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Datrontech Group PLC (DTR)

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Thursday 28 September, 2000

Datrontech Group PLC

Interim Results

Datrontech Group PLC
28 Sep 2000

For Immediate Release


28 September 2000




                                                DATRONTECH GROUP PLC



         INTERIM RESULTS FOR THE SIX MONTHS ENDED 2 JULY 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


       Turnover £82.379m (1999: £105,807)



       Loss before tax of £1.100m (1999: Loss £3.428m)



       Basic Interim Loss per share of 2.0p (1999: Loss 6.7p)







Ray Way, Chairman of Datrontech Group said:



'The IT market has been depressed since the end of 1999 and, in particular,
during the period April to August 2000.  Reports from other companies engaged
in the market confirm this view.



Despite this, improvements in gross margin, together with substantial
reductions in cost, have already been achieved.



The management team under new Chief Executive John Lowry is determined that
these strengths will be converted into long term growth in sales and profits.'







Enquiries



Ray Way, Chairman              01256 360360

David Holloway, Finance Director

Datrontech Group



Tim Anderson

Suzanne Dunne

Buchanan Communications       020 7466 5000



















                                       CHAIRMAN'S STATEMENT



The IT market has been depressed since the end of 1999 and, in particular,
during the period April to August 2000.  Reports from other companies engaged
in the market confirm this view.  There have been some encouraging signs
recently but it is too early to judge whether there will be any sustained
recovery in demand during the last four months of the financial year.



The results for the reporting period are disappointing, consistent with the
market sector.  Despite this, improvements in gross margin, together with
substantial reductions in cost, have already been achieved, and further
re-organisation is planned to align the cost base to market demand.  We
continue to enjoy the support of our bankers, one of our major priorities
being to strengthen the balance sheet.  The Group's strategy continues to be
to concentrate on developing it's business in the provision of networking,
mobile computing and voice & data convergence technologies, whilst maintaining
a cost effective service in the supply of PC components.



Despite its disappointing performance, the Group has continuing good
relationships with its customers and suppliers.  The management team under new
Chief Executive John Lowry is determined that these strengths will be
converted into long term growth in sales and profits.



Raymond Way

Chairman
CONSOLIDATED PROFIT AND LOSS ACCOUNT


                                                   Period    Period    Period
                                                    ended     ended     ended
                                                   2 July    4 July   2 January
                                                    2000      1999      2000
                                                    £'000     £'000     £'000

Turnover
Continuing operations                                82,379   105,807   200,727
Discontinued operations                                   -     6,972     7,558
                                                     82,379   112,779   208,285

Cost of sales                                      (73,090) (101,308) (189,187)

Gross profit                                          9,289    11,471    19,098

Operating expenses                                  (9,909)  (13,089)  (23,873)

Operating loss
Continuing operations                                 (620)   (1,340)   (1,919)
Discontinued operations                                   -     (278)   (2,856)
                                                      (620)   (1,618)   (4,775)

Share of associate's operating profit                     -       156       156
Loss on disposal of subsidiary undertaking                -   (1,232)   (1,232)
Profit on disposal of associated undertakings           264       158       158
Loss on discontinued operations                           -         -     (965)

Loss before tax and interest                          (356)   (2,536)   (6,658)

Net interest payable                                  (744)     (892)   (1,541)

Loss on ordinary activities before taxation         (1,100)   (3,428)   (8,199)

Tax on loss on ordinary activities                      240       653       205

Loss on ordinary activities after taxation being      (860)   (2,775)   (7,994)
the loss for the period

Dividends paid and proposed                               -         -         -

Retained loss                                         (860)   (2,775)   (7,994)

Loss per share                                       (2.0p)    (6.7p)   (19.3p)

Dividends per share                                       -         -         -


CONSOLIDATED BALANCE SHEET


                                                2 July     4 July    2 January
                                                 2000       1999       2000
                                                £'000      £'000       £'000
Fixed assets
Tangible                                           3,148      4,250       3,355
Investments                                            -        126           1
                                                   3,148      4,376       3,356

Current assets
Stock                                             13,137     14,637       9,354
Debtors                                           26,164     34,444      30,481
Cash at bank                                       3,634      8,368       2,534
                                                  42,935     57,449      42,369

Creditors
Amounts falling due within one year             (43,918)   (51,189)    (42,702)

Net current (liabilities) assets                   (983)      6,260       (333)

Total assets less current liabilities              2,165     10,636       3,023

Creditors
Amounts falling due after more than one year     (3,840)    (7,047)     (3,840)

Net (liabilities) assets                         (1,675)      3,589       (817)


Capital and reserves
Called up share capital                            2,132      2,131       2,131
Share premium                                     18,373     18,373      18,373
Other reserves                                  (22,180)   (16,915)    (21,321)
Shareholders' funds                              (1,675)      3,589       (817)


CONSOLIDATED CASH FLOW STATEMENT


                                                    Period   Period   Period
                                                    ended    ended    ended
                                                    2 July   4 July     2
                                                                     January
                                                     2000     1999     2000
                                                    £'000    £'000    £'000

Net cash (outflow) inflow from operating            (2,104)    3,245   10,246
activities

Returns on investments and servicing of finance       (925)    (731)  (1,494)

Taxation                                                138    (412)    (726)

Capital expenditure                                   (564)    (893)  (1,154)

Acquisitions and disposals                            (411)    1,737    (695)

Equity dividends paid                                     -    (413)    (413)

Cash (outflow) inflow before use of liquid          (3,866)    2,533    5,764
resources and financing

Financing                                                 1      (2)  (1,316)

(Increase) decrease in overdraft in period          (3,865)    2,531    4,448

Reconciliation of net cash flow to movement in net
debt

(Decrease) increase in cash in the period           (3,865)    2,531    4,448

Cash (inflow) outflow from (increase) decrease in       (1)        2    1,316
debt  and lease financing

Change in net debt resulting from cash flows        (3,866)    2,533    5,764

Mortgage disposed of with subsidiary undertaking          -      525      525

Translational differences                              (27)    (484)    (662)

Movement in net debt                                (3,893)    2,574    5,627

Net debt at beginning of period                    (12,498) (18,125) (18,125)

Net debt at end of period                          (16,391) (15,551) (12,498)




Notes to the Interim Results



1.                   Accounting Policies



The unaudited accounts for the half-year have been prepared on a consistent
basis with the accounting policies disclosed in the Group's 1999 Annual
Report.



The financial information for the period ended 2 January 2000 has been
extracted from the statutory accounts for the period which have been delivered
to the Registrar of Companies and on which the auditors gave an unqualified
report.



The financial information contained in this statement does not constitute
statutory accounts within the meaning of section 240 of the Companies Act
1985.





2.                   Non-recurring Items



The accounts include the following non-recurring items:



i)                     The Group has written off £96,000 invested in
PortablePlace.com, a start up operation to develop an Application Service
Provider to mobile computing users.

ii)                   In February 2000 the Group sold its 45% interest in Van
Berkel Onderhoudstechniek B.V. (VBO), held by its wholly owned Dutch
subsidiary ICP B.V., to Ben-Jan Wilbrink, who is a Managing Director and the
former owner of ICP, resulting in a gain on disposal of £264,000.





3.                   Taxation



Taxation has been provided at an estimated effective rate of 31% on the result
before tax arising in the UK.  Estimated rates of taxation have also been
applied as appropriate to the results arising from the overseas subsidiaries.





4.                   Loss per share



The calculation of the loss per share is based on the loss for the period and
on the weighted average number of ordinary shares in issue in the period being
42,620,984 ordinary shares (1999: 41,629,581).



5.     Reconciliation of movements in shareholders' funds
                                             Period      Period      Period
                                              ended       ended       ended
                                             2 July      4 July     2 January
                                              2000        1999        2000
                                              £'000       £'000       £'000

Loss for the financial period                    (860)     (2,775)     (7,994)

Dividends paid and proposed                          -           -           -

Retained loss for the financial period           (860)     (2,775)     (7,994)

Gain (loss) on foreign exchange                      1       (603)       (830)
translation

New shares issued                                    1         750         750

Reduction in unissued share capital                  -     (2,102)     (2,102)

Adjustments to acquisitions from prior               -       2,016       2,091
periods

Add goodwill written back                            -       2,601       3,566

Net reductions in shareholders' funds            (858)       (113)     (4,519)

Opening shareholders' funds                      (817)       3,702       3,702
Closing shareholders' funds                    (1,675)       3,589       (817)





6.            Approval of Interim Report



This interim report was approved by a meeting of the board of directors held
on 28 September 2000.



A copy of this report is being sent to all shareholders.  Copies are available
to the public on request from the Company's registered office: Datrontech
House, Lutyens Close, Chineham, Basingstoke, Hampshire RG24 8AH.


INDEPENDENT REVIEW REPORT TO DATRONTECH GROUP PLC



Introduction

We have been instructed by the company to review the financial information set
out on pages 3 to 7 and we have read the other information contained in the
interim report and considered whether it contains any apparent misstatements
or material inconsistencies with the financial information.



Directors' responsibilities

The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors.   The
directors are responsible for preparing the interim report in accordance with
the Listing Rules of the Financial Services Authority and applicable United
Kingdom accounting standards.  The Listing Rules require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.



Review work performed

We conducted our review in accordance with guidance contained in Bulletin 1999
/4 issued in the United Kingdom by the Auditing Practices Board and with our
profession's ethical guidance. A review consists principally of making
enquiries of group management and applying analytical procedures to the
financial information and underlying financial data and, based thereon,
assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review excludes audit
procedures such as tests of controls and verification of assets, liabilities
and transactions. It is substantially less in scope than an audit performed in
accordance with Auditing Standards and therefore provides a lower level of
assurance than an audit. Accordingly we do not express an audit opinion on the
financial information.



Review conclusion

On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 2 July 2000.







Arthur Andersen

Chartered Accountants



Interim Statement for the period to 2 July 2000



Directors



Raymond Way

Non-Executive Chairman



Gerald Brown

Non-Executive Director



Robert Chris

Non-Executive Director



John Lowry

Chief Executive Officer (appointed 14 August 2000)



Allan Mack

Chief Operating Officer



David Holloway

Group Finance Director



Ian Boyle

Director



Raymond Peck

Chief Executive Officer (appointed 19 April 2000, resigned 19 September 2000)



Mark Mulford

Chief Executive Officer (resigned 25 April 2000)





Secretary

David Holloway (appointed 19 September 2000)



Dena Benzie (resigned 19 September 2000)



                                                                                
                   

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