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8 Feb 2018 07:00
Elektron Technology plc
(AIM: EKT, "Elektron" or the "Group")
Trading update
Elektron Technology plc, the global technology group, is pleased to provide an update on trading for the financial year ended 31 January 2018.
Group Trading
Group revenue from continuing operations for the full year is expected to be approximately £30.5m (unaudited) a 10.9% increase compared with £27.5m (on a like for like basis) for the previous year, returning the business to growth. Trading in the second half of the year from continuing operations, was substantially stronger than the first half as a result of the conversion of Bulgin's strong H1 order book to sales revenue. Revenue from continuing operations in the second half was £16.6m (unaudited) compared with £13.9m (unaudited) in the first half. Underlying trading performance from continuing operations benefitted from the operational gearing effect of increased sales over the prior year, improved Bulgin margins and efficiency improvements.
Sales
Sales from continuing operations* £m | Unaudited | ||
FY 2018 | FY 2017 | % change | |
Bulgin | 27.3 | 24.1 | +13.3% |
IMC (Queensgate and Elektron Eye Technology) | 2.7 | 3.1 | -12.9% |
Checkit | 0.5 | 0.3 | +66.7% |
Total Sales | 30.5 | 27.5 | +10.9% |
* Excludes businesses disposed of during the year
Orders
Orders received in the year* £m | Unaudited | ||
FY 2018 | FY 2017 | % change | |
Bulgin | 29.3 | 25.7 | +14.0% |
IMC (Queensgate and Elektron Eye Technology) | 3.8 | 2.4 | +58.3% |
Total Orders | 33.1 | 28.1 | +17.8% |
*Checkit is excluded from the above table owing to its recurring revenue, subscription based model. Contracted recurring revenue (comprising already installed systems and those scheduled to be installed) as at 31 January 2018 was >£750k per annum (2017: £270k), an increase of 178%.
Bulgin
Bulgin ended the period with both sales and orders significantly ahead of the prior year. This was driven by the record level of sales made in the third quarter, however sales in the last quarter of the year returned to normalised levels. During the year Bulgin successfully launched its new "M-series" connector generating in excess of £500k of sales. Bulgin's fibre optic connector ranges are set for launch during the first half of this year.
IMC (Queensgate and Elektron Eye Technology ("EET"))
The sales decline in IMC was primarily due to destocking in EET in the early part of the year. Following a review of EET's commercial strategy, progress has been made in developing the EET global distribution channel. This is reflected in the full year order position which is significantly ahead of the prior year. During the year and as previously announced, EET acquired all IP relating to its product suite. EET also received notification from the US Food and Drug Administration (FDA) that the Henson 9000 is not subject to premarket registration under its clearance procedures thus paving the way for establishing a distribution network in the US.
Owing to the long term and unpredictable nature of the projects in which Queensgate operates, it was only able to deliver a modest increase in revenues. It does however start the new financial year with a significantly higher order book than a year ago.
Medical Service, a legacy element of the Agar Medical business which was closed in 2016 and was involved in servicing of medical devices, has now closed as planned. It was a marginal revenue and brand contributor to the Group and its revenues are no longer to be treated as part of continuing operations.
Checkit
Checkit continues to make progress with its real time operations management product suite. In particular, the adoption of Checkit has begun in two of the world's largest facilities management companies that employ over 1 million people between them. In addition, discussions are underway with several national and multi-national food service chains.
Cash
Group net cash was approximately £5.1m at 31 January 2018 (31 January 2017: £1.0m,) driven by a strong trading performance and the receipt of £1.9m cash proceeds from the Group's disposal process (namely Sheen Instruments, Digitron and Titman Tip Tools).
Outlook
The new financial year commenced with an order book in excess of £9m (unaudited) compared with £5.9m (unaudited) in the prior year.
The disposal programme has enabled management to focus solely on the businesses which the Board believes offer greatest potential for growth and realisation of significant shareholder value.
The Group plans to maintain its stated focus on new product development and expects to further invest during FY19 in order to continue to grow and maintain the momentum in the established and fledgling growth businesses.
John Wilson, Chief Executive Officer of Elektron, said:
"The business has delivered on its stated objective of returning the business to growth and starts the year with a strong order book. The Group is well positioned to continue to capitalise on the many opportunities available."
For further enquiries:
Elektron Technology plc | +44 (0) 1223 371 000 | |
www.elektron-technology.com | ||
John Wilson (Chief Executive Officer) | ||
Andrew Weatherstone (Chief Financial Officer & Company Secretary) | ||
N+1 Singer (Nominated Adviser & Broker) | ||
Shaun Dobson / Jen Boorer (Corporate Finance) | +44 (0) 20 7496 3000 | |
Michael Taylor (Corporate Broking) |
The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.
Notes to Editors:
Elektron conceives, designs and markets innovative products and services for business that connect, monitor and control. We have a multi skilled team of engineers, software and product line specialists based in Cambridge focused on the opportunities created by global growth in the following areas:
- Demand for ubiquitous power and data: Bulgin
- Real-time operations management using Internet of Things (IoT) technology: Checkit
- Screening for the effects of ageing on sight: Elektron Eye Technology
- High precision nano-scale manufacture: Queensgate
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