Half year extract17 Jun 2013 12:23
It has been a difficult six months for the Group after the record performance last year. Group turnover was down 17% at £21.6 million (2012: £26.0 million) and profit before tax fell 41% to £1.7 million (2012: £2.9 million). Operating profit before exceptional items dropped 32% to £1.8 million (2012: £2.6 million). Earnings per share fell 41% to 14.4p (2012: 24.2p). However the Group balance sheet remains strong and we have paid £1.8 million for our 70% acquisition of Dual Engraving yet still have net cash of £8.1 million.
The biggest drop in sales was in the Keypad division, which was expected. The most significant reason for the decrease is as a result of a major customer's change in product content. Essentially a significant component that was previously added to both our costs and revenues has been removed from our remit. Lift division sales have fallen principally in the UK and Europe, where confidence seems most fragile. However sales have been weak in almost all areas other than North America. The Transport division has also seen a significant fall in sales with cutbacks in local authority and central government spending really starting to bite this year. We are looking at the structure of our Transport businesses to more closely align them to current levels of demand.
OUTLOOK
Sales are currently at a disappointing level and there is no sign of short term improvement. Nevertheless confidence is improving in some markets albeit slowly and fitfully. Customers suggest that there are projects coming, but their timing is uncertain and we do not expect them to impact this financial year. We have introduced some new products for the lift market which have been well received by customers, but it will take time for these products to filter through the project chain to orders.
Dual Engraving, our acquisition in Perth, Western Australia (WA) is currently performing within management expectations. Although there is talk of the Australian economy facing a more difficult period, there are a good number of committed projects in WA that should help the company prosper in the short to medium term. However, the amortisation of intangible assets capitalised on the acquisition of Dual Engraving will impact on its immediate contribution to the Group's profit.
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