Final Results

Solid State Supplies PLC 01 July 2005 1 July 2005 Solid State Supplies PLC Preliminary Announcement for the year ended 31 March 2005 CHAIRMAN'S STATEMENT Results The audited profit before tax of the Group was Â£315,000 (2004: Â£268,000) after charging amortisation of goodwill of Â£35,000 (2004: Â£35,000) on a turnover of Â£9,480,000 (2004: Â£8,638,000). The basic earnings per share amounted to 3.8p (2004: 3.2p). Trading Review Solid State Supplies As has been widely reported, the component distribution market in the UK remains difficult. Despite this, Solid State Supplies is benefiting from the Group's Box Board Chip solutions strategy and has recorded a sequential improvement in both sales and profits over this period. Steatite The results for the year were disappointing for Steatite as the UK manufacturing market continues to decline. Notwithstanding these demanding market conditions, we have been encouraged by the level of new business opportunities that have been generated in the form of new customers with our new own branded products. Our order book has remained strong, but broadly flat during this period, the longer term element has risen, suggesting an upturn in the second half of calendar year 2005. Future Acquisitions In the report on the accounts for the year ended 31 March 2004, reference was made to a potential acquisition within the electronics industry. That acquisition could not proceed at that time, due to unresolved issues. These issues have now been resolved and I hope to be able to complete detailed contract negotiations and make a formal announcement about this in the near future. The acquisition will be treated as a Substantial Transaction for the purposes of the AIM Rules of the London Stock Exchange. Summary We remain committed to developing our technology solutions approach with the focus on the design led element of our business. This will improve our product brand and gain higher margins. This approach also provides closer ties with our customers by providing value added services in systems integration. In the light of the softness of the market in the UK with substantial shifting of the manufacturing base offshore and the continued trend towards globalisation of the electronics components distribution market, the Board is confident that its change of focus in strategy will strengthen the Group's performance in the medium to longer term. 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 3.5p per share. This compares with a total of 3p per share last year. The final dividend will be paid on 28 July 2005 to shareholders on the register at the close of business on 15 July 2005. Renewal of authority to purchase the Company's shares Last year, resolutions were passed at the Annual General Meeting to give the Company the authority to purchase its own Ordinary shares on the Stock Exchange. This authority would expire after a period of eighteen months from the passing of the resolution. In order to avoid this authority expiring during the next year and the need to call an extraordinary general meeting to renew the authority, a resolution to renew the authority is set out in the notice of the 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 in 923,476 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 73.47% 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 2005 CONSOLIDATED PROFIT AND LOSS ACCOUNT For the year ended 31 March 2005 2005 2004 Â£ Â£ Turnover 9,480,429 8,637,906 Cost of sales (6,698,300) (5,826,847) ----------------- ----------------- GROSS PROFIT 2,782,129 2,811,059 Selling expenses and distribution costs (1,181,137) (1,181,001) Administrative expenses (1,285,865) (1,296,491) ----------------- ----------------- OPERATING PROFIT 315,127 333,567 Other interest receivable and similar income 1,943 831 Interest payable (1,660) (66,243) ----------------- ----------------- PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 315,410 268,155 Tax on profit on ordinary activities (79,573) (71,575) ----------------- ----------------- PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 235,837 196,580 Dividends - Equity (216,505) (186,750) ----------------- ----------------- RETAINED PROFIT FOR THE YEAR 19,332 9,830 ----------------- ----------------- EARNINGS PER SHARE Basic 3.8p 3.2p Diluted 3.8p 3.2p 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 31 March 2005 Group Company 2005 2004 2005 2004 Â£ Â£ Â£ Â£ Profit for the year 235,837 196,580 305,934 153,190 Less: Dividends (216,505) (186,750) (216,505) (186,750) Purchase of own shares (33,811) - (33,811) - --------------- --------------- --------------- --------------- Net addition/(reduction) to shareholders' funds (14,479) 9,830 55,618 (33,560) Opening shareholders' funds 2,089,406 2,079,576 1,888,934 1,922,494 --------------- --------------- --------------- --------------- Closing shareholders' funds 2,074,927 2,089,406 1,944,552 1,888,934 --------------- --------------- --------------- --------------- CONSOLIDATED BALANCE SHEET at 31 March 2005 2005 2004 Â£ Â£ FIXED ASSETS Intangible assets 596,117 630,879 Tangible assets 415,322 546,098 Investments - 500 ----------------- ----------------- 1,011,439 1,177,477 CURRENT ASSETS Stocks 1,091,215 1,256,979 Debtors 1,941,024 2,026,621 Cash at bank in hand 108,536 159,494 ----------------- ----------------- 3,140,775 3,443,094 CREDITORS: Amounts falling due within one year 1,723,038 2,059,134 ----------------- ----------------- NET CURRENT ASSETS 1,417,737 1,383,960 ----------------- ----------------- TOTAL ASSETS LESS CURRENT LIABILITIES 2,429,176 2,561,437 CREDITORS: Amounts falling due after more than one year 354,249 472,031 ----------------- ----------------- 2,074,927 2,089,406 ----------------- ----------------- CAPITAL AND RESERVES Called up share capital 307,826 311,250 Share premium account 756,980 756,980 Capital redemption reserve 4,674 1,250 Profit and loss account 1,005,447 1,019,926 ----------------- ----------------- SHAREHOLDERS' FUNDS-EQUITY 2,074,927 2,089,406 ----------------- ----------------- The financial statements were approved by the Board on 1 July 2005 CONSOLIDATED CASH FLOW STATEMENT For the year ended 31 March 2005 2005 2004 Â£ Â£ Net cash inflow from operating activities 673,859 676,648 Return on investments and servicing of finance: Interest received 1,943 831 Hire purchase interest paid 29,522 (4,011) Other interest paid (31,182) (62,232) --------------- --------------- Net cash outflow from return on investments and servicing of finance 283 (65,412) Taxation Corporation tax paid (71,575) (4,856) Capital expenditure and financial investment Payments to acquire tangible fixed assets (80,616) (189,167) Receipts from sales of tangible fixed assets 25,934 19,137 --------------- --------------- Net cash outflow from capital expenditure and financial investment (54,682) (170,030) Acquisitions and disposals Receipt from sale of joint venture 500 - Purchase of business operation - (2,625) --------------- --------------- Net cash inflow/(outflow) from acquisitions and disposals 500 (2,625) Equity dividends paid (217,875) (186,750) --------------- --------------- Net cash inflow/(outflow) before financing 330,510 246,975 Financing Repayments of medium term loan: capital element (108,572) (128,909) Hire purchase finance repaid: capital element (32,318) (11,988) Invoice discounting finance (paid)/received (net movement) (122,675) 33,348 Purchase of own shares (33,811) - --------------- --------------- Net cash (outflow)/inflow from financing (297,276) (107,549) --------------- --------------- Increase in cash 33,234 139,426 --------------- --------------- NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2005 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 2005, 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 29 June 2005. 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: 2005 2004 Â£ Â£ United Kingdom 8,987,478 8,095,799 Europe 395,777 394,477 United States of America 60,704 8,722 Asia 25,189 109,080 Africa 8,834 27,154 Australasia 2,447 2,674 --------------- --------------- 9,480,429 8,637,906 --------------- --------------- 3. OPERATING PROFIT The operating profit is stated after charging/(crediting): 2005 2004 Â£ Â£ Depreciation 177,049 188,264 Loss/(profit) on disposal of fixed assets 8,409 (4,866) Amortisation of goodwill 34,762 34,762 Auditors' remuneration: Audit services 24,495 29,814 Operating lease rentals: Plant and machinery 23,227 41,337 Other 102,838 84,485 Foreign exchange gains (100,837) (57,416) Employment termination costs 14,896 4,645 Shares for All Employee Share Plan (940) 3,310 Relocation expenses - 607 ----------------- ----------------- Included in audit fees is an amount of Â£12,495 (2004: Â£21,314) in respect of the Company. Additional non-audit services regarding the purchase of Steatite Limited were Â£nil (2004: Â£2,625) and have been added to the goodwill figure on consolidation. 4. DIVIDENDS 2004 2003 Â£ Â£ Interim dividend paid of 1.5p per share (2004: 1p) 93,375 62,250 Final dividend proposed of 2p per share (2004: 2p) 123,130 124,500 ---------------- ---------------- 216,505 186,750 ---------------- ---------------- 5. EARNINGS PER SHARE 2005 2004 Â£ Â£ The earnings per share is based on the following: Earnings 235,837 196,580 ------------------ ------------------ Weighted average number of shares 6,207,342 6,225,000 Diluted number of shares 6,207,342 6,225,000 Earnings per share 3.8p 3.2p Diluted earnings per share 3.8p 3.2p 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 6,207,342 (2004: 6,225,000). The Diluted earnings per share is based on 6,207,342 (2004: 6,225,000) ordinary shares which allow for the exercise of all dilutive potential ordinary shares. 6. DEBTORS: Amounts receivable within one year Group Group Company Company 2005 2004 2004 Â£ Â£ Â£ Trade debtors 1,850,444 1,912,491 955,109 1,066,729 Amounts owed by Group undertakings - - 1,121,828 1,166,072 Other debtors 1,985 16,861 1,985 5,387 Prepayments and accrued income 88,595 97,269 58,538 47,321 ------------- ------------- ------------- ------------- 1,941,024 2,026,621 2,137,460 2,285,509 ------------- ------------- ------------- ------------- Group trade debtors include Â£436,248 (2004: Â£714,717) 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 31 March 2005, borrowing under the agreement of Â£314,711 (2004: Â£541,747) was available of which Â£69,799 (2004: Â£192,474) was taken up leaving unused borrowing facilities of Â£244,912 (2004: Â£349,273). Interest charges in the year amounted to Â£5,720 (2004: Â£17,234) and administration fees to Â£9,466 (2004: Â£9,840). 7. CREDITORS: Amounts falling due within one year Group Group Company Company 2005 2004 2004 Â£ Â£ Â£ Bank overdrafts (secured) 5,971 90,163 5,971 90,163 Bank loan (secured) 98,596 108,800 98,596 98,148 Trade creditors 1,049,345 1,116,482 380,057 605,568 Amounts due to invoice discounters 69,799 192,474 - - Corporation tax 79,573 71,575 79,573 71,575 Other taxes and social security costs 238,151 250,636 135,270 128,121 Proposed dividend 123,130 124,500 123,130 124,500 Obligations under hire purchase contracts - 12,804 - - Other creditors 4,694 32,621 4,694 15,185 Accruals and deferred income 53,779 59,079 25,082 31,144 ------------ ------------ ------------ ------------ 1,723,038 2,059,134 852,373 1,164,404 ------------ ------------ ------------ ------------ 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 Â£656,529 (2004: Â£572,337), which enables flexibility in the management of liquidity. The Company has guaranteed bank borrowings of its subsidiary undertaking. Steatite Limited. At the year end the liabilities covered by this guarantee amounts to Â£nil (2004: Â£nil). 8. CREDITORS: Amounts falling due after more than one year Group Group Company Company 2005 2004 2005 2004 Â£ Â£ Â£ Â£ Bank loan (secured) 354,249 452,617 354,249 452,617 Obligations under hire purchase contracts - 19,414 - - ----------- ----------- ----------- ----------- 354,249 472,031 354,249 452,617 ----------- ----------- ----------- ----------- Bank loan repayments are due: In more than one year but not more than two years 98,596 98,148 98,596 98,148 In more than two years but not more than five years 255,653 354,469 255,653 354,469 ----------- ----------- ----------- ----------- 354,249 452,617 354,249 452,617 ----------- ----------- ----------- ----------- The bank loan was for Â£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 4 July 2005 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 SDMFISSISELM

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