Avingtrans Regulatory News (AVG)

31 Jan 2005 07:00

Embargoed: 0700hrs 31 January 2005 Avingtrans plc Interim Results for the Six Months to 30 November 2004 Highlights Six months Six months Change to 30 November to 30 November 2004 2003 Turnover ‚£7,929,000 ‚£2,646,000 +200% EBITDA ‚£989,000 ‚£284,000 +248% Profit before tax ‚£559,000 ‚£125,000 +347% Earnings per share before goodwill 6.0p 2.1p +186% Diluted earnings per share before 6.0p 2.1p +186%goodwill Acquisition of Stainless Metalcraft (Chatteris) Limited for ‚£8.1 millionPlacing and open offer of 7.2 million shares at 60p raising ‚£4.3 millionSuccessful integration of Crown UK LimitedManagement team strengthenedKen Baker, Chairman, commented,"I am delighted to present to you results which record the highest levels oforder intake, turnover, profitability, net assets and earnings per share sinceAvingtrans' reformation in June 2002. All our divisions are trading to or aboveboard expectations. The projected continuing economic growth in both the USAand UK gives me confidence in the outcome for the full year."For Further information:AvingtransKen Baker, ChairmanSteve Lawrence, Managing DirectorStephen King, Finance Director01159 499 020HansardBen Simons020 7245 1100Chairman's StatementI am pleased to announce the results of Avingtrans plc for the six monthsending 30 November 2004.The period was dominated by the acquisition of Stainless Metalcraft (Chatteris)Limited (SMC) on 13 October 2004 for ‚£8.1 million and the integration of CrownUK Limited (Crown) acquired on 28 May 2004, the last operating day of theprevious financial period, for ‚£1.56 million. The existing operations of theJena Group (Jena) and C&H Precision Limited (C&H) experienced a significantincrease in activity and performance during the period. This together with thecontributions from SMC and Crown enabled the Company to record its highestlevels of order intake, turnover, profitability, net assets and earnings pershare since its reformation in June 2002.Financial performanceFor the six months ended 30 November 2004 earnings before interest, tax,depreciation and goodwill amortisation (EBITDA) was ‚£989,000 (2003: ‚£284,000)an increase of 248% on turnover of ‚£7,929,000 (2003: ‚£2,646,000) an increaseof 200%.Operating Profit for the period was ‚£676,000 (2003: ‚£146,000) an increase of363%. Profit before taxation for the period was ‚£559,000 (2003: ‚£125,000) anincrease of 347%.The Company had a positive cash flow from operations during the period of ‚£1,384,000 (2003: ‚£19,000) as a result of increased EBITDA and working capitalchanges related to the acquisitions of Crown and SMC. At 30 November 2004 theCompany recorded cash balances at bank or in hand of ‚£672,000.As a result of the recent acquisitions gearing at 30 November 2004 was 55%.An exchange rate gain of ‚£64,000 (2003: loss ‚£61,000) was recorded through thereserves in the six months period under review.Earnings per shareEarnings per share, for the period ended 30 November 2004, before goodwillamortisation was 6.0p (2003: 2.1p) a 186% increase. Earnings per share aftergoodwill amortisation and full dilution was 4.8p (2003: 1.6p) an increase of200%. DividendThe Board is not recommending a dividend for the half year. Dividend paymentswill be reviewed again with the publication of the full year results inconsultation with our banking partners.Six months reviewThe uplift in business activity at Jena and C&H reported in the 2004 annualreport continued throughout the six months under review. Order intake and salesat Jena, through its operations in Germany the UK and USA, increased by 32% and23% respectively over the same period in 2003. This was due to a return ofprevious customers and continuing growth in the miniature recirculatingballscrew products and service activities. Development of new markets continuein particular through the upgrade of spindle manufacturing and testingequipment at the Sherwood Park facility, Nottinghamshire. Strong product salesin the USA required a constant review of pricing caused by the weakening valueof the US dollar against the Euro and the Pound Sterling.C&H sales grew by 85% over the same period in 2003 due to the continuedincrease in turbine blade finishing and repair activity in the aerospace andland based turbine industries. New business continued to be attracted by theplate-grinding machine installed last year and other sales initiatives.Crown, acquired 28 May 2004, completed its corporate integration and first sixmonths of trading with Avingtrans. Sales of stands and housings for roadsidespeed cameras were inline with management expectations for the period andshowed an increased level of service and maintenance work on the installed UKbase of over 5,500 units. The new management team has worked on cost reductionand business development of roadside speed camera post sales in North Americaand continental Europe where new opportunities have been identified and wherewe believe the market can be developed. During the period, Network Railawarded accreditation to Crown's newly developed trackside signal post whichpartners Crown's existing gantry mounted signal post. A number of enquiries onsignal equipment for the UK programme of railway upgrading are being processedwith further interest from overseas, these will take sometime to develop.SMC was acquired on 13 October 2004 with the corporate integration processcontinuing throughout the remainder of the period. Sales and order intake atSMC were above expectations for the seven weeks of Avingtrans ownership. Priorto the acquisition a number of major clients were visited and investment andcapacity growth plans were discussed. In light of the continuing increasedlevel of orders for MRI scanner components the Company has initiated capitalexpenditure on production enhancing machinery and robot welding equipment.Avingtrans welcomes SMC and looks forward to future developments.Directors and senior managementThere was no change in the composition of the board of directors in the period.The Board welcomes Michael James as Commercial and Financial Controller forAvingtrans, Paul Ward the new Managing Director of Jena, Ian Woodbury theManaging Director of Crown and Peter Kenny the Managing Director of SMC andtheir respective teams.AcquisitionsThe Company worked on a number of acquisition opportunities during the periodunder review. The acquisition of SMC for ‚£8.1 million was completed on 13October 2004.Funding was organised and underwritten by Bridgewell Limited andconsisted of a placing to existing and new institutional investors at 60p pershare of 6,666,667 ordinary shares to raise ‚£4 million, a one for ten limitedopen offer to existing shareholders to raise ‚£327,000 and bank lending of ‚£4.3million from HSBC. In all ‚£8.6 million was raised, all of which was applied tothe purchase of SMC, the payment of acquisition expenses and new workingcapital.Current Trading and ProspectsAll divisions of the Company are continuing to trade to or above the Boardsexpectations with the increased activity level continuing at C&H and Jena andSMC developing strong forward order books. Some softening in the UK market forroadside speed camera poles is forecast but sales opportunities continue forCrown's existing and new products in other markets. Of particular interest willbe the introduction of digital cameras scheduled for mid 2005 and theresumption of signal upgrading work on the UK west coast line.MRI scanner installations continue to increase world wide and SMC remain wellplaced to supply critical components in this field. Other opportunities for thesupply of specialist components continue to be developed in partnership withthe EU scientific and research communities.Increased USA and renewed German demand for re-circulating ballscrews andmachine spindles is a feature of the order book at Jena. Service activitiescontinue to be developed for new and existing markets.Work continues across the Company on maintaining margins in the presence of aweak US dollar and the general increase in raw material costs.The trading outlook for the full year remains positive reflecting the projectedcontinuing economic growth in the USA and UK.K.M.BakerChairman31 January 2005Consolidated Profit and Loss Account Note 6 mths to 6 mths to 12 mths to 30 Nov 2004 30 Nov 2003 31 May 2004 Unaudited Unaudited Audited ‚£'000 ‚£'000 ‚£'000 Turnover Current period acquisitions 3,549 - - Continuing operations 4,380 2,646 5,533 Group turnover 7,929 2,646 5,533 Operating profit before amortisation Current period acquisitions 465 - - Continuing operations 310 184 268 Amortisation of goodwill (99) (38) (81) Group operating profit 676 146 187 Profit on ordinary activities before 676 146 187interest Net interest payable and similar (117) (21) (47)charges Profit on ordinary activities before 559 125 140taxation Tax on profit on ordinary activities 3 (177) (15) 1 Retained profit for the period 382 110 141 Earnings per share 4 Basic 4.8p 1.6p 2.0p Basic - before goodwill amortisation 6.0p 2.1p 3.1p Diluted 4.8p 1.6p 2.0p Diluted - before goodwill amortisation 6.0p 2.1p 3.1p Statement of Total Recognised Gains and Losses 6 mths to 30 Nov 6 mths to 30 Nov 12 mths to 31 2004 2003 May 2004 Unaudited Unaudited Audited ‚£'000 ‚£'000 ‚£'000 Profit for the financial 382 110 141period Other recognised gains and losses Currency translation gain/ 64 (61) (163)(losses) Total recognised gains/ 446 49 (22)loss relating to the period Summarised Consolidated Balance Sheet At 30 Nov At 30 Nov At 31 May 2004 2003 2004 Unaudited Unaudited Audited ‚£'000 ‚£'000 ‚£'000 Fixed assets Intangible assets 6,951 1,556 2,625 Tangible assets 4,997 1,868 1,791 Investments 59 59 59 12,007 3,483 4,475 Current assets Stocks 4,323 1,676 1,908 Debtors due within one year 5,627 1,041 1,593 Cash at bank and in hand 672 475 687 10,622 3,192 4,188 Creditors: Amounts falling due within one (9,191) (1,353) (2,544)year Net current assets 1,431 1,839 1,644 Total assets less current liabilities 13,438 5,322 6,119 Creditors: Amounts falling due after more (3,783) (493) (1,358)than one year Provisions for liabilities and charges (307) - (3) Net assets 9,348 4,829 4,758 Capital and reserves Called up share capital 713 352 352 Share premium account 3,784 - - Capital redemption reserve 813 813 813 Other reserves 180 180 180 Profit and loss account 3,858 3,484 3,413 Equity shareholders' funds 9,348 4,829 4,758 Consolidated Cash Flow Statement 6 mths to 6 mths to 12 mths to 30 Nov 30 Nov 31 May 2004 2003 2004 Unaudited Unaudited Audited ‚£'000 ‚£'000 ‚£'000 Net cash inflow from operating 1,384 19 196activities Returns on investment and servicing of finance Net interest (119) (16) (47) Net cash outflow from returns on (119) (16) (47)investment and servicing of finance Taxation (paid)/ repaid (162) 32 31 Capital expenditure and financial investment Purchase of fixed assets (96) (154) (194) Sale of fixed assets 5 - - Purchase of fixed asset investments - - - Net cash outflow from capital (91) (154) (194)expenditure and financial investment Acquisitions and disposals Purchase of subsidiary undertakings (8,035) - (1,652) Net cash acquired with subsidiaries 5 - 256 Purchase of unincorporated business - (346) (466) Net cash outflow from acquisitions and (8,030) (346) (1,862)disposals Equity dividends - - - Financing Issue of share capital 4,144 - - New Loans 2,895 - 1,749 Repayment of loan capital (722) - - Capital element of finance lease (130) (95) (205)payments Net cash inflow/(outflow) from 6,187 (95) 1,544financing Decrease in cash (831) (560) (332) Reconciliation of Operating Profit to Net Cash Flow from Operating Activities 6 mths to 6 mths to 30 12 mths to 31 30 Nov Nov May 2004 2003 2004 ‚£'000 ‚£'000 ‚£'000 Operating profit 676 146 187 Amortisation of intangible assets 99 38 263and goodwill Depreciation of tangible fixed 214 100 81assets Profit on disposal of tangible (2) - -fixed assets Increase in stocks (303) (156) (237) Increase in debtors (1,132) (181) (246) Increase in creditors 1,832 72 148 Net cash inflow from operating 1,384 19 196activities NOTES1. This interim report was neither audited nor reviewed by theauditors. It was approved by the Board on 27 January 2005. It has beenprepared using accounting policies that are consistent with those adopted inthe statutory accounts for the year ended 31 May 2004. The figures for the year to 31 May 2004 were derived from thestatutory accounts for that year. The statutory accounts for the year ended 31May 2004 have been delivered to the Registrar of Companies and received anaudit report which was unqualified and did not contain statements under s237(2)or (3) of the Companies Act 1985.2. This statement is being sent to shareholders of the Company and willbe available at the Company's Registered Office.3. The taxation charge is based upon the expected rate for the yearended 31 May 2005.4. Earnings per share has been calculated using the weighted averagenumber of 7,998,268 Ordinary Shares in issue during the period (2003:7,049,804) (Audited 2004: 7,049,804).5. Capitalised goodwill amounting to ‚£4,399,000 arising from thepurchase of Stainless Metalcraft (Chatteris) Limited is being amortised overtwenty years on a straight line basis. Goodwill has been calculated on bookvalue pending a final review of the fair value of assets acquired during theperiod.6.Analysis of Net Debt 1 June Cash Acquisition Inception of Exchange 30 Nov 2004 flow subsidiary loans and movement 2004 excluding cash and finance lease overdraft ‚£,000 ‚£,000 ‚£,000 ‚£,000 ‚£,000 ‚£,000 Cash at 687 (22) 5 - 2 672bank and in hand Bank (170) (814) - - (16) (1,000)Overdraft Cash 517 (836) 5 - (14) (328) Debt (1,749) 722 - (2,895) - (3,922) Hire (508) 130 (463) (7) (16) (864)purchase leases (2,257) 852 (463) (2,902) (16) (4,786) Net debt (1,740) 16 (458) (2,902) (30) (5,114) 7. Reconciliation of movements in Shareholders' Funds 6 mths to 30 Nov 6 mths to 30 Nov 12 mths to 31 May 2004 Unaudited 2003 Unaudited 2004 Audited ‚£'000 ‚£'000 ‚£'000 Profit for the financial period 382 110 141 Other recognised gains and 64 (61) (163)losses relating to the period Proceeds of share issue 4,144 - - Increase in shareholders' funds 4,590 49 (22) Opening shareholders' funds 4,758 4,780 4,780 Closing shareholders' funds 9,348 4,829 4,758 END