Final Results

Solid State Supplies PLC 01 July 2004 Solid State Supplies PLC Preliminary Announcement for the year ended 31 March 2004 CHAIRMAN'S STATEMENT Results The audited profit before tax of the Group was £268,000 (2003: £240,000) after charging amortisation of goodwill of £35,000 (2003: £30,000) on a turnover of £8,638,000 (2003: £9,009,000). The basic earnings per share amounted to 3.2p (2003: 3.8p). Trading Review Solid State Supplies Our component distribution business is now beginning to benefit from our significant product design work as confidence returns to the market. In the second half of the year to 31st March 2004 our book to bill ratio was 1.06 to 1.00 and bookings were 27% higher than in the first half of the year. We will be introducing a number of new products during 2004 which will help us to build on this improvement in trading performance. Steatite As reported in our interim results, there have been signs of improvement within the electronic sector that Steatite serves. It is however too early to say whether there is a sustainable positive trend within the UK or indeed Europe. Currently order rates for Steatite have shown strong growth over the prior year. Recent contracts within the military, space and leisure industries have resulted in an order book in excess of £3 million. We believe that Steatite will continue to improve growth through new products and customers thereby improving its contribution to group profits. Future Acquisitions Following the acquisition of Steatite over two years ago, the Group has continued to look for suitable acquisitions within the electronics industry. The Board is pleased to announce that it is currently in discussions that may lead to an acquisition which if it were to proceed would be a useful addition to our activities. The acquisition would be treated as a Substantial Transaction for the purposes of the AIM Rules of the London Stock Exchange. I hope to be able to complete final negotiations and make a formal announcement about this in due course. Dividends The Directors are recommending a final dividend of 2p per share which, together with the interim dividend, makes a total for the year of 3p per share. This compares with a total of 3.5p per share last year. The final dividend will be paid on 28th July 2004 to shareholders on the register at the close of business on 9th July 2004. Renewal of authority to purchase the Company's shares Your directors have considered that it would be advantageous for the Company to have authority to purchase its own Ordinary shares on the Stock Exchange. It is necessary to seek the approval of the Ordinary shareholders to the specific proposals contained in this document. Accordingly a resolution for this purpose is set out in the notice of Annual General Meeting. Under the terms of the resolution to be proposed at the Annual General Meeting, the maximum number of shares which may be purchased is 933,750 shares representing 15% of the issued ordinary share capital of the Company. The minimum price payable by the Company for its Ordinary shares will be 35p and the maximum price will be 150p. The authority will automatically expire after a period of eighteen months from the passing of the resolution unless renewed. It is not the Directors' current intention to exercise the power to purchase the Company's Ordinary shares but they believe that under certain circumstances it would be in the Company's best interests to do so. Your Directors consider that the resolution to be proposed at the meeting is in the best interests of the Company and its shareholders. They unanimously recommend that all Ordinary shareholders vote in favour of the resolution at the Annual General Meeting as they intend to do in respect of their beneficial holdings amounting to 4,523,106 Ordinary shares, representing 72.66% of the Company's issued Ordinary share capital. Conclusion I would like to thank my fellow Directors and the staff in general for their continued support. Peter Haining Chairman 1 July 2004 CONSOLIDATED PROFIT AND LOSS ACCOUNT For the year ended 31st March 2004 2004 2003 £ £ Turnover 8,637,906 9,008,989 Cost of sales (5,826,847) (6,248,440) ----------------- ----------------- GROSS PROFIT 2,811,059 2,760,549 Selling expenses and distribution costs (1,181,001) (1,136,385) Administrative expenses (1,296,491) (1,328,049) ----------------- ----------------- OPERATING PROFIT 333,567 296,115 Other interest receivable and similar income 831 5,316 Interest payable (66,243) (60,955) ----------------- ----------------- PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 268,155 240,476 Tax on profit on ordinary activities (71,575) (4,856) ----------------- ----------------- PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 196,580 235,620 Dividends - Equity (186,750) (217,875) ----------------- ----------------- RETAINED PROFIT FOR THE YEAR 9,830 17,745 ----------------- ----------------- EARNINGS PER SHARE Basic 3.2p 3.8p Diluted 3.2p 3.7p All amounts relate to continuing activities There were no recognised gains or losses other than the profit for the year as stated above. RECONCILIATION OF MOVEMENT IN GROUP SHAREHOLDERS' FUNDS For the year ended 31st March 2004 2004 2003 £ £ Profit for the year 196,580 235,620 Less: Dividends (186,750) (217,875) ------------------ ------------------ Net addition to shareholders' funds 9,830 17,745 Opening shareholders' funds 2,079,576 2,061,831 ------------------ ------------------ Closing shareholders' funds 2,089,406 2,079,576 ------------------ ------------------ CONSOLIDATED BALANCE SHEET at 31st March 2004 2004 2003 £ £ FIXED ASSETS Intangible assets 630,879 663,016 Tangible assets 546,098 559,466 Investments 500 500 ----------------- ----------------- 1,177,477 1,222,982 CURRENT ASSETS Stocks 1,256,979 1,193,606 Debtors 2,026,621 2,049,142 Cash at bank in hand 159,494 16,385 ----------------- ----------------- 3,443,094 3,259,133 CREDITORS: Amounts falling due within one year 2,059,134 1,814,592 ----------------- ----------------- NET CURRENT ASSETS 1,383,960 1,444,541 ----------------- ----------------- TOTAL ASSETS LESS CURRENT LIABILITIES 2,561,437 2,667,523 CREDITORS: Amounts falling due after more than one year 472,031 587,947 ----------------- ----------------- 2,089,406 2,079,576 ----------------- ----------------- CAPITAL AND RESERVES Called up share capital 311,250 311,250 Share premium account 756,980 756,980 Capital redemption reserve 1,250 1,250 Profit and loss account 1,019,926 1,010,096 ----------------- ----------------- SHAREHOLDERS' FUNDS-EQUITY 2,089,406 2,079,576 ----------------- ----------------- The financial statements were approved by the Board on 30th June 2004. CONSOLIDATED CASH FLOW STATEMENT For the year ended 31st March 2004 2004 2003 £ £ Net cash inflow from operating activities 676,648 293,730 Return on investments and servicing of finance: Interest received 831 5,316 Interest paid (66,243) (60,955) --------------- --------------- Net cash outflow from return on investments and servicing of (65,412) (55,639) finance Taxation Corporation tax paid (4,856) (31,990) Capital expenditure and financial investment Payments to acquire tangible fixed assets (189,167) (119,075) Payments to acquire investments - (400) Receipts from sales of tangible fixed assets 19,137 30,882 --------------- --------------- Net cash outflow from capital expenditure and financial (170,030) (88,593) investment Acquisitions and disposals Purchase of business operation (2,625) (1,312,458) Equity dividends paid (186,750) (280,125) --------------- --------------- Net cash inflow/(outflow) before financing 246,975 (1,475,075) Financing Medium term loan received - 750,000 Repayments of medium term loan: capital element (128,909) (102,307) Hire purchase finance repaid: capital element (11,988) (57,317) Invoice discounting finance received net movement 33,348 159,126 --------------- --------------- Net cash (outflow)/inflow from financing (107,549) 749,502 --------------- --------------- Increase/(decrease) in cash 139,426 (725,573) --------------- --------------- NOTES TO THE FINANCIAL STATEMENTS For the year ended 31st March 2004 1. The attached preliminary announcement is prepared on the same basis as set out in the previous year's annual accounts and does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985; the statutory accounts for the year ended 31 March 2004, upon which an unqualified audit opinion has been given and which did not contain a statement under Section 235, 237(2) or 237(3) of the Companies Act 1985, will be delivered to the Registrar of Companies at a later date. A duly appointed and authorised committee of the Board of Directors approved the preliminary announcement on 30 June 2004. 2. SEGMENTAL ANALYSIS The turnover and profit before taxation are attributable to the one principal activity of the Group. All operations are located in the United Kingdom. An analysis of sales by destination is as follows: 2004 2003 £ £ United Kingdom 8,095,799 7,939,739 Europe 394,477 741,536 United States of America 8,722 42,450 Asia 109,080 281,989 Africa 27,154 3,275 Australasia 2,674 - --------------- --------------- 8,637,906 9,008,989 --------------- --------------- 3. OPERATING PROFIT The operating profit is stated after charging/(crediting): 2004 2003 £ £ Depreciation 188,264 146,199 (Profit)/loss on disposal of fixed assets (4,866) 2,396 Amortisation of goodwill 34,762 29,602 Auditors' remuneration: Audit services 29,814 22,045 Operating lease rentals: Plant and machinery 41,337 43,107 Other 84,485 153,133 Foreign exchange gains (57,416) (27,336) Employment termination costs 4,645 30,000 Shares for All Employee Share Plan 3,310 7,833 Relocation expenses 607 16,388 ----------------- ----------------- Included in audit fees is an amount of £21,314 (2003: £12,045) in respect of the Company. Additional non-audit services regarding the purchase of Steatite Limited were £2,625 (2003: £5,500) and have been added to the goodwill figure on consolidation. 4. DIVIDENDS 2004 2003 £ £ Interim dividend paid of 1p per share (2002: 1.5p) 62,250 93,375 Final dividend proposed of 2p per share (2002: 2p) 124,500 124,500 ---------------- ---------------- 186,750 217,875 ---------------- ---------------- 5. EARNINGS PER SHARE 2004 2003 £ £ The earnings per share is based on the following: Earnings 196,580 235,620 ------------------ ------------------ Weighted average number of shares 6,225,000 6,225,000 Diluted number of shares 6,225,000 6,424,000 Earnings per share 3.2p 3.8p Diluted earnings per share 3.2p 3.7p Earnings per ordinary share has been calculated using the weighted average number of shares in issue during the year. The weighted average number of equity shares in issue was 6,225,000 (2003: 6,225,000). The Diluted earnings per share is based on 6,225,000 (2003: 6,424,000) ordinary shares which allow for the exercise of all dilutive potential ordinary shares. 6. DEBTORS: Amounts receivable within one year Group Group Company Company 2004 2003 2004 2003 £ £ £ £ Trade debtors 1,912,491 1,953,738 1,066,729 884,881 Amounts owed by Group undertakings - - 1,166,072 1,263,906 Other debtors 16,861 9,945 5,387 - Prepayments and accrued income 97,269 85,459 47,321 47,307 ------------- ------------- ------------- ------------- 2,026,621 2,049,142 2,285,509 2,196,094 ------------- ------------- ------------- ------------- Group trade debtors include £541,747 (2003: £474,562) which are subject to an invoice discounting agreement. Under this agreement, borrowing equal to 80% of the relevant book debts can be taken with interest charged at 1.5% over bank base rate and an administration fee of 3% of the gross value of debts per month. At 31st March 2004, borrowing under the agreement of £347,741 (2003: £379,650) was available of which £192,474 (2003: £159,126) was taken up leaving unused borrowing liabilities of £155,256 (2003: £220,524). Interest charges in the year amounted to £17,234 (2003: £14,477) and administration fees to £9,840 (2003: £12,091). 7. CREDITORS: Amounts falling due within one year Group Group Company Company 2004 2003 2004 2003 £ £ £ £ Bank overdrafts (secured) 90,163 86,480 90,163 86,480 Bank loan (secured) 108,800 133,781 98,148 91,148 Trade creditors 1,116,482 999,592 605,568 397,562 Amounts due to invoice discounters 192,474 159,126 - - Corporation tax 71,575 4,856 71,575 4,856 Other taxes and social security costs 250,636 177,964 128,121 92,828 Proposed dividend 124,500 124,500 124,500 124,500 Obligations under hire purchase contracts 12,804 12,804 - - Other creditors 32,621 37,287 15,185 13,989 Accruals and deferred income 59,079 78,202 31,144 38,478 ------------ ------------ ------------ ------------ 2,059,134 1,814,592 1,164,404 849,841 ------------ ------------ ------------ ------------ The bank loan and overdraft are secured by a fixed and floating charge over the assets of the Company and the Group. At the balance sheet date, the Group had an undrawn overdraft facility of £572,337 (2003: £576,020), which enables flexibility in the management of liquidity. 8. CREDITORS: Amounts falling due after more than one year Group Group Company Company 2004 2003 2004 2003 £ £ £ £ Bank loan (secured) 452,617 556,545 452,617 556,545 Obligations under hire purchase contracts 19,414 31,402 - - ----------- ----------- ----------- ----------- 472,031 587,947 452,617 556,545 ----------- ----------- ----------- ----------- Bank loan repayments are due: In more than one year but not more than two years 98,148 91,148 98,148 91,148 In more than two year but not more than five years 354,469 340,397 354,469 340,397 In more than five years - 125,000 - 125,000 ----------- ----------- ----------- ----------- 452,617 556,545 452,617 556,545 ----------- ----------- ----------- ----------- The whole of the obligations under hire purchase contracts is due in less than two years. The bank loan was for £750,000 taken out in May 2002 and repayable by instalments over seven years. The loan is secured by a fixed and floating charge over the assets of the Company and the Group. 9. The Annual Report will be sent to shareholders on 1 July 2004 and made available to the public at the registered office of the Company at Unit 2, Eastlands Lane, Paddock Wood, Kent, TN12 6BU This information is provided by RNS The company news service from the London Stock Exchange

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