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Datrontech Group PLC (DTR)

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Wednesday 19 April, 2000

Datrontech Group PLC

Final Results - Year Ended 2 January 2000

Datrontech Group PLC
19 April 2000

                             
                   DATRONTECH GROUP PLC
                             
  Preliminary Statement for the period to 2 January 2000

Datrontech Group, the European PC component and value added
networking  products and services distributor, reports  its
preliminary results for the period to 2 January 2000.

Key Points

(   Sales  from  continuing operations  of  £200.7m  (1999:
  £223.3m)

(   Loss  before  tax  of £8.199m (1999:  Profit  £2.045m),
  reflects exceptional items of £7.9m

(  Second half pre-tax profits stood at £0.401m.

(  Basic Loss per share of 19.3p (1999: Earnings 2.2p)

(   Exceptional costs of £7.9m includes £3.6m write-off  of
  goodwill  following disposal of RDT and  closure  of  the
  Eastern European companies, and a tangible loss of £2.669m
  on closure of the Eastern European companies.

(  Net debt significantly reduced to £12.5m from £18.1m.

(   Working  capital performance continues to improve  with
  significant  efficiency gains contributing positively  to
  generation of net cash inflow from operations of £10.2m.

Ray  Way,  Chairman of Datrontech Group said  that...  'The
closure  of  the  Eastern  European  companies,  which  was
reported at the interim stage, is now complete.  1999 was a
difficult year for the Group and the immediate task  is  to
achieve  a  much  better  level of  profitability.  We  are
fortunate  to  have  a  group of committed  management  and
enthusiastic  employees who are dedicated to restoring  the
fortunes of the Group.'

Enquiries

Ray Way, Chairman                    01256 360360
David Holloway, Finance Director
Datrontech Group

Suzanne Dunne
Buchanan Communications               020 7466 5000

CHAIRMAN'S STATEMENT


RESULT

Although  the  loss  before tax and  exceptional  items  of
£299,000  was disappointing, the achievement  of  a  second
half  profit  before tax of £401,000 was encouraging.   The
loss  of £7,900,000 from exceptional items includes  write-
offs of goodwill of £3.6m arising from the disposal of  RDT
and  the  closure of the Eastern European  companies.   The
tangible  loss on the closure of Eastern European companies
of  £2,669,000 is in line with the forecast that I gave  in
the Interim Statement.

Net  debt  at  the  year-end at £12,497,000  represented  a
significant reduction from the debt at the beginning of the
year  (£18,125,000).  We continue to enjoy the  support  of
our bankers in following through our strategy.

There will be no dividend payable for the year.

TRADING

The  current  Group  comprises five UK companies  based  in
Basingstoke, ICP based in the Netherlands, C-Connect  based
in  Switzerland  and a small company, PC Direct,  based  in
Poland.  The UK companies' activities complement each other
and  offer a wide range of products and services to support
re-sellers and assemblers.  Our strategy is to use  the  UK
expertise  to  assist ICP in particular  to  broaden  their
range  of  services to replicate the breadth that has  been
achieved in the UK.

Datrontech  UK is a distributor of components  to  the  SME
market  via  assemblers  and  re-sellers.   New  management
appointed during the year is changing its emphasis from low
margin  components  towards  higher  added  value  products
including   networking.    A  significant   part   of   the
exceptional costs relate to the re-organisation of  Summit,
our  storage  company, which during the year was  relocated
from Colchester to Basingstoke.  Summit now concentrates on
specialist   storage  products  and  the  general   storage
components are sold through Datrontech UK.

Portable  Add-ons is one of the UK's leading  suppliers  of
products  for  mobile  computing.  It  specialises  in  the
supply and support of communication technologies for laptop
computers.   Many new products are planned to  be  launched
during  the  current  year.  Mobile  computing  is  a  fast
growing sector of the IT industry and the prospects for the
company are good.

Data   Connectivity  is  a  true  value  added   networking
distributor  with extensive field based staff  and  support
personnel.    Many  significant  projects  were   won   and
implemented during the year.  In the current year  we  will
see increased focus on voice and data convergence.

Datrontech  Retail specialises in producing  and  supplying
products for major retail chains.  It particularly  focuses
on supplying new technology products packaged and presented
in  a  form  suitable for the retail markets.  It performed
well in 1999.

ICP is a distributor of components with sales operations in
Holland, Belgium and Denmark. It also builds PCs to  order.
During  1999 it started to broaden its activities and  this
drive  will  be  accelerated in the current  year  as  Data
Connectivity and Portable Add-ons extend their portfolio to
the  Benelux  countries.  ICP's investment  in  Van  Berkel
(Laser)  was  sold for a profit in February  2000.   During
2000  we intend to establish clear ties between ICP and  C-
Connect in Switzerland.

The  closure of the Eastern European companies,  which  was
reported at the interim stage, is now complete.

In  common  with many competitors, trading in  January  and
February  was  disappointing but activity levels  in  March
picked  up  markedly.   It is too  early  to  predict  with
certainty  whether  this encouraging  improvement  will  be
maintained  but the better focused Group that we  now  have
should   assist  in  achieving  the  improvements  in   the
performance that we are all aiming for.


MANAGEMENT AND THE BOARD

Now that the restructure and divestment policy of the Group
is largely complete Mark Mulford has stepped down as CEO to
concentrate  full time on investigating the possibility  of
developing  an  Application  Service  Provider  (ASP)   for
business to business (B2B) applications in mobile computing
and remote access.  If successful this would capitalise and
strengthen   the  specialities  of  the  Datrontech   Group
companies in the high growth arena of mobile computing  and
communications.

I  am pleased to say that Ray Peck has joined us as the new
CEO  of the Group with effect from 19 April 2000.  Ray  has
significant experience outside the IT industry in  managing
and   developing  distribution  companies   and   achieving
significant improvements in them.  I am very confident that
he  is the right man to lead the Group to help restore  its
fortunes.  The Executive Directors are now Ray Peck,  Allan
Mack,  Ian Boyle and David Holloway, who joined us as Group
Financial Director in September 1999.

During  the year three new General Managers, James  Morgan,
Steve  Muttram  and  Mark Davison were  recruited  to  head
Datrontech UK, Portable Add-ons and Summit respectively.

1999  was  a difficult year for the Group.  Downsizing  and
restructuring a group always causes significant strains for
employees  particularly when seen  against  a  backdrop  of
disappointing trading.  We are fortunate to have a group of
committed  management and enthusiastic  employees  who  are
dedicated to restoring the fortunes of the Group.

CONCLUSION

The  immediate  task is to achieve a much better  level  of
profitability.   Most of the large scale  restructuring  is
now  complete  but Ray Peck will be reviewing  the  Group's
operations   with  the  Board  and  senior  management   to
determine  the  most effective strategy for developing  the
undoubted  potential of the companies that  remain  and  to
achieve   a   co-ordinated  strategy  for  maximising   the
opportunities that owning similar companies in the UK,  the
Netherlands and Switzerland offers us.

FINANCE DIRECTOR'S REPORT

RESULTS

The  Chairman's report refers to the result for  the  year,
namely  a  loss  before tax of £8.2m, having  been  heavily
impacted by exceptional restructuring costs of £7.9m.

These  costs  are part of the process of concentrating  the
Group's  activities on its core elements, with  a  view  to
restoring the profitability of the business.  The half-year
statement  referred  to proposed closure  costs  associated
with  the Group's withdrawal from Eastern Europe (with  the
exception of PC Direct), which have been secured at a  cost
of £2.7m plus £1.0m of goodwill written off.

Costs  of  £3.2m  have been incurred in  restructuring  and
refinancing the UK operations, of which £1.7m was  included
at the half-year.

The  Group  disposed of RD Trading resulting in a  loss  on
disposal  of  £1.2m, including a write-back of goodwill  of
£2.6m, and also sold its 49% interest in DMC Holdings  Ltd,
resulting in a gain on disposal of £0.2m.

The  Group's operating profit on ordinary activities before
taxation  and  interest was £1.2m, £3m  below  last  year's
comparative  of  £4.2m.  Last year's  result  included  the
additional benefit of £1m from profit on disposal and share
of  associate's profit, whilst discontinued businesses also
contributed  an  additional  c£1.7m  before  becoming  loss
making.  Encouragingly, £1m of this year's operating profit
relates   to  the  second  half-year,  representing   early
indicative signs of the benefits of restructuring.

BALANCE SHEET

The  exceptional  costs  have  similarly  impacted  on  the
Group's  net assets, which have decreased from £3.7m  to  a
negative   £0.8m  as  at  2  January  2000.   The  goodwill
adjustments  in  respect of RD Trading and  Eastern  Europe
were  transfers between reserves and had no overall  effect
on equity shareholders' funds.

The   balance  sheet  also  includes  outstanding  deferred
consideration of £2.7m in respect of previous acquisitions.
Last  year's  comparative amount was £8.9m.  The  remaining
deferred  consideration will be satisfied during 2000,  and
thereafter the Group's cash flow will be unhindered by this
burden, which since 1995 has amounted to £24.3m in total.

Goodwill  written off against reserves has reduced  in  the
year from £27.7m to £22.1m as a result of the disposals and
closures referred to above.

Working  capital  performance continues  to  improve,  with
significant efficiency gains contributing positively to the
generation of a net cash inflow from operations  of  £10.2m
in the year.

Cash

At  the  year-end, the Group had net borrowings of  £12.5m,
compared  with  £18.1m at the end of 1998, a  reduction  of
£5.6m  after meeting deferred consideration commitments  of
£3.4m.   The  movements for the year  in  summary  were  as
follows:
                               £m
Opening net debt             (18.1)
                                 
Cash     flow     from        10.2     
operations
Net interest paid             (1.5)     
Taxation                      (0.7)
1998 Final dividend           (0.4)
Capital expenditure           (1.1)
Acquisitions                  (3.4)
Disposals                      2.7     
Debt  disposed of with           
subsidiary                     0.5
Translational                 (0.7) 
differences              
Net  movement  in  the         5.6
year
                                 
Closing net debt             (12.5)

Cash  inflow from disposals was £2.7m, consisting of  £1.5m
from the disposal of RD Trading and £1.2m from the disposal
of the Group's 49% share of DMC Holdings.

In  January 1999, the Group acquired a 45% interest in  Van
Berkel,  a Dutch PC assembler. In February 2000, the  Group
disposed of this interest at a profit of £0.3m.

Funding and Treasury Policies

At  the  end  of the period, the Group had total  overdraft
facilities  of  £21m  from National Westminster  Bank,  ING
Bank,  UBS  and  AmerBank, and a term loan  of  £5.1m  from
National  Westminster Bank.  All borrowings are on variable
interest  rates.   Local currency borrowings  are  used  to
mitigate  exposures on overseas earnings  and  net  assets,
which are translated at the year-end rate.

The  current level of facilities is adequate for the future
needs of the Group, and cash flow receives close management
attention in order to ensure that resources are efficiently
deployed.

Summary

The  Group has experienced rapid expansion in recent years,
both organic and via acquisition, which has contributed  to
the  problems encountered during the last two years.   1999
has  been  a year of management extricating the Group  from
some  of  these fundamental issues, by way of managing  the
implicit  risks to more acceptable levels, so enabling  the
business  to  concentrate on its core areas  of  expertise.
This  has  been achieved whilst maintaining a  strong  cash
flow  and  reducing the debt burden.  The  significance  of
this  achievement should not be underestimated as the Group
is  now well placed to exploit the potential offered by its
core markets in a more controlled and efficient manner.

Consolidated   Profit   and                                         
Loss Account
For  the  Period  Ended   2 January 2000
                                                                      
                                                    Period    Period
                                                     ended     ended
                                                         2         4
                               Before              January   January
                             Exceptio   Exceptio      2000      1999
                                  nal        nal
                                Items      Items     Total         
                                £'000      £'000     £'000     £'000
Turnover                                                            
Continuing operations         200,727          -   200,727   223,291
Discontinued operations         7,558          -     7,558    41,764
                              208,285          -   208,285   265,055
                                                                    
Cost of sales                (187,114)    (2,073) (189,187) (235,008)
                                                                    
Gross profit (loss)            21,171     (2,073)   19,098    30,047
                                                                    
Operating expenses            (20,085)    (3,788)  (23,873)  (26,882)
                                                                    
Operating profit (loss)                                             
Continuing operations           1,273     (3,192)   (1,919)    4,575
Discontinued operations         (187)     (2,669)   (2,856)   (1,410)
                                1,086     (5,861)   (4,775)    3,165
                                                                     
Share     of    associate's       156          -       156       432
operating profit
(Loss)  profit on  disposal         -     (1,232)   (1,232)      604
of subsidiary undertaking
Profit   on   disposal   of         -        158       158         -
associated undertaking
Loss     on    discontinued         -       (965)     (965)        -
operations
Profit  (loss) on  ordinary     1,242     (7,900)   (6,658)    4,201
activities before tax
         interest
                                                                    
Interest receivable             1,137          -     1,137       343
Interest payable               (2,678)         -    (2,678)   (2,499)
(Loss)  profit on  ordinary      (299)    (7,900)   (8,199)    2,045
activities before taxation
                                                                    
Tax  on  (loss)  profit  on        90        115       205    (1,175)
ordinary activities
(Loss)  profit on  ordinary      (209)    (7,785)   (7,994)      870
activities after taxation
                                                                    
Dividends paid and proposed         -          -         -      (888)
                                                                    
Retained (loss) profit           (209)    (7,785)   (7,994)      (18)
                                                                    
(Loss) earnings per share                                           
Basic                            (0.5p)    (18.8p)   (19.3p)    2.2p
Diluted                          (0.5p)    (18.3p)   (18.7p)    1.8p
                                                                    
Consolidated  Statement  of                          Period   Period
Total Recognised                                      ended    ended
Gains and Losses                                          2        4
                                                    January  January
                                                       2000     1999
                                                      £'000    £'000
(Loss)   profit   for   the                          (7,994)     870
financial year
(Loss)   gain  on   foreign                            (830)     139
currency translation
                                                     (8,824)   1,009

Consolidated  Profit   and                            
Loss Account
For  the  Period  Ended  2                 H1         
January 2000
                                                  
                                                   Period 
                               Before    Except     Ended
                               Except     Items    4 July
                                ional     ional      1999
                                Items     Items     Total       
                                £'000     £'000     £'000 
                                                      
Turnover                                              
Continuing operations         111,075             111,075 

Discontinued operations         1,704               1,704 
                              112,779             112,779 
                                                      
Cost of sales                (100,259)   (1,049) (101,308) 
                                                      
Gross profit                   12,520    (1,049)   11,471 
                             
                                                      
Operating expenses            (12,484)     (605)  (13,089) 
                                                      
Operating profit                                      
Continuing operations            (123)   (1,654)   (1,777) 
Discontinued operations           159                 159 
                                   36    (1,654)   (1,618) 
                                                      
Share    of    associate's        156                 156 
operating profit

(Loss)  Profit on disposal               (1,232)   (1,232) 
of subsidiary undertaking      

Profit   on  disposal   of                  158       158 
associated undertaking

Loss    on    discontinued                            
operations
Profit     on     ordinary        192    (2,728)   (2,536) 
activities before tax  and                  
interest
                                                      
Interest receivable               572                 572 
Interest payable               (1,464)             (1,464) 
    
Profit     on     ordinary       (700)   (2,728)   (3,428) 
activities before taxation       
                                                      
Tax  on profit on ordinary        133       520       653 
activities
Profit     on     ordinary       (567)   (2,208)   (2,775) 
activities after taxation   
                                                      
Dividends     paid     and                            
proposed
                                                      
Retained (loss) profit           (567)   (2,208)   (2,775) 
                                   
                                                      
                                                      
Consolidated Statement  of                     Period 
Total Recognised                                ended
Gains and Losses
                                               4 July 
                                                 1999 
                                                £'000 
Profit  for the  financial                     (2,775) 
year                                                
Gain   (loss)  on  foreign                       (603) 
currency translation
                                               (3,378) 
                         


Consolidated  Profit   and                             
Loss Account
For  the  Period  Ended  2                  H2         
January 2000                            
                                                  Period
                                                   Ended
                                                 2 January
                                                    1999          
                               Before    Except     
                               Except     Items   
                                ional     ional      
                                Items     Items     Total       
                                £'000     £'000     £'000
Turnover                                               
Continuing operations           89,652             89,652 
Discontinued operations          5,854              5,854 
                                95,506             95,506 
                                                       
Cost of sales                  (86,855)   (1,024) (87,879) 
                                                       
Gross profit                     8,651    (1,024)   7,627 
                                                       
Operating expenses              (7,601)   (3,183  (10,784) 
                                                       
Operating profit                                       
Continuing operations            1,396    (1,538)    (142) 

Discontinued operations           (346)   (2,669)  (3,015) 
                                 1,050    (4,207)  (3,157) 

                                                       
Share    of    associate's                             
operating profit
(Loss)  Profit on disposal                             
of subsidiary undertaking
Profit   on  disposal   of                             
associated undertaking
Loss    on    discontinued                  (965)    (965) 
operations
Profit     on     ordinary       1,050    (5,172)  (4,122) 
activities before tax  and     
interest
                                                        
Interest receivable                565                565 
Interest payable                (1,214)            (1,214) 
Profit     on     ordinary         401    (5,172)  (4,771) 
activities before taxation        
                                                       
Tax  on profit on ordinary         (43)     (405)    (448) 
activities
Profit     on     ordinary         358    (5,577)  (5,219) 
activities after taxation        
                                                       
Dividends     paid     and                             
proposed
                                                       
Retained (loss) profit             358    (5,577)  (5,219) 
                                                       
                                                       
Consolidated Statement  of                      Period  
Total Recognised                                ended
Gains and Losses  
                                             2 January
                                                  2000  
                                                 £'000  
Profit  for the  financial                      (5,219) 
year                                  
Gain   (loss)  on  foreign                        (227) 
currency translation
                                                (5,446) 

Consolidated Profit and Loss Account
For  the  Period  Ended  2                 Full                
January 2000                               Year
                                                               
                                                  Period      Period
                                                   ended       ended
                                                       2           4
                                                 January     January
                                                    2000        1999
                               Before               
                               Except     Except         
                                ional      ional    
                                Items      Items    Total        
                                £'000     £'000     £'000     £'000
                                                                
Turnover                                                        
Continuing operations          200,727            200,727    223,291
Discontinued operations          7,558              7,558     41,764
                               208,285            208,285    265,055
                                                                
Cost of sales                 (187,114)  (2,073) (189,187)  (235,008)

Gross profit                    21,171   (2,073)   19,098     30,047

                                                                
Operating expenses             (20,085)  (3,788)  (23,873)   (26,882)
                                                                
Operating profit                                                
Continuing operations            1,273   (3,192)   (1,919)     4,575
Discontinued operations           (187)  (2,669)   (2,856)    (1,410)
                                 1,086   (5,861)   (4,775)     3,165
                                                                
Share    of    associate's         156                156        432
operating profit
(Loss)  Profit on disposal               (1,232)   (1,232)       604
of subsidiary undertaking      
Profit   on  disposal   of                  158       158        
associated undertaking
Loss    on    discontinued                 (965)     (965)        
operations
Profit     on     ordinary       1,242   (7,900)   (6,658)     4,201
activities before tax  and  
interest
                                                                
Interest receivable              1,137              1,137        343
Interest payable                (2,678)            (2,678)    (2,499)
Profit     on     ordinary        (299)  (7,900)   (8,199)     2,045
activities before taxation     
                                                                
Tax  on profit on ordinary          90      115       205     (1,175)
activities                             
Profit     on     ordinary        (209)  (7,785)   (7,994)       870
activities after taxation     
                                                                
Dividends     paid     and                                      (888)
proposed
                                                                
Retained (loss) profit            (209)  (7,785)   (7,994)       (18)
                                                                
                                                                
Consolidated Statement  of                       Period  Period
Total Recognised                                  ended   ended
Gains and Losses
                                                     2       4
                                               January January
                                                  2000    1999
                                                 £'000   £'000
Profit  for the  financial                      (7,994)    870
year                            
Gain   (loss)  on  foreign                        (830)    139
currency translation
                                                (8,824)  1,009
Balance Sheets                                                    
As at 2 January 2000                                              
                                                                   
                                    Group            Company
                                  2         4       2        4
                            January   January  January  January
                               2000       1999    2000     1999
                              £'000      £'000   £'000    £'000
                                                                  
Fixed assets                                                      
Tangible fixed assets         3,355      5,119       -        -
Investments                       1        893  28,346   34,489
                              3,356      6,012  28,346   34,489                
                                                
Current assets                                                    
Stock                         9,354     16,999       -        -
Debtors                      30,481     37,541   4,933   16,994
Cash  at bank  and  in        2,534      2,910       -        -
hand
                             42,369     57,450   4,933   16,994                
                                                  
Creditors:                                                        
Amounts  falling   due      (42,701)   (51,135) (6,540) (11,211)
within one year 
Net  current                   (333)     6,315  (1,609)   5,783
(liabilities) assets    
Total   assets    less        3,023     12,327  26,739   40,272
current liabilities
                                                                  
Creditors:                                                        
Amounts  falling   due       (3,840)    (7,621) (3,840)  (7,094)
after  more  than  one    
year
Provision for                     -     (1,004)      -   (1,004)
liabilities  and
charges
Net assets                     (817)     3,702  22,899   32,174
                                                                  
Capital and reserves                                              
Called-up        share        2,131      2,065   2,131    2,065
capital
Share premium                18,373     17,689  18,373   17,689
Other reserves              (21,321)   (16,052)  2,395   12,420
Equity   shareholders'         (817)     3,702  22,899   32,174
funds

Consolidated Cash  Flow                                
Statement
For  the Period Ended 2 January                                
2000                                      Period         Period
                                           ended          ended
                                       2 January      4 January
                                            2000           1999
                                           £'000          £'000
                                                               
Net  cash inflow from operating           10,246          2,828
activities
                                                               
Returns   on   investment   and           (1,494)        (1,815)
servicing of finance
Taxation                                    (726)        (3,031)
Capital expenditure                       (1,154)        (2,105)
Acquisitions and disposals                  (695)        (3,999)
Equity dividends paid                       (413)        (2,112)
Cash  inflow  (outflow)  before                                
use  of  liquid  resources  and            5,764        (10,234)
financing
Financing                                 (1,316)         6,207
Increase (decrease) in cash  in            4,448         (4,027)
the year
                                                                               
                                              
Reconciliation of net cash flow                                
to movement in net debt
                                                               
Increase (decrease) in cash  in            4,448         (4,027)
the year
Cash   outflow  (inflow)   from                                
decrease (increase) in debt
and lease financing                        1,316         (6,198)
Change  in  net debt  resulting            5,764        (10,225)
from cash flows
Mortgage   disposed   of   with              525              -
subsidiary undertaking
Translation difference                      (661)            86
Movement  in  net debt  in  the            5,628        (10,139)
year
Net debt at beginning of year            (18,125)        (7,986)
Net debt at end of year                  (12,497)       (18,125)


Notes

1) Basis of Preparation

The profit and loss account, balance sheet and cash flow have
been prepared on a basis consistent with that adopted in  the
statutory accounts for the period ended 4 January 1999.

2) Earnings per Share

Basic earnings per share have been calculated by reference to
the   loss  for  the  financial  year  of  £7,994,000   (1998
Profit:£870,000)  and to the weighted average  number  of  5p
ordinary  shares  in issue during the year of  41,464,214  (4
January  1999:  40,342,845). The fully diluted  earnings  per
share   is   based   on  42,633,026  and  49,708,838   shares
respectively.

3) Financial Information

The  financial information set out above does not  constitute
the  Group's statutory accounts within the meaning of section
240  of the Companies Act 1985. The condensed information for
the  period ended 4 January 1999 represents extracts from the
latest  statutory accounts which have been delivered  to  the
Registrar  of  Companies:  the report  of  the  auditors  was
unqualified and did not contain a statement under section 237
(2) or (3) of the Companies Act 1985.

4) 1999 Report and Accounts

The auditors have not reported on accounts for the year ended
2  January 2000, nor have any such accounts been delivered to
the  Registrar  of Companies.  The 1999 Report  and  Accounts
will  be  posted  to shareholders shortly. Additional  copies
will  be  available  from  the Company's  registered  office:
Datrontech   House,  Lutyens  Close,  Chineham,  Basingstoke,
Hants, RG24 8AH.


                                                                                                                                                                                                                                            

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