Elecosoft Regulatory News (ELCO)

18 Mar 2005 07:00

Eleco PLC18 March 2005 18 March 2005 ELECO PLC The Building Systems and Construction Software Group INTERIM RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2004 Enquiries to: John Ketteley, Executive Chairman Tel: 01920 443 830Eleco plc john@ketteley.com David Dannhauser, Finance Director Tel: 01920 443 830Eleco plc mail@elecoplc.co.uk Tarquin Edwards/Chris Steele Tel: 07879 458 364 / 07979 604 687Binns & Co PR Tel: 020 7786 9600 "Building on Technology" Highlights •Turnover up 5.9% to £22,882,000 (2003: £21,615,000) following improved performances in the Building Systems and Software divisions. •Operating profits of continuing operations improved to £695,000 (2003: £615,000) benefiting from reduced losses from Software's continuing operations. •Higher profits from the Building Products division in the UK and overseas and together with a better performance by Software have offset the temporarily constrained performance from Bell & Webster Concrete and have enabled the results of continuing operations to be marginally ahead of the corresponding period last year. •Interim dividend increased by 6.7% to 0.40p per share (2003: 0.375p). John Ketteley, Executive Chairman of Eleco plc, commented: "Turnover and operating profits from our continuing operations were ahead ofthose for the corresponding period last year. As anticipated at the time of theAnnual General Meeting in November 2004, operational constraints at Bell &Webster Concrete gave rise to lower pre-tax profits from the Precast activitiesthan the previous half-year. However, this was more than offset by higherprofits from the other Building Products activities in the UK and overseastogether with a better performance from the Software businesses." "We now have a proven executive team in place at Precast, Building Products andSoftware. Demand for our existing ranges of building products in Germany, SouthAfrica and the UK is good. We are bringing new building products to market,backed by innovative supporting software and sales of our software programs areincreasing. "Building on Technology" sums up our corporate strategy and wecontinue to put in place a sound base for future growth." Chairman's Statement Turnover and operating profits from our continuing operations were ahead ofthose for the corresponding period last year. As anticipated at the time of theAnnual General Meeting in November 2004, operational constraints at Bell &Webster Concrete gave rise to lower pre-tax profits from Precast activities thanthe previous half-year. However, this was more than offset by higher profitsfrom the other Building Products activities in the UK and overseas together witha better performance from the Software businesses. Turnover in the six months ended 31 December 2004 was £22,882,000 (2003:£21,615,000) an increase of 5.9 per cent. over the turnover for thecorresponding period last year. Turnover of Building Systems was £20,174,000(2003: £19,179,000), an increase of 5.2 per cent., while turnover of Softwarewas also higher, up 11.1 per cent. at £2,708,000 (2003: £2,436,000), £150,000 ofwhich was contributed by discontinued operations (2003: £301,000). Operating profits from continuing operations amounted to £695,000 (2003£615,000). Losses of discontinued operations amounted to £55,000 (2003: loss£161,000). Building Systems contributed a profit of £1,528,000, (2003:£1,588,000); Software's continuing operations incurred a loss of £386,000 (2003:£543,000) after goodwill amortisation of £135,000 (2003: £129,000). In December 2003 we reduced the scale of our new media interests in response tothe tightening of market conditions in the UK. In the event conditions continuedto worsen and, accordingly, in December 2004 we decided to take the further stepof closing the Stafford office. After making provision for closure losses of£155,000 on termination of these discontinued operations that are anticipated toarise in the second part of the year, the Group profit on ordinary activitiesbefore tax amounted to £343,000 (2003: loss £515,000). Earnings per share wereequivalent to 0.3p (2003: loss per share 1.3p). The Board has declared an increased interim dividend of 0.40p per share (2003:0.375p), up 6.7 per cent. which will be payable on 22 April 2005 to shareholderson the Register on 1 April 2005. Borrowings increased during the period by £2,248,000 (2003: £1,527,000). The netoutflow from operating activities of £198,000 compares with a net inflow of£840,000 in the corresponding period. The principal contributing factors to thehigher than seasonal increase in working capital during the period were thesettlement of £662,000 VAT output tax on intra-group property transfers, towhich reference was made in the last full year accounts, and investment inworking capital in starting up operations at Eleco Timber Frame. Interestcharges amounted to £142,000 (2003: £99,000), reflecting both higher borrowingsand higher interest rates over the corresponding period last year. Building Systems Precast Concrete At the AGM in November 2004 I reported that due to contract delays on Phase IIIof the Lancaster University Accommodation Project beyond our control, therecovery in Bell & Webster's profitability would depend on the timing of thestart on production of units for Phase III in the second half of the year. Inthe event, the need for the main contractor, Jarvis Group, to divest itself ofits interest in the contract and for a new contractor to assume responsibilityfor Phase III gave rise to a greater delay than was anticipated at the time ofthe statement to which I refer. As a consequence Bell & Webster's work on site is now due to begin in March 2005compared with the original start date of August 2004. This interruption to theLancaster University Student Accommodation Project was the principal factor inBell & Webster's turnover in the half year being some 13 per cent. lower thanthe corresponding period last year. While this delay is disappointing, It is most encouraging to us that the highstandard of Bell & Webster's product and service resulted in Bell & Websterbeing retained for Phase III and we look forward to working with our newpartners on the Project. Demand and enquiries for Bell & Webster FastBuild(R) rooms and standard precastconcrete products are currently running at a good level and I anticipate abetter performance in the second half year although the delay in startingproduction of units for Phase III will mean that the results of Bell & WebsterConcrete for the year as a whole will be lower than those for the previous year. Building Products Paul Taylor was appointed Chief Executive of Building Products UK on 1 July2004. Roofing, Cladding and Panels Sales of SpeedDeck Building Systems were 7 per cent. higher than those for thecorresponding period last year. Good progress was made in the period on bringingtogether Downer Cladding Systems, Prompt Profiles and SpeedDeck Building Systemsbusinesses to provide a complete roofing and cladding service to our customers. At Stramit, ElecoFloor(R) continued to gain acceptance by leading house buildersas an efficient and economical acoustic flooring product. Eleco Timber Frame commenced production of ElecoFrame(R), a patented timberstructural wall frame system, at Speke at the end of June 2004. This operationhas started well and made a positive contribution to the Group's results in theperiod. Timber Engineering Products Gang-Nail Systems in the UK performed well in the period although sales weredown 3 per cent. on the corresponding period of the previous year despite havingto accommodate significant increases in raw material prices. Eleco Bauprodukte in Germany produced an improved performance with sales up 33per cent. over the corresponding period of the previous year as a consequence ofa good all round service performance. International Truss Systems in South Africa produced another exceptionalperformance with sales up 64 per cent. on the corresponding period. Software Centres of excellence in software have been established in Sweden, Germany, andthe UK and in December 2004 we announced the appointment of Nick Caw as ChiefExecutive of Eleco Software. The application of fast and efficient software inthe design and production of building products and components is a fundamentalstrength of our business. The aim is to establish Eleco Software as a profitableentity in architectural, constructional timber engineering and 3D visualisationand compression software and to co-ordinate the development of existing and newprograms through our software development teams. We are making significantprogress towards these objectives. The copyright dispute relating to our ArCon(R) software was settled at the endof December 2004 and the benefits of the settlement will make a positivecontribution to results in the second half-year. In Sweden, Consultec System, Consultec Byggprogram and Consultec A&K, togetherproduced a sound performance in a difficult market environment. Consultec Systemappointed a distributor for its StairCon(R) program in the US, with first salesachieved. In the UK, Eleco Software also recorded much improved results compared with thecorresponding period last year. Its new Whole House Engineering program was wellreceived at 7 introductory seminars in the UK and Ireland. Eleco Software Germany will shortly release ArCon Version 9 in Germany and alsothe latest version of o2c(R) 3D visualisation and compression software. Outlook Demand for Eleco's building products has been steady and we do not anticipateany change in the second half of the year. The launch of Whole House Engineeringsoftware has already helped to create interest in our building products frompotential new customers although it is unlikely that the full benefit of thisdevelopment will be felt in the second half year. I anticipate that Softwarewill produce a better performance in the second half due partly to much lowerlegal costs and partly to increased income from ArCon, particularly the retailversion, which is the number one seller in the French and German retail markets.The uncertainty caused by the contract delays on Phase III of the LancasterUniversity Accommodation Project has now been resolved but the effect of thedelay means that the contribution from Precast will be lower than last year. We now have a proven executive team in place at Precast, Building Products andSoftware. Demand for our existing ranges of building products in Germany, SouthAfrica and the UK is good. We are bringing new building products to market,backed by innovative supporting software and sales of our software programs areincreasing. "Building on Technology" sums up our corporate strategy and wecontinue to put in place a sound base for future growth. John KetteleyEXECUTIVE CHAIRMAN18 March 2005 Eleco plc ----------- Consolidated Profit and Loss Account -------------------------------------- (Unaudited) (Audited) Half year ended Year ended 31 December 30 June 2004 2003 2004 £'000 £'000 £'000---- -------------------------------- ------ -------- --------Turnover Continuing operations 22,732 21,314 44,132 Discontinued operations 150 301 630---- -------------------------------- ------ -------- -------- 22,882 21,615 44,762---- -------------------------------- ------ -------- --------Operating profit Continuing operations 695 615 2,361 Discontinued operations (55) (161) (192)---- -------------------------------- ------ -------- -------- 640 454 2,169Provision for loss ontermination ofdiscontinued operations (155) (870) (996)----------------------------------- ------ -------- --------Profit / (loss) onordinary activities beforeinterest 485 (416) 1,173Net interest payable (142) (99) (237)Profit / (loss) onordinary activities beforetax 343 (515) 936Tax on ordinary activities (190) (118) (625)Profit / (loss) onordinary activities aftertax 153 (633) 311 Dividend on ordinaryshares (Note 2) (195) (184) (611)Retained loss (42) (817) (300)----------------------------------- ------ -------- --------Dividends per share 0.40p 0.375p 1.20p Earnings / (loss) pershare (Note 3) 0.3p (1.3)p 0.6pDiluted earnings / (loss)per share (Note 4) 0.3p (1.3)p 0.6p----------------------------------- ------ -------- -------- Notes------- 1. The interim results have been prepared on the basis of the accounting policies adopted for the year ended 30 June 2004, as set out in the Company's Annual Report and Accounts. These interim accounts do not constitute the Company's statutory accounts for the period. 2. The dividend will be payable on 22 April 2005 to shareholders on the register on 1 April 2005. 3. Based on the profit attributable to shareholders and a weighted average of 48,677,587 ordinary shares (Dec 2003 - 48,038,303 and Jun 2004 - 48,350,144). 4. Based on the profit attributable to shareholders and a diluted weighted average of 48,695,790 ordinary shares (Dec 2003 - 48,416,682 and Jun 2004 - 48,417,491). The dilution is caused by outstanding share options. 5. On 1 July 2004 the Group acquired the entire issued share capital of Ten Data AB, the owner of the intellectual property in the Ten Win software, and the business and certain assets of Ten Win AB, for a total initial consideration, including acquisition expenses of £234,000. Provision has been made for £57,000 deferred contingent consideration payable. Both companies are Swedish. Goodwill on acquisition of £199,000, based on provisional fair values, has been capitalised and included within fixed assets. The total initial consideration of £234,000, including expenses was paid in cash and £146,000 cash was acquired. The assets and business acquired were immediately transferred to, and integrated within, Consultec Byggprogram AB. 6. The comparative figures for the year ended 30 June 2004 have been taken from but do not constitute the Company's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain a statement under section 237 (2) or (3) of the Companies Act 1985. 7. Copies of this interim statement and results, which were approved by the Board on 17 March 2005, are available from the registered office of the Company, which is at Eleco House, 15 Gentlemen's Field, Westmill Road, Ware, Herts. SG12 0EF. Statement of Total Recognised Gains and Losses ------------------------------------------------ (Unaudited) (Audited) Half year ended Year ended 31 December 30 June 2004 2003 2004 £'000 £'000 £'000--- ---------------------------------- ------ -------- ------- Profit / (loss) for the period 153 (633) 311--- ---------------------------------- ------ -------- ------- Currency translation differences on foreign 34 63 47--- currency net investments ------ -------- ------- ---------------------------------- Total recognised gains / (losses) for the 187 (570) 358--- period ------ -------- ------- ---------------------------------- Reconciliation of Movement in Equity Shareholders' Funds ---------------------------------------------------------- (Unaudited) (Audited) Half year ended Year ended 31 December 30 June 2004 2003 2004 £'000 £'000 £'000--- ---------------------------------- ------ -------- -------- Profit / (loss) for the period 153 (633) 311 Other recognised gains 34 63 47 LTIP amortisation expense net of vesting 94 51 175 charge Decrease in own shares held by ESOT - 37 (45) Dividends (195) (184) (611) Issue of ordinary shares 3 39 68--- ---------------------------------- ------ -------- -------- Net increase / (reduction) in equity 89 (627) (55) shareholders' funds Opening equity shareholders' funds 11,581 11,636 11,636--- ---------------------------------- ------ -------- -------- Closing equity shareholders' funds 11,670 11,009 11,581--- ---------------------------------- ------ -------- -------- Eleco plc ----------- Summarised Consolidated Balance Sheet --------------------------------------- (Unaudited) (Audited) 31 December 30 June --- --- --- --- 2004 2003 2004 --- --- --- --- £'000 £'000 £'000-- ------------------------ ---- ---- -------- ------ -------- -------- Fixed assets Intangible assets 5,892 5,617 5,935 Tangible assets 8,019 7,579 8,023 Investments 615 474 523-- ------------------------ ---- ---- -------- ------ -------- -------- 14,526 13,670 14,481-- ------------------------ ---- ---- -------- ------ -------- -------- Current assets Stocks 2,819 1,998 2,370 Debtors 10,281 9,885 9,140 Cash and bank balances 2,540 2,425 2,490-- ------------------------ ---- ---- -------- ------ -------- -------- 15,640 14,308 14,000Creditors falling due within oneyear Bank loans and overdrafts (2,965) (4,180) (891) Obligations under finance (200) (184) (175) leases Other creditors (13,204) (10,422) (12,562)------------------------ ---- ---- -------- ------ -------- --------Net current(liabilities)/ assets (729) (478) 372------------------------ ---- ---- -------- ------ -------- -------- Creditors falling due after morethan one year Bank loans (1,184) (1,411) (1,471) Obligations under finance (277) (255) (263) leases Other creditors - - (1,125)-- ------------------------ ---- ---- -------- ------ -------- -------- (1,461) (1,666) (2,859) Provisions forliabilitiesand charges (666) (517) (413)------------------------ ---- ---- -------- ------ -------- --------Net assets 11,670 11,009 11,581------------------------ ---- ---- -------- ------ -------- -------- Capital and reserves Called up share capital 4,911 4,894 4,910 Share premium account 6,022 6,007 6,020 Merger reserve 367 367 367 Other reserve - own shares held (50) (145) (50) by ESOT Profit and loss account 420 (114) 334------------------------ ---- ---- -------- ------ -------- --------Equityshareholders'funds 11,670 11,009 11,581------------------------ ---- ---- -------- ------ -------- -------- Eleco plc ----------- Consolidated cash flow statement ---------------------------------- (Unaudited) (Audited) Half year ended Year ended 31 December 30 June --- --- 2004 2003 2004 --- --- £'000 £'000 £'000-- ------------------------------- ----- ------ -------- --------Operating activities Net cash (outflow) / inflow from continuing (198) 840 4,879 operating activities Net cash outflow from discontinued (20) (91) - operating activities-------------------------------- ----- ------ -------- --------Net cash(outflow) /inflow fromoperatingactivities (218) 749 4,879-------------------------------- ----- ------ -------- -------- Returns on investment and servicing offinance Net interest paid (136) (86) (234) ---------------------------------- ------ -------- --------Net cashoutflow fromreturns oninvestment andservicing offinance (136) (86) (234)---------------------------------- ------ -------- -------- Taxation (349) (408) (773)-------------------------------- ----- ------ -------- -------- Capital expenditure and financial investment Purchase of fixed assets (548) (671) (1,259) Sale of tangible fixed assets and 95 70 103 investments Purchase of investment (92) (105) (154) ---------------------------------- ------ -------- -------- ---------------------------------- ------ -------- --------Net cashoutflow fromcapitalexpenditureand financialinvestment (545) (706) (1,310)---------------------------------- ------ -------- -------- Acquisitions and disposals Purchase of subsidiary undertakings net of (97) (254) 372 cash acquired-- ------------------------------- ----- ------ -------- --------Net cash(outflow) /inflow fromacquisitionsand disposals (97) (254) 372---------------------------------- ------ -------- -------- Equitydividends paid (426) (410) (597)-------------------------------- ----- ------ -------- -------- Net cash(outflow) /inflow beforefinancing (1,771) (1,115) 2,337-------------------------------- ----- ------ -------- -------- Financing New bank loans - - 500 Repayment of principal under finance (88) (126) (225) leases Repayment of bank loans (392) (325) (685) Issue of ordinary shares 3 39 68 Own shares purchased by Employee Share - - (45) Ownership Trust-------------------------------- ----- ------ -------- --------Net cashoutflow fromfinancing (477) (412) (387)-------------------------------- ----- ------ -------- -------- (Decrease) /increase incash in theperiod (2,248) (1,527) 1,950-------------------------------- ----- ------ -------- -------- Eleco plc ----------- Consolidated cash flow statement - reconciliations ---------------------------------------------------- Reconciliation of operating profit to net cash flow from operating activities Continuing Discontinued (Unaudited) (Audited) (Unaudited) (Audited) Half year ended Year ended Half year ended Year ended 31 December 30 June 31 December 30 June 2004 2003 2004 2004 2003 2004 £'000 £'000 £'000 £'000 £'000 £'000 ------ -------- -------- ------ -------- -------- Operating profit 695 620 2,335 (55) (166) (166) Termination costs - - - - - (230) and losses Depreciation 669 595 1,249 10 11 20 charge Amortisation of 171 168 352 - - - intangible assets Amortisation of 94 88 175 - - - LTIP Awards Loss / (profit) on 3 23 (2) - - 8 sale of fixed assets Changes in 88 (134) 42 (88) 134 (42) intra-group indebtedness Working capital (1,918) (520) 1,054 113 (70) 84 (increase) / decrease-- ------------------- ------ -------- -------- ------ -------- -------- Net cash (outflow) (198) 840 5,205 (20) (91) (326)-- / inflow from ------ -------- -------- ------ -------- -------- operating activities ------------------- Reconciliation of net cash flow to movement in netdebt (Unaudited) (Audited) Half year ended Year ended 31 December 30 June 2004 2003 2004 £'000 £'000 £'000-- ------------------------------- ------ ------ -------- -------- Decrease in cash in the period (2,248) (1,527) 1,950 Cash flow from movements in debt and lease 480 451 410-- financing ------ ------ -------- -------- ------------------------------- (Increase) / decrease in net debt (1,768) (1,076) 2,360 resulting from cash flows New finance leases (145) (174) (281) Effects of changes in foreign exchange 137 50 16-- rates ------ ------ -------- -------- ------------------------------- (Increase) / decrease in net debt (1,776) (1,200) 2,095 Opening net debt (310) (2,405) (2,405)-- ------------------------------- ------ ------ -------- -------- Closing net debt (2,086) (3,605) (310)-- ------------------------------- ------ ------ -------- -------- Segmental analysis Group turnover and profits were attributable as follows External sales Profit / (loss) ----------------- ------------------ (Unaudited) (Audited) (Unaudited) (Audited) Half year ended Year ended Half year ended Year ended 31 December 30 June 31 December 30 June 2004 2003 2004 2004 2003 2004 £'000 £'000 £'000 £'000 £'000 £'000 ------------------- ------ -------- -------- ------ -------- -------- Continuing activities Building systems 20,174 19,179 40,040 1,209 1,285 3,433 Software systems 2,558 2,371 4,092 (514) (670) (1,072) ------------------- ------ -------- -------- ------ -------- -------- Total continuing 22,732 21,550 44,132 695 615 2,361 ------------------- ------ -------- -------- ------ -------- -------- Discontinued activities Software systems 150 301 630 (55) (161) (192) ------------------- ------ -------- -------- ------ -------- -------- Total discontinued 150 301 630 (55) (161) (192) ------------------- ------ -------- -------- ------ -------- -------- Exceptional losses - (155) (870) (996) discontinued activities ------------------- ------ -------- -------- ------ -------- -------- Profit / (loss) before 485 (416) 1,173 interest ------ -------- -------- ------ -------- -------- ------------------- This information is provided by RNS The company news service from the London Stock Exchange