Elecosoft Regulatory News (ELCO)

11 Oct 2005 07:00

Eleco PLC11 October 2005 For release 11 October 2005 ELECO PLC The Building Systems and Construction Software Group PRELIMINARY RESULTS for Year ended 30 June 2005 Enquiries:Eleco plc Tel: 01920 443 830John Ketteley, Executive Chairman john@ketteley.comDavid Dannhauser, Finance Director mail@eleco.com Binns & Co PR Tel: 020 7786 9600Tarquin Edwards 07879 458 364 "An Excellent Performance" HighlightsFinancial • Turnover increased by 7.3 % to £48,018,000 (2004: £44,762,000) • Operating profit grew strongly by 21.6 % to £2,637,000 (2004: £2,169,000) • Profit before tax rose by 144.3 % to £2,287,000 (2004: £936,000) • EPS, adjusting for the post-tax losses of discontinued operations, was 4.5p (2004: 2.8p) • Positive operating cash flow again this year saw gearing eliminated Operational • Building Systems continue to make excellent progress across most divisions • Construction Software moving forward steadily John Ketteley, Executive Chairman of Eleco plc, commented re: Outlook: "The Group has made a good start to the year and performance for the firstquarter is ahead of the same period the previous year. The outlook in some of our markets, particularly in the UK, is more uncertainthan it has been for some time and there are some signs that demand may beweakening in some sectors of the construction industry. That said, builders areincreasingly employing building systems that make use of offsite manufacturedproducts, supported by effective software technologies and Eleco is well placedto provide such systems. With its strong financial position, good cashgeneration and the benefit to be gained from our continuing investment in newbuilding systems and software, I have every confidence in the future of theEleco Group". Chairman's Statement I am pleased to present my statement for the year ended 30 June 2005 and theoutlook for the current year. Group turnover for the year was £48,018,000 (2004: £44,762,000), an increase of7.3 per cent. Group operating profit for the year amounted to £2,637,000 (2004: £2,169,000),an increase of 21.6 per cent. Profit on ordinary activities before tax amountedto £2,287,000 (2004: £936,000) after net interest payable of £226,000 (2004:£237,000). Group profit for the year after tax was £2,056,000 (2004: £311,000), equivalentto 4.2p per share (2004: 0.6p per share). Earnings per share of continuingoperations, adjusting for the post-tax losses of discontinued operations,amounted to 4.5p (2004: 2.8p). The low tax charge for the year reflects thebenefit from utilising brought forward losses for which no deferred tax assetwas previously recognized. The above results were achieved after £1,254,000 (2004: £964,000) expenditure onresearch and development. I consider it a creditable achievement for Eleco tohave been included in the Department of Trade and Industry list of the top 700UK companies for investment in research and development. Operating cash flow was again pleasingly strong in the year. As a consequence,gearing was eliminated. Net funds in hand at 30 June 2005 amounted to £176,000compared with total net borrowings at 30 June 2004 of £310,000. All the above performance measures are most encouraging. Dividend Having regard to the strong performance of your company over the past year, theBoard has proposed an increased final dividend of 1.00p per share (2004:0.875p), which, subject to approval by shareholders, will be paid on 9 December2005 to shareholders on the Register on 25 November 2005. The proposed finaldividend, together with the interim dividend of 0.4p would result in the paymentof total dividends for the year totaling 1.40p per share (2004: 1.25p), anincrease of 12.0 per cent. OPERATING REVIEWBuilding Systems Overall, the Building Systems operations made excellent progress during theyear. Turnover increased by 5.7 per cent to £42,333,000 (2004: £40,040,000).Operating profit increased by 8.5 per cent. to £3,725,000 (2004: £3,433,000). Precast Concrete As anticipated in my interim statement, Bell & Webster Concrete's performancewas adversely affected by the disruption caused by delays to the LancasterUniversity student accommodation project that resulted from the replacement ofthe main contractor. However, a new sub-contract for Phase III of the projectwas agreed with the new main contractor, Norwest Holst. Bell & Webster is experiencing continuing firm interest in its FastBuild Roomsfor hotel and student accommodation. Demand for terracing, retaining walls andground beam products continues at reasonable levels. Roofing, and Cladding and Panels The Roofing and Cladding businesses produced mixed performances in a difficultmarket environment. Lower profits of SpeedDeck Building Systems were compensatedby good profits from Prompt Profiles and Downer Cladding. SpeedDeck BuildingSystems' sales in the final quarter were adversely affected by on the site of amajor roofing project at Rothley Park. The newly completed SpeedDeck(R) Designer 3 has now been distributed to ourcustomers as well as to other interested parties. This roofing design andspecification software tool, which is capable of demonstrating the technicalfeatures of projects in a 3D format, has received excellent reviews in the tradepress. Eleco Timber Frame was established in Speke at the beginning of the year tomanufacture a patented, engineered timber wall framing system principally usedin the housing sector and I am pleased to report it made a profit in its firstyear. Eleco Timber Frame is also a manufacturer of Ecojoist(R), our metal webfloor joist product. Demand for these products has been such that we haverecently established a second production unit in Speke and are currently settingup another manufacturing unit at Yaxley to complement the operations at Speke.The expansion of Eleco Timber Frame is being facilitated by the use of enhanceddesign software, developed by Eleco Software and M@trix enterprise managementsoftware, developed by Gang-Nail Systems. Stramit Industries again made a loss as sales of plasterboard partition panelsremained depressed. Sales of Elecofloor(R) acoustic flooring products showed auseful increase. Timber Engineering Systems All the timber engineering systems businesses performed well in the year underreview. Gang-Nail Systems had another excellent year making a higher contribution toGroup profits despite the impact of higher steel prices. Its results benefitedfrom a significantly increased volume of orders for nail plates from ElecoBauprodukte, which continued to improve its market share in Germany and whichmade a useful contribution to profits compared with a small loss in the previousyear. International Truss Systems delivered another outstanding performance despitehigher steel prices. It has now introduced GN Roof and Truss Windows(R) basedsoftware to its customers in South Africa to replace the original DOS baseddesign and engineering software. The new program was very well received. Construction Software Turnover of our continuing Construction Software operations increased by 28.6per cent. to £5,503,000 (2004: £4,280,000). The operating loss from theseactivities was marginally lower at £1,033,000 (2004: £1,072000). It should benoted that major new licensing and distribution agreements were agreed duringthe latter part of the year under review, from which benefits will flow infuture periods. We continued to make progress in co-coordinating software development andmarketing activities during the year. Fully expensed spending on softwaredevelopment and enhancement rose to £835,000 in the year under review from£550,000 in 2004. Consultec Sweden produced higher profits for the year whereas Eleco Software inthe UK and in Germany were again loss making, due in part to the incidence ofthe fully expensed cost of their respective software development programmes. In October 2005 we acquired Esign GmbH, a developer of specialised software forthe floor coverings market. Esign has already made a significant impact in theGerman market with its catalogue management and visualisation software and itsproducts have started to penetrate international markets. Management and Employees I would like on your behalf to thank all our employees for their efforts duringthe year and their contribution to the achievement of these results. Herman Scopes, who was appointed to the Board in 1998, will be retiring at theAnnual General Meeting. I would like to thank him for his wise counsel andcontribution to the Group's affairs. Outlook The Group has made a good start to the year and performance for the firstquarter is ahead of the same period the previous year. The outlook in some of our markets, particularly in the UK, is more uncertainthan it has been for some time and there are some signs that demand may beweakening in some sectors of the construction industry. That said, builders areincreasingly employing building systems that make use of offsite manufacturedproducts, supported by effective software technologies and Eleco is well placedto provide such systems. With its strong financial position, good cashgeneration and the benefit to be gained from our continuing investment in newbuilding systems and software, I have every confidence in the future of theEleco Group. John KetteleyEXECUTIVE CHAIRMAN11 October 2005 Eleco plc Consolidated Profit and Loss Account (Unaudited) For the year ended 30 June 2005 Notes 2005 2004 £'000 £'000Turnover Continuing operations 3 47,836 44,320 Discontinued operations 182 442Turnover 48,018 44,762 Operating profit Continuing operations 3 2,692 2,361 Discontinued operations 3 (55) (192)Operating profit 2,637 2,169 Loss on termination of discontinued operations (124) (996) Profit on ordinary activities before interest 2,513 1,173Net interest payable (226) (237)Profit on ordinary activities before taxation 2,287 936 Taxation (231) (625) Profit for the financial year 2,056 311 Dividends 4 (682) (611) Retained profit/(loss) 1,374 (300) Dividends per share 4 1.4p 1.25p Basic earnings per ordinary 10p share 5 4.2p 0.6p Diluted earnings per ordinary 10p share 5 4.2p 0.6p Reconciliation of Movement in Equity Shareholders' Funds(Unaudited)for the year ended 30 June 2005 2005 2004 £'000 £'000 Profit for the financial year as reported 2,056 311 Other recognised profits relating to the year (78) 47LTIP expense 203 175 Increase in own shares held by ESOT - (45) Dividends (682) (611) Proceeds from issue of ordinary shares 3 68Net increase in equity shareholders' funds 1,502 (55) Opening equity shareholders' funds 11,581 11,636 Closing equity shareholders' funds 13,083 11,581 Eleco plc Summarised Consolidated Balance Sheet (Unaudited) at 30 June 2005 2005 2004 £'000 £'000 Fixed assets 14,697 14,481 Current assets Stocks 2,166 2,370 Debtors 10,516 9,140 Cash at bank and in hand 2,707 2,490 15,389 14,000Creditors: amounts falling due within one year (15,309) (13,628) Net current assets 80 372 Total assets less current liabilities 14,777 14,853 Creditors: amounts falling due after more than one year (1,409) (2,859) Provisions for liabilities and charges (285) (413) Net assets 13,083 11,581 Capital and reserves Called up share capital 4,911 4,910 Share premium account 6,022 6,020 Merger reserve 367 367 Other reserve (50) (50) Profit and loss account 1,833 334 Equity shareholders' funds 13,083 11,581 Eleco plc Consolidated Cash Flow Statement (Unaudited) for the year ended 30 June 2005 Notes 2005 2004 £'000 £'000 Net cash inflow from continuing operations 7 3,999 5,170 Net cash inflow/(outflow) from discontinued operations 7 56 (291) Net cash inflow from operating activities 7 4,055 4,879 Returns on investment and servicing of finance Interest received 196 130 Interest paid (401) (342) Interest element of finance lease rentals (32) (22) Net cash outflow from returns on investment and servicing (237) (234)of financeNet cash outflow from taxation (532) (773) Capital expenditure and financial investment Purchase of fixed assets (1,269) (1,259) Disposal of tangible fixed assets 100 103 Purchase of investments (217) (154) Net cash outflow from capital expenditure and financial (1,386) (1,310)investmentAcquisitions and disposals Purchase of subsidiary undertakings (333) (363) Cash acquired with subsidiary undertakings 163 735 Net cash (outflow)/inflow from acquisitions and disposals (170) 372 Equity dividends paid (621) (597) Net cash inflow before financing 1,109 2,337 Financing New bank loans 150 500 Repayment of principal under finance leases (293) (225) Repayment of bank loans (746) (685) Issue of ordinary shares 3 68 Own shares purchased by Employee Share Ownership Trust - (45) Net cash outflow from financing (886) (387) Increase in cash in the year 8 223 1,950 Eleco plc Notes 1. The financial information in this announcement does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. Statutory accounts of the Company, on which the Auditors will report, will be delivered to the Registrar of Companies and posted to shareholders on 21 October 2005. The comparative figures for the year to 30 June 2004 have been taken from, but do not constitute, the Company's statutory financial statements for that financial year. Those financial statements have been reported on by the Auditors and delivered to the Registrar of Companies. The Report of the Auditors was unqualified and did not contain a statement under s237(2) or (3) of the Companies Act 1985. 2. The information herein has been prepared on the basis of the accounting policies adopted for the year ended 30 June 2005, as set out in the Company's Annual Report and Accounts. 3. Turnover and Segmental analysis Group turnover and profits were attributable as follows Turnover Operating profit/ (loss) 2005 2004 2005 2004 £'000 £'000 £'000 £'000 Continuing operations Building Systems 42,333 40,040 3,725 3,433 Software Systems 5,503 4,280 (1,033) (1,072) Total continuing 47,836 44,320 2,692 2,361 Discontinued operations Software Systems 182 442 (55) (192) Total discontinued 182 442 (55) (192) Total 48,018 44,762 2,637 2,169 4. A dividend of £195,000 (0.4p per share) was declared at the interim stage. A final dividend representing 1.00p per share is being proposed and, if approved at the Annual General Meeting, will be payable on 9 December 2005 to shareholders on the register on 25 November 2005. 5. The calculation of basic earnings per share is based on the profit attributable to equity shareholders of £2,056,000 (2004: £311,000) and on 48,680,560 ordinary shares (2004: 48,350,144), being the weighted average number of ordinary shares in issue during the year. The calculation of diluted earnings per share is based on the profit attributable to equity shareholders of £2,056,000 (2004: £311,000) and on 48,700,519 ordinary shares (2004: 48,417,491), being the weighted average diluted number of ordinary shares in issue during the year. The earnings per share from continuing operations is 4.5p (2004: 2.8p), which gives a clearer guide to the underlying performance in the period. The calculation is based upon the profit on continuing operations attributable to equity shareholders of £2,181,000 (2004: £1,354,000) and on 48,680,560 (2004: 48,350,144) ordinary shares, being the weighted average number of ordinary shares in issue during the year. 6. Reconciliation of operating profit to net cash flow from operating activities Continuing Discontinued 2005 2004 2005 2004 £'000 £'000 £'000 £'000 Operating profit 2,692 2,361 (55) (192) Termination costs and losses - - (124) (230) Depreciation charge 1,334 1,229 13 40 Amortisation of intangible assets 545 352 - - Amortisation of LTIP awards 203 175 - - (Profit)/loss on sale of fixed assets (5) (3) 3 9 Working capital (increase) / decrease (770) 1,056 219 82 Net cash inflow/(outflow) from 3,999 5,170 56 (291) operating activities 7. Reconciliation of net cash flow to movement in net debt 2005 2004 £'000 £'000 Increase in cash in the year 223 1,950 Cash flow from movements in debt and lease 889 410 financing Increase in net debt resulting from cash flows 1,112 2,360 Other non-cash items: New finance leases (555) (281) Effects of changes in foreign exchange rates (71) 16 Decrease in net debt in the year 486 2,095 Opening net debt (310) (2,405) Closing net funds/(debt) 176 (310) 8. The Annual General Meeting of Eleco plc will be held at The London Capital Club, 15 Abchurch Lane, London EC4N 7BB at 12:00 noon on 16 November 2005. This information is provided by RNS The company news service from the London Stock Exchange