LONDON (Alliance News) - CEPS PLC saw its shares jump Thursday after it reported higher profit and revenue for 2013, driven by a continued recovery at its direct mail business and as trading in the UK and some export markets began to improve.
The company, which aims to take stakes in steadily growing and profitable companies and help management drive further growth, reported a pretax profit of GBP261,000 for the year, more than double the GBP117,000 it reported in 2012, as revenue rose to GBP15.6 million, from GBP15.1 million.
Its current portfolio is body armour products company Davies Odell, Lycra importer Friedman's and direct mail and printing company Sunline Direct Mail. It has plans to acuire two to three new business a year from now on.
Sales at Friedman's grew to GBP3.9 million, from GBP3.7 million, while gross margin rose to 36.3%, from 34.7%, as it customised fabric using digital design and printing equipment, pushing up sales and margins. Earnings before interest, tax, depreciation and amortisation rose to GBP595,000, from GBP452,000.
CEPS said Sunline managed to sustain the operating improvement it had outlined at the half year, with sales up 11%, margin improving to 39.3%, from 35.8%, and Ebitda rising to GBP371,000, from GBP162,000 before impairment charges in 2012.
However, results at Davies Odell were disappointing, the company said, as sales faded badly in the final quarter and it became loss-making. For the year, sales fell to GBP5.5 million, from GBP5.7 million, while the cost base had been built up in expectation of increased activity. Gross margin fell to 33.9%, from 34.4%, and its posted an Ebitda loss of GBP69,000, compared with positive Ebitda of GBP163,000 in 2012.
"In January 2014 action was taken to reduce the cost base, improve the forecasting of forward sales and to inject more urgency into new product development and sales effort. A new laser cutter has been delivered, enabling expansion of profitable leather and ethylene-vinyl acetate cutting activities. The business will be monitored very closely for the expected improvements in 2014," CEPS said in its statement.
CEPS' own balance sheet improved, with net debt down to GBP1.7 million at the end of 2013, down from GBP1.8 million at the end of 2012.
"There is no doubt that the trading environment is improving both in the UK and our key markets. The outlook for the group should improve upon 2013 provided current momentum at Davies Odell can be sustained," Chairman Richard Organ said.
CEPS shares were up 40% at 35 pence Thursday, one of the biggest gains on the London market.
By Steve McGrath; stevemcgrath@alliancenews.com; @SteveMcGrath1
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Ceps (CEPS)