28 Apr 2009 07:00
| Date: | 28 April 2009 |
| On behalf of: | Advanced Power Components plc ("APC" or "the Company") |
| Embargoed until: | 0700hrs |
Advanced Power Components plc
Interim results for the six months ended 28 February 2009
Advanced Power Components plc (AIM: APC), a specialist distributor and manufacturers' representative of electronic components, is pleased to announce its interim results for the six months ended 28 February 2009.
Highlights:
Revenues increased 44% to £6.8 million (H1 2008: £4.7 million)
Pre-tax loss of £281,000 (H1 2008: £270,000 profit), decrease principally due to foreign exchange losses
Hedging policy implemented to avoid future foreign exchange losses
Working capital strengthened by £400,000 issue of convertible loan stock
Strong underlying performance and order book at record levels
Commenting on the results, Mark Robinson, Chief Executive of APC, said:
"Wider market conditions have resulted in a difficult six months, with foreign exchange issues being the principal cause of a pre-tax loss for the period. Nevertheless, underlying trading in several of the Company's business units has remained strong; we have maintained or even improved our market share; and we continue to develop new parts of the business, such as APC KVAR, where initial trials and feedback have been promising. All of this leads us to remain cautiously optimistic about the future."
Enquiries:
| Advanced Power Components plc | 01634 290588 |
| Mark Robinson, Chief Executive Officer | www.apc-plc.co.uk |
| Redleaf Communications | 020 7566 6700 |
| Samantha Robbins/ Anna Dunkin/ Henry Columbine | apc@redleafpr.com |
| Strand Partners | 020 7409 3494 |
| James Harris/ Angela Peace | |
| St Helen's Capital | 020 7628 5582 |
| Ruari McGirr |
Chairman's Statement
I am pleased to present the interim report for Advanced Power Components for the six month period ended 28 February 2009
During the period, revenues increased 44% over the corresponding period in 2008 to £6.8 million (2008: £4.7 million), reflecting the impact of acquisitions made by the Company in the second half of the last financial year. However, at a pre-tax level, in line with the trading statement made on 11 March 2009, we have incurred a loss of £281,000, which compares with a profit of £270,000 in the first half of last year.
The loss is attributable to a number of factors.
As previously announced, the magnitude and speed of the decline in the value of sterling against, principally, the US dollar, in which a significant proportion of the Group's costs are incurred, resulted in an exchange loss of approximately £300,000. To mitigate future risk in this area we have now taken steps to hedge our foreign currency exposures going forward. In addition, we have bolstered our working capital by £400,000 through the issue of convertible loan stock during the period and continue to review our management information systems to ensure that our systems and processes are adequate for the rapidly changing business environment.
Additional operating costs incurred during the period were associated with decisions taken during the second half of the last financial year to facilitate the Company's continued growth, including a strengthening of the Company's management team and the development of new areas of revenue generating activities. Whilst these costs have had a negative effect on the results for the period under review the Board remains satisfied that ongoing investment in these areas remains in the best long term interests of the Company.
Finally, some areas of our activities, specifically those related to general industrial applications, have experienced poor trading conditions resulting from the wider economic downturn. Although we can report certain key areas of our business continue to perform well they have not been able to fully offset the performance in the other areas and sales overall were below our expectations as a result. Notwithstanding this, order intake remains strong in the defence and aerospace sectors.
Whilst we believe that we are maintaining, or even improving our overall market share, the scale of events unfolding in the wider economy has made short term business very uncertain, although continued strong order intake and the specialist nature of our products make us cautiously optimistic for the future.
Will David
Chairman
28 April 2009
CONDENSED CONSOLIDATED INCOME STATEMENT
| Half year to 28 February 2009 | Half year to 29 February 2008 | Year to 31 August 2008 | ||
| (unaudited) | (unaudited) | (audited) | ||
| Note | £000 | £000 | £000 | |
| Revenue | 2 | 6,772 | 4,700 | 12,164 |
| Cost of sales | (4,618) | (3,014) | (8,128) | |
| Gross profit | 2,154 | 1,686 | 4,036 | |
| Administration expenses | (2,381) | (1,378) | (3,228) | |
| Operating (loss)/profit | (227) | 308 | 808 | |
| Finance costs | (54) | (38) | (76) | |
| (Loss)/profit before taxation | (281) | 270 | 732 | |
| Taxation expense | - | - | (26) | |
| (Loss)/profit for the period | (281) | 270 | 706 | |
| The results all relate to continuing operations | ||||
| The Group has no recognised gains or losses other than those included in the profit and loss account. | ||||
| (Loss)/earnings per share | (1.3p) | 1.3p | 3.4p | |
| Diluted (loss)/earnings per share | (1.2p) | 1.3p | 3.1p | |
| Earnings per share is based on the weighted average | ||||
| number of shares in issue in the respective periods, | ||||
| as follows : | 22,324,257 | 20,157,361 | 20,735,186 | |
| There were 22,324,257 shares in issue at 28 February 2009. | ||||
CONDENSED CONSOLIDATED BALANCE SHEET
| 28 February 2009 | 29 February 2008 | 31 August 2008 | ||
| (unaudited) | (unaudited) | (audited) | ||
| Note | £000 | £000 | £000 | |
| Non current assets | ||||
| Intangible assets - goodwill | 2,736 | 808 | 2,719 | |
| Property, plant and equipment | 343 | 260 | 347 | |
| 3,079 | 1,068 | 3,066 | ||
| Current assets | ||||
| Inventories | 1,815 | 1,028 | 1,298 | |
| Trade and other receivables | 3,025 | 2,166 | 2,248 | |
| Cash and cash equivalents | 3 | 508 | 324 | 1,118 |
| 5,348 | 3,518 | 4,664 | ||
| Current liabilities | ||||
| Trade and other payables | (5,527) | (2,607) | (4,796) | |
| (5,527) | (2,607) | (4,796) | ||
| Net current (liabilities)/assets | (179) | 911 | (132) | |
| Non-current liabilities | (300) | - | (83) | |
| Net assets | 2,600 | 1,979 | 2,851 | |
| Equity attributable to equityholders of the company | ||||
| Called up share capital | 446 | 404 | 446 | |
| Share premium account | 336 | 5 | 336 | |
| Share option valuation reserve | 177 | 84 | 147 | |
| Retained earnings | 1,641 | 1,486 | 1,922 | |
| Total equity | 2,600 | 1,979 | 2,851 | |
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
| Share capital | Share premium account | Share option valuation reserve | Retained earnings | Total | |
| £000 | £000 | £000 | £000 | £000 | |
| Balance at 1 September 2007 | 403 | - | 63 | 1,216 | 1,682 |
| Profit for the period | - | - | - | 270 | 270 |
| Total recognised income and expense | 403 | - | 63 | 1,486 | 1,952 |
| Issue of new shares | 1 | 5 | - | - | 6 |
| Share option charge | - | - | 21 | - | 21 |
| Balance at 29 February 2008 | 404 | 5 | 84 | 1,486 | 1,979 |
| Balance at 1 September 2008 | 446 | 336 | 147 | 1,922 | 2,851 |
| Loss for the period | - | - | - | (281) | (281) |
| Total recognised income and expense | 446 | 336 | 147 | 1,641 | 2,570 |
| Share option charge | - | - | 30 | - | 30 |
| Balance at 28 February 2009 | 446 | 336 | 177 | 1,641 | 2,600 |
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
| Half year to 28 February 2009 | Half year to 29 February 2008 | Year to 31 August 2008 | ||
| (unaudited) | (unaudited) | (audited) | ||
| £000 | £000 | £000 | ||
| Net cash (outflow)/inflow from operating activities | (1,395) | 306 | 1,660 | |
| Finance costs | (54) | (38) | (76) | |
| Taxation | (44) | - | (16) | |
| Net cash (used in)/from operating activities | (1,493) | 268 | 1,568 | |
| Acquisition of subsidiary undertakings net of cash acquired | (592) | - | (659) | |
| Purchase of property, plant and equipment | (60) | (57) | (109) | |
| Sale of property, plant and equipment | 2 | - | 1 | |
| Net cash used in investing activities | (650) | (57) | (767) | |
| Issue of shares | - | 6 | 380 | |
| Issue of Convertible Loan Notes | 300 | - | - | |
| Bank short-term loan facility | 1,455 | (574) | (1,147) | |
| Repayment of finance lease | - | (1) | (3) | |
| Net cash from/(used in) financing activities | 1,755 | (569) | (770) | |
| (Decrease)/increase in net cash | (388) | (358) | 31 | |
| Reconciliation of operating (loss)/profit to cash inflow/(outflow) from operating activities | ||||
| Operating (loss)/profit | (227) | 308 | 808 | |
| Depreciation of property, plant and equipment | 62 | 46 | 91 | |
| Profit on disposal of property, plant and equipment | - | - | (8) | |
| Share option valuation charge | 30 | 21 | 84 | |
| (Increase)/decrease in inventories | (517) | 66 | (131) | |
| (Increase)/decrease in trade and other receivables | (777) | 266 | 709 | |
| Increase/(Decrease) in trade and other payables | 34 | (401) | 107 | |
| Net cash (outflow)/inflow from operating activities | (1,395) | 306 | 1,660 | |
NOTES TO THE INTERIM REPORT
1. Basis of preparation and accounting policies
These condensed interim financial statements have been prepared in accordance with the accounting policies set out in the Company's 2008 annual report and were approved by the Board of Directors on 24 April 2009. They have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union. They do not include all the information and disclosures in the annual financial statements and should be read in conjunction with the Group's annual financial statements as at 31 August 2008.
The financial information in these financial statements does not constitute statutory financial statements as defined in section 240 of the Companies Act 1985. The Group's annual report for the year ended 31 August 2008 has been filed with the Registrar of Companies and the auditor's report on those financial statements was not qualified and did not contain statements made under section 237(2) or sections 237(3) of the Companies Act 1985.
These interim financial statements have not been reviewed or audited by the Group's auditors.
2. Segmental information
The majority of the Group's activity arises in the United Kingdom from the supply and distribution of electronic components. Consequently the Group has one business and one business segment.
3. Analysis of net funds
| Half year ended 28 February 2009 | Half year ended 29 February 2008 | Year ended 31 August 2008 | |
| (unaudited) | (unaudited) | (audited) | |
| £000 | £000 | £000 | |
| Cash, comprising current accounts and overnight deposits | 508 | 324 | 1,118 |
| Overdraft facility | (183) | - | (405) |
| Bank short-term loan facility | (1,767) | (885) | (312) |
| Finance lease | (9) | (11) | (9) |
| (1,451) | (572) | 392 |
4. Distribution of interim report
A copy of this interim report will be distributed to all shareholders. Additional copies are available on application to the Company's registered office: Advanced Power Components plc, 47 Riverside, Medway City Estate, Rochester, Kent, ME2 4DP.
The report may also be viewed on the Company's website: www.apc-plc.co.uk