
normalised earnings per share increase would have been 95%.
The gross profit of 34.4% compares with 39.3% last year. The
decline in gross profit margin was expected, reflecting the
increased proportion of Contract Electronic Manufacturing (CEM)
sales within the Group total, following the December 1999
acquisition. On a like-for-like basis, excluding the acquired
business, gross profit would have shown a small improvement, to
39.8%.
The order book for future delivery ended the period at a record
£59,935,000, of which £14,800,000 is scheduled for delivery in the
second half of this year. The comparable figures for 1999 were
£25,700,000 and £8,800,000 respectively.
New orders received in the period were £32,378,000, double the same
period last year. The book to bill ratio for the period was
exceptionally high at 1.78, reflecting the transition to production
status of a number of important design wins in our main US market
place.
Business Development
Embedded Computing
The transition to production status of a growing number of US
design wins from earlier years was a notable feature of deliveries
in the period; sales increased to £10,948,000, 17% up on the
£9,328,000 achieved in the corresponding period last year.
The period saw major design win successes for the Group's rugged
VMEbus product family, both in the US and the UK. These wins,
which emphasised display and digital signal processing
applications, position the division well for the future.
We were particularly pleased to announce in September further
orders from Northrop Grumman, totalling $18 million, for the
upgrade of the US Army Firefinder Radar Programme.
CEM
Third party sales grew strongly in the half-year, from £3,110,000
to £7,248,000, an increase of 133%; excluding the acquisition,
organic growth was 25%.
Good progress was made in the task of integrating the acquired
business within the new unified management structure and in
upgrading the plant and equipment to Radstone Group standards.
This has enabled the Hawarden unit to compete successfully for new
third party assembly business and to qualify as an assembler of
products for the Group's Embedded Computing business.
Financial
Operating cash inflow for the period was £2,652,000 (1999:
£1,231,000), representing the results of strong operating profits
and reduced working capital.
Payments for servicing finance and taxation were respectively
£263,000 and £91,000 (1999: £89,000 and £64,000). Expenditure on
fixed assets, including leasing of £512,000 was £806,000 (1999:
£747,000). The purchase of the company's own shares as part of the
directors and senior managers' incentive plan amounted to £147,000.
The resultant cash inflow produced a £1,354,000 decrease in net
debt from 31 March 2000 to £5,247,000. Gearing was 40% at 30
September 2000 compared to 35% at 30 September 1999 and 53% at the
end of last year.
Investment in product development was £1,436,000, representing 7.9%
of Group sales and 13.1% of Embedded Computing sales (1999:
£1,300,000 representing 10.5% of Group sales and 13.9% of Embedded
Computing sales).
The Euro
The Radstone Group has adapted its financial processes to undertake
business in the Euro where necessary. The associated costs were
negligible.
Outlook
During this period, the Group has secured a substantial volume of
new business and my view of future opportunities is extremely
positive.
The markets in which we operate remain encouraging and I am
confident we can maintain this pace of sales growth in the period
ahead. The prospects for the Group are for a sustained improvement
in sales, profits and cash.
Rhys Williams
Chairman
For further information please contact:
Radstone Technology PLC 01327 359444
Dr Charles Paterson, Group Managing Director, or
Jeff Perrin, Finance Director
Square Mile Communications Ltd 020 7601 1000
Nick Oborne / Stephanie Smart
Group Profit and Loss Account
for the six months ended 30 September 2000
6 months to 6 months to 12 months to
30 September 30 September 31 March
2000 1999 2000
(neither audited (neither audited
nor reviewed) nor reviewed) (audited)
£'000 £'000 £'000
Turnover 18,196 12,438 30,163
Cost of sales (11,928) (7,548) (17,692)
------------------------------------------------------------------------------
Gross profit 6,268 4,890 12,471
Development costs (1,436) (1,300) (2,981)
Sales and marketing costs (2,302) (1,926) (4,175)
Administration costs (1,027) (955) (2,282)
Administration costs - goodwill (90) - (62)
------------------------------------------------------------------------------
Operating profit on ordinary
activities before interest 1,413 709 2,971
Net interest payable (258) (106) (310)
------------------------------------------------------------------------------
Profit on ordinary activities
before taxation 1,155 603 2,661
Taxation (344) (157) (262)
------------------------------------------------------------------------------
Retained profit for the period 811 446 2,399
------------------------------------------------------------------------------
Basic and headline earnings per share 3.45p 2.07p 10.82p
Normalised earnings per share 3.83p 2.07p 11.10p
Diluted earnings per share 3.41p 2.04p 10.64p
All results relate to continuing operations
Group Balance Sheet
At 30 September 2000
At At At
30 September 30 September 31 March
2000 1999 2000
(neither audited (neither audited
nor reviewed) nor reviewed) (audited)
£'000 £'000 £'000
Fixed assets
Goodwill 3,569 - 3,650
Intangible assets 25 19 30
Tangible assets 5,635 3,797 5,487
Investments in own shares 131 - -
------------------------------------------------------------------------------
9,360 3,816 9,167
------------------------------------------------------------------------------
Current assets
Stocks 9,104 6,870 7,976
Debtors 7,462 5,517 8,413
Cash at bank and in hand 948 1,444 778
------------------------------------------------------------------------------
17,514 13,831 17,167
------------------------------------------------------------------------------
Creditors: amounts
falling due within one year
Bank and other (1,361) (1,353) (2,550)
borrowings
Other creditors (7,410) (5,404) (6,574)
------------------------------------------------------------------------------
(8,771) (6,757) (9,124)
------------------------------------------------------------------------------
Net current assets 8,743 7,074 8,043
------------------------------------------------------------------------------
Total assets less current
liabilities 18,103 10,890 17,210
Creditors: amounts falling
due after more than one year
Bank and other borrowings (4,834) (2,869) (4,829)
Provisions for liabilities
and charges (35) (8) (35)
------------------------------------------------------------------------------
Net assets 13,234 8,013 12,346
------------------------------------------------------------------------------
Capital and reserves
Called up share capital 2,950 2,659 2,925
Share premium account 9,446 7,241 9,362
Revaluation reserve 218 218 218
Profit and loss account 620 (2,105) (159)
------------------------------------------------------------------------------
Equity shareholders'funds 13,234 8,013 12,346
------------------------------------------------------------------------------
Group Cash Flow Statement
For the six months ended 30 September 2000
6 months to 6 months to 12 months to
30 September 30 September 31 March
2000 1999 2000
(neither audited (neither audited
nor reviewed) nor reviewed) (audited)
£'000 £'000 £'000
Net cash inflow from operating
activities 2,652 1,231 2,407
------------------------------------------------------------------------------
Servicing of finance
Interest received 4 44 43
Interest paid (205) (96) (160)
Interest paid on finance leases (62) (37) (89)
------------------------------------------------------------------------------
(263) (89) (206)
------------------------------------------------------------------------------
Taxation
UK Corporation tax paid (74) - (322)
UK Corporation tax recovered 25 - -
Overseas tax paid (50) (64) (4)
Overseas tax recovered 8 - -
------------------------------------------------------------------------------
(91) (64) (326)
------------------------------------------------------------------------------
Capital expenditure and financial
investments
Acquisition of subsidiary - - (5,178)
Purchase of tangible fixed assets (294) (427) (969)
Purchase of intangible fixed assets - - (27)
Purchase of own shares (147) - -
------------------------------------------------------------------------------
(441) (427) (6,174)
------------------------------------------------------------------------------
Equity dividends paid - - -
------------------------------------------------------------------------------
Net cash inflow/(outflow)
before financing 1,857 651 (4,299)
------------------------------------------------------------------------------
Financing
Placing - - 2,387
Proceeds from share options 109 - -
New Loans - 1,000 2,500
Repayment of loans (383) (233) (497)
Payment of principle under
finance leases (640) (101) (254)
------------------------------------------------------------------------------
(914) 666 4,136
------------------------------------------------------------------------------
Increase/(decrease) in cash in
the period 943 1,317 (163)
------------------------------------------------------------------------------
Reconciliation of operating
profit to net cash inflow from
continuing operating activities
Operating profit 1,413 709 2,971
Amortisation of goodwill 90 - 62
Amortisation of intangible
fixed assets 5 10 26
Depreciation of tangible
fixed assets 657 418 980
Profit on disposal of tangible
fixed assets 1 - 41
Amortisation of investment
in own shares 16 - -
Increase in stocks (1,128) (857) (1,245)
Decrease in debtors 922 1,744 137
Increase/(decrease) in creditors 676 (793) (592)
Increase in provisions - - 27
------------------------------------------------------------------------------
Net cash inflow from continuing
operating activities 2,652 1,231 2,407
------------------------------------------------------------------------------
Notes:
1. The calculation of earnings per share has been expressed in four
separate ways.
(a) Basic earnings per share is the profit after tax of £811,000,
(interim 1999/00: £446,000, full year 1999/00: £2,399,000)
divided by the weighted average number of ordinary shares in
issue of 23,513,966, (interim 1999/00: 21,551,344, full year
1999/00: 22,162,159).
(b) Headline earnings per share has been recommended by the
Institute of Investment Management and Research (the IIMR).
6 months to 6 months to 12 months to
30 September 30 September 31 March
2000 1999 2000
Basic and headline earning 3.45p 2.07p 10.82p
per share
(c) Normalised earnings per share uses the same number of shares
as for basic earnings per share but uses an adjusted profit figure
as the numerator of the ratio, to eliminate the effect of the
amortisation of goodwill and any exceptional item. This is more
indicative of underlying performance and may be reconciled to basic
earnings per share as follows:
6 months to 6 months to 12 months to
30 September 30 September 31 March
2000 1999 2000
IIMR earnings per share 3.45p 2.07p 10.82p
Normalised adjustment:
Elimination of goodwill 0.38p - 0.28p
------------------------------------------------------------------------------
Normalised earnings per share 3.83p 2.07p 11.10p
(d)Diluted earnings per share are disclosed under the
requirements of FRS14 and are calculated from the following ratio.
6 months to 6 months to 12 months to
30 September 30 September 31 March
2000 1999 2000
Profit on ordinary £811,000 £446,000 £2,399,00
activities after taxation
Average number of shares
including outstanding options 23,789,720 21,885,388 22,547,306
The difference in the average number of shares in issue used as
the denominator of the calculation for the basic and diluted
earnings per share is due to the premium element of share
options still outstanding at the end of each financial period,
based on the average mid market share price during the period.
The adjustment to the number of shares is:
6 months to 6 months to 12 months to
30 September 30 September 31 March
2000 1999 2000
Premium element of share
options based on average
mid-market share price
during period 275,754 334,044 385,147
2. The above accounts do not constitute full accounts within the
meaning of S.240 of the Companies Act 1985. All figures for the
year to 31 March 2000 are abridged. Full accounts, on which the
report of the auditors was unqualified and did not contain a
statement under S.237 (2) or S.237 (3) of the Companies Act 1985,
have been delivered to the Registrar of Companies. The results for
the six months to 30 September are neither audited nor reviewed.
3. The profit and loss account, balance sheet and cash flow
statements have been prepared on a basis consistent with the
statutory financial statements for the year to 31 March 2000.
4. Copies of this report will be sent to shareholders and will
also be available at the Company's registered office.
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