Flowtech Fluid. Regulatory News (FLO)

27 Jul 2005 07:00

Flomerics Group PLC27 July 2005 FOR IMMEDIATE RELEASE 27 JULY 2005 FLOMERICS GROUP PLC Interim Results "Record profit for the half year" Flomerics Group PLC, supplier of analysis software to the telecommunications,semiconductor and computer industries and other sectors of the electronicsindustries, announces its results for the six months ended 30 June 2005. Key Points • Turnover up 19% at £5.3 million (2004 : £4.4 million) - excluding contribution from the MicReD acquisition, turnover up 13% at £5.0 million. • Profit before tax and amortisation of goodwill increased to £380,000 (2004 : £65,000 loss). • Successful acquisition in April 2005 of Microelectronics Research and Development Ltd (MicReD) which contributed £0.3 million to turnover and £93K to profit before tax and amortisation of goodwill. • Revenue from Europe up by 25%, excluding the contribution from MicReD. • Sales of the principal thermal analysis product, FLOTHERM, up by 16% (2004 : down 7%) and sales of FLO/EMC, the companion product for electromagnetic analysis, up by 43%. • Strong cash position of £3.5 million (2004 : £2.6 million). Commenting on the results, David Mann, Chairman, said: "We have been very encouraged by these excellent results for the first half of2005. The directors believe that the Company is well placed to meet marketexpectations for the year, with a better balance between the first and secondhalf than in previous years. The management team is committed to maintaining this momentum, and to achievingongoing improvements in profit margin. With a strong balance sheet, the companyis well positioned to take advantage of business expansion opportunities as theyarise." Enquiries: Flomerics 020 8487 3000David Tatchell, Chief ExecutiveGary Carter, Chief Operating OfficerChris Ogle, Finance Director Buchanan Communications 020 7466 5000Nicola Cronk / Frances Adigwe Chairman's Statement Introduction I am delighted to report that Flomerics' results for the first half of 2005demonstrate both strong progress in our business and continuing recovery in ourmarkets. Turnover (including the recently acquired business, MicReD) is up 19%on the same period last year - on a like-for-like basis (without thecontribution from MicReD) turnover growth is 13%. Coupled with continuingcareful management of the cost base, the strong turnover figures enabled us toachieve a record profit for the half year. Results Turnover was £5.3 million (2004: £4.4 million). Excluding the contribution fromMicReD, turnover was £5.0 million. Recurring revenues accounted for 51% (2004:52%) of total turnover. Administrative costs were up by 6%, resulting in aprofit before amortisation of goodwill and taxation of £380,000 (2004: £65,000loss). Our cash position continues to strengthen, to £3.5m, compared with £2.6 milliona year ago. In order to compare like-with-like, the comparisons made below with the sameperiod in the prior year are all at constant rates of exchange. For the samereason, the figures exclude contributions from MicReD. All regions achieved growth in turnover - Europe 25%, the US 12% and AsiaPacific 4%. In Europe, we benefited from a large sale, which enabled our Italianoffice to triple its sales over 2004. In Asia Pacific we are in the process ofchanging our distribution arrangements in Japan in order to strengthen ourpresence in this key market. Looking at sales by product, FLOTHERM sales were up by 16% (2004: down 7%),reflecting the continuing strength of this market leading, thermal-analysisproduct in the recovering electronics market. The new thermal product, FLO/PCB, released last year (for thermal analysis atprinted circuit board level) is building momentum. The product is becomingestablished alongside FLOTHERM at a number of major customers, and is beginningto make a good contribution to sales. FLO/EMC (the companion product to FLOTHERM, which analyses electromagneticemissions from electronics equipment) achieved continuing good growth, of 43%. MicReD In April we announced the acquisition in Hungary of Microelectronics Researchand Development Limited (MicReD). MicReD's main product (the T3Ster) isinstrumentation used for the thermal characterization of electronic chippackages. In the period to end June, MicReD has been successful in closing sales in Koreaand in Europe, contributing a total of £264,000 to first half turnover. We seegood opportunities in North America, and consequently we are recruiting toprovide dedicated resources in that market. Dividend As in previous years no interim dividend will be paid. Outlook We have been very encouraged by these excellent results for the first half of2005. The directors believe that the Company is well placed to meet marketexpectations for the year, with a better balance between the first and secondhalf than in previous years. Flomerics' strategy has been to address the opportunities associated with therecovery in the electronics industries with an improved and expanded set ofmarket leading products and a global presence. The results for the first half of2005 begin to demonstrate the success of this strategy. The management team is committed to maintaining this momentum, and to achievingongoing improvements in profit margin. With a strong balance sheet, the companyis well positioned to take advantage of business expansion opportunities as theyarise. David MannChairmanFlomerics Group plc27 July 2005 CONSOLIDATED PROFIT AND LOSS ACCOUNTInterim results for the six months to 30 June 2005 30-Jun-05 30-Jun-05 30-Jun-05 30/06/2004* 31-Dec-04 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) Continuing Acquisition Group Activities £'000 £'000 £'000 £'000 £'000 Turnover 4,992 264 5,256 4,430 10,241 Cost of sales (91) (147) (238) (74) (201) Gross Profit 4,901 117 5,018 4,356 10,040 Administrative expenses (4,702) (24) (4,726) (4,452) (9,367) Amortisation of goodwill (41) (18) (59) (41) (82) Other Operating Income 35 - 35 41 75 Operating Profit / (loss) 193 75 268 (96) 666 Interest receivable and other income 72 - 72 30 71 Interest payable and similar charges (19) - (19) (40) (66) Profit / (loss) on Ordinary 246 75 321 (106) 671Activities Before Taxation Tax on profit on ordinary activities (51) (15) (66) - (102) Profit / (loss) on Ordinary 195 60 255 (106) 569Activities After Taxation Dividends - - - - (161) Transferred to Reserves 195 60 255 (106) 408 Earnings / (loss) per share 1.73p (0.72p) 3.88p Diluted earnings / (loss) per share 1.66p (0.71p) 3.85p * As restated - see Note 7. STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES 30-Jun-05 30-Jun-04 31-Dec-04 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Profit / (loss) for the Period 255 (106) 569 Unrealised gain / (loss) on translation of foreign currency 31 (59) (105)investments Total Recognised gain / (loss) 286 (165) 464 CONSOLIDATED BALANCE SHEET 30-Jun-05 30-Jun-04 31-Dec-04At 30 June 2005 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000Fixed AssetsIntangible assets 1,448 411 376Tangible assets 1,756 1,648 1,658 3,204 2,059 2,034 Current AssetsStock 10 - -Debtors 3,338 3,232 3,891Cash at bank and in hand 3,504 2,571 3,314 6,852 5,803 7,205 Creditors: amounts falling due withinone year (3,582) (2,666) (3,605) Net Current Assets 3,270 3,137 3,600 Total Assets Less Current Liabilities 6,474 5,196 5,634 Creditors: amounts falling due afterone year (617) (476) (446) Net Assets 5,857 4,720 5,188 Capital and ReservesCalled up share capital 148 146 146Shares to be issued account 249 - -Share premium account 1,734 1,602 1,602Merger reserve 759 759 759Profit and loss account 2,967 2,213 2,681 Equity Shareholders' Funds 5,857 4,720 5,188 CONSOLIDATED CASH FLOW STATEMENT 30-Jun-05 30/06/2004* 31-Dec-04for the six months to 30 June 2005 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000Operating ActivitiesOperating profit / (loss) 268 (96) 666Depreciation and amortisation charges 211 216 395Exchange differences 22 (59) (72)Decrease in stock 43 - -Decrease / (increase) in debtors 584 603 (375)(Decrease) / increase in creditors (170) (249) 513Net Cash Inflow From Operating Activities 958 415 1,127 Net cashflow from returns on investments and servicingof finance 53 (10) 5Taxation paid / (received) (23) (6) 227Net cashflow from capital expenditure (247) (142) (302)Net cash paid for acquisition (360) - -Equity Dividend paid (161) (146) (146)Net Cashflow Before Financing 220 111 911 Net Cashflow From Financing (30) (30) (60) Increase in Cash in the Period 190 81 851 * As restated - see Note 7. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS 30-Jun-05 30-Jun-04 31-Dec-04 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Increase in Cash in the Period 190 81 851 Cash outflow from decrease in debt and lease financing 30 30 60 Foreign exchange differences - - (27) Movement in Net Funds in the Period 220 111 884 Net Funds at Beginning of Period 2,805 1,921 1,921 Net Funds at End of Period 3,025 2,032 2,805 NOTES TO THE INTERIM REPORT 1. ACCOUNTING POLICIES The financial information contained in this Interim Report does not constitutestatutory accounts. The interim results, which have not been audited, have beenprepared using accounting policies consistent with those used in the preparationof the Annual Report and Accounts for the year ended 31 December 2004. Thoseaccounts have been filed with the Registrar of Companies and received anunqualified audit report. 2. TAXATION Taxation for the six months to 30 June 2005 is based on the effective rate oftaxation that is estimated to apply to the year ending 31 December 2005. 3. EARNINGS PER SHARE Basic earnings / (loss) per share is calculated by dividing the profit / (loss)on ordinary activities after taxation in the period by the weighted averagenumber of shares in issue in the period as follows: Unaudited Unaudited 6 months ended 6 months ended 30 June 2005 30 June 2004 Profit / (loss) for the period (£'000) 255 (106)Weighted average number of shares in issue ('000) 14,717 14,647Earnings / (Loss) per share (p) 1.73 (0.72)Diluted weighted average number of shares ('000) 15,356 14,840Diluted earnings (loss) per share (p) 1.66 (0.71) The diluted earnings per share calculation is based on a fair value of 68p pershare (30 June 2004: 74p). 4. SEGMENTAL INFORMATION The group's turnover for each geographic area of operation is: 30 Jun 05 30 Jun 04 31 Dec 04 £'000 £'000 £'000United States of America 2,032 1,893 4,291Europe 2,062 1,550 3,899Asia Pacific 1,162 987 2,051 5,256 4,430 10,241 Segmental information on profit before tax and net assets is disclosed in theAnnual Report. 5. ANALYSIS OF NET FUNDS 30 Jun 05 30 Jun 04 31 Dec 04 £'000 £'000 £'000Cash in hand and at bank 3,504 2,571 3,314Debt due after one year (416) (476) (446)Debt due within one year (63) (63) (63)Total 3,025 2,032 2,805 Debt represents a mortgage that was taken out on a property acquired in 2001. 6. ACQUISITION On 28 April 2005, the Group acquired the entire share capital ofMicroelectronics Research and Development Limited ("MicReD") for a maximum totalconsideration (before expenses) of approximately €2.1 million (approximately£1.4 million). The maximum consideration is only payable on an over-targetperformance. For an "on target" performance the total consideration will beapproximately £1.2 million. This figure has been assumed in the provisionalcalculation of the goodwill shown below: £'000sFair value of net assets acquired: 178 Goodwill 1,131 1,309 Satisfied by:Shares Issued 134Shares to be Issued 33Cash 445Acquisition Costs 79Deferred Consideration:Cash less than 1 year 201Cash more than 1 year 201Shares 216 1,309 7. PRIOR YEAR RECLASSIFICATION As noted in last year's Annual Report, in previous years rental income wasclassified within other interest receivable and other income. The directorsbelieve it is more accurate for this to be shown in other operating income. Theeffect of this is to increase operating profit by £35,000 (and to reduce theoperating loss in 2004 by £41,000). There is no impact on the retained profits. This information is provided by RNS The company news service from the London Stock Exchange