Last checked at 27 Jun 2013 10:38
LPA GROUP PLC
Half-Yearly Report for the six months to 31 March 2013
LPA Group PLC ("LPA" or "the Group"), the LED lighting and electro-mechanical system manufacturer and distributor, announces its results for the six months to 31 March 2013, and an increase in the interim dividend of 20% to 0.60p.
KEY POINTS
·; Revenue: £8.6m (2012: £8.9m)
·; Profit before tax: £212,000 (2012: £312,000)
·; Diluted earnings per share: 1.49p (2012: 2.22p)
·; Interim dividend: 0.60p (2012: 0.50p)
·; The LED Lighting business grew sales by 20% and significantly improved margins, and has been selected as preferred bidder for the Intercity Express Programme.
·; The Electro-Mechanical Systems business has developed an exciting new High Speed Ethernet Backbone technology for passenger trains, which should also benefit Transport+.
·; Group well placed to benefit from forthcoming substantial investment in UK rail sector.
·; Sale of the Saffron Walden site is expected later this calendar year.
Michael Rusch, Chairman, comments:
"In my statement at the Annual General Meeting I advised that we expected a result for the first half which, while satisfactory, would fall short of last year, but provide a good base for achievement of expectations for the year as a whole. This has proved to be the case, but unlike last year when there was a confluence of positive effects in the second half, this year is proving very much more challenging.
"Our Lighting business is exceeding expectations and our main Electro-Mechanical business is meeting expectations and has developed new technology, which will also benefit Transport+ in the future.
"We have a very high level of tendering activity and we have received a number of Letters of Intent, but the hiatus in rail refranchising continues to delay new orders.
"As previously stated, this year is one of transition. We have a large programme of strategic development and rationalisation to deliver, which will commence on the sale of Tudor Works site, expected this calendar year.
"As a measure of our confidence for the future, the interim dividend has been increased 20% to 0.60p."
27 June 2013
ENQUIRIES:
LPA Group plc
Peter Pollock, Chief Executive Tel: 07881 626123 or 01799 512844
Steve Brett, Finance Director Tel: 07881 626127 or 01799 512860
Cairn Financial (Nominated Adviser) Tel: 020 7148 7900
James Caithie / Avi Robinson
Xcap Securities (Broker) Tel: 020 7101 7070
David Lawman / Adrian Kirk
College Hill (PR Adviser) Tel: 020 7457 2020
Mark Garraway / Helen Tarbet
CHAIRMAN'S STATEMENT
Sales revenue fell by 3% to £8.6m (2012: £8.9m) and profit before tax by 32% to £212,000 (2012: £312,000). Diluted earnings per share fell 33% to 1.49p (2012: 2.22p). Working capital employed remained comfortably within our normal trading range and net debt (with the July 2012 acquisition of our Shire Hill facility for £1.3m) amounted to £2.27m (2012: £1.45m); we continue to operate well within our banking facilities. We propose to increase the interim dividend by 20% to 0.60p per share (2012: 0.50p) which will be paid on 20 September 2013 to shareholders registered at the close of business on 30 August 2013.
Order entry in the first half was unchanged at £7.3m (2011: £7.3m) but comprised more routine orders. Included in this figure were further orders for ground power supply units for aircraft ('crocodiles') for Heathrow worth £0.5m and tube train interior upgrade for Transport+ worth £0.8m. Since the start of the second half, routine orders have continued a positive trend, but the highly beneficial short term projects which were a feature of the second half of last year have not repeated as yet. However, as announced on 20 May, we are delighted to have been selected by Hitachi as preferred bidder for the supply of LED based lighting for the Intercity Express Programme, with an estimated value in excess of £3m.
This is the first manifestation of the huge investment programme planned for UK rail referred to in my comments to the Annual General Meeting in March. A combination of the Department for Transport, Transport for London, Network Rail, London Underground Limited, the Association of Train Operating Companies and Rolling Stock Owning Companies, has announced a substantial level of investment over the next six years, including 4,100 new railway carriages (with 1,200 for Thameslink, 600 for Intercity Express Programme and 600 for CrossRail), an upgrade or life extension for a further 1,400 carriages and 2,780 new carriages for the Deep Tube Programme. Network Rail is negotiating a £35-£37bn investment programme with the Office of the Rail Regulator for the five year period to 2019. These investment plans together with our existing exports to Asia and Australasia suggest that the Group is well positioned for the future.
Our LED Lighting business continues to grow strongly, to improve margins and is exceeding expectations. Our Electro-Mechanical Systems business is meeting or exceeding expectations and has developed an exciting new High Speed Ethernet Backbone technology, which should give it an advantage in the future. This new technology will also benefit Transport+ in the after-market.
Our Component Distribution business is experiencing challenging short term trading conditions but it has large, medium and long term, contracts which commence at the beginning of next financial year and which should restore growth in its rail, aerospace and defence markets.
We are working hard to conclude a sale of our Tudor Works site in Saffron Walden. This is expected before the end of the calendar year and will trigger the refurbishment of our recently acquired Shire Hill factory in Saffron Walden, the subsequent relocation of our Saffron Walden activities and rationalisation of our electro-mechanical business. We will also build a 50% extension to our LED lighting factory in Normanton to replace a life expiring temporary building.
We have a strong senior management team and we continue to build up our engineering, and sales and marketing teams.
We look forward to meeting the exciting challenges ahead.
MICHAEL RUSCH
Chairman
27 June 2013
LPA GROUP PLC
Interim Unaudited Group Results for the Six Months ended 31 March 2013
CONSOLIDATED INCOME STATEMENT
6 months to 31 March 2013 Unaudited £000's | 6 months to 31 March 2012 Unaudited £000's | Year to 30 Sept 2012 Audited £000's | |
Revenue | 8,645 | 8,916 | 18,352 |
Operating profit | 203 | 316 | 921 |
Finance costs | (282) | (284) | (578) |
Finance income | 291 | 280 | 534 |
Profit before tax | 212 | 312 | 877 |
Taxation | (25) | (50) | (140) |
Profit for the period | 187 | 262 | 737 |
Attributable to: | |||
- Equity holders of the parent | 187 | 262 | 737 |
Earnings per share (see note 2) | |||
- Basic | 1.59p | 2.28p | 6.37p |
- Diluted | 1.49p | 2.22p | 6.13p |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 months to 31 March 2013 Unaudited £000's | 6 months to 31 March 2012 Unaudited £000's | Year to 30 Sept 2012 Audited £000's | |
Profit for the period | 187 | 262 | 737 |
Other comprehensive (expense) / income | |||
Cash flow hedges: | |||
Losses taken to equity | - | (2) | (16) |
Transferred to profit or loss for the period | 14 | 5 | 7 |
Tax on cash flow hedges | (3) | (1) | 2 |
| |||
Actuarial (loss) / gain on pension scheme | (224) | (67) | 840 |
Tax on actuarial (loss) / gain | 36 | 2 | (216) |
| |||
Other comprehensive (expense) / income net of tax | (177) | (63) | 617 |
| |||
| |||
Total comprehensive income for the period | 10 | 199 | 1,354 |
Attributable to: | |||
- Equity holders of the parent | 10 | 199 | 1,354 |
LPA GROUP PLC
Interim Unaudited Group Results for the Six Months ended 31 March 2013
CONSOLIDATED BALANCE SHEET
As at 31 March 2013 Unaudited £000's | As at 31 March 2012 Unaudited £000's | As at 30 Sept 2012 Audited £000's | |
Non-current assets | |||
Intangible assets | 1,321 | 1,321 | 1,317 |
Property, plant and equipment | 3,270 | 1,785 | 3,043 |
Retirement benefits | 834 | - | 952 |
5,425 | 3,106 | 5,312 | |
| |||
Current assets | |||
Inventories | 2,303 | 2,403 | 2,445 |
Trade and other receivables | 3,498 | 3,334 | 3,818 |
Cash and cash equivalents | 7 | 5 | 7 |
5,808 | 5,742 | 6,270 | |
Total assets | 11,233 | 8,848 | 11,582 |
Current liabilities | |||
Bank overdraft | (698) | (1,155) | (880) |
Bank loans and other borrowings | (109) | (285) | (93) |
Current tax payable | (105) | (8) | (93) |
Trade and other payables | (2,992) | (2,845) | (3,203) |
(3,904) | (4,293) | (4,269) | |
Non-current liabilities | |||
Bank loans and other borrowings | (1,466) | (14) | (1,400) |
Provisions | (5) | (5) | (5) |
Deferred tax liabilities | (221) | (21) | (241) |
Other payables | (23) | (24) | (23) |
(1,715) | (64) | (1,669) | |
Total liabilities | (5,619) | (4,357) | (5,938) |
Net assets | 5,614 | 4,491 | 5,644 |
Equity | |||
Share capital | 1,179 | 1,161 | 1,174 |
Share premium account | 448 | 400 | 433 |
Un-issued shares reserve | 168 | 202 | 163 |
Revaluation reserve | 306 | 307 | 306 |
Merger reserve | 230 | 230 | 230 |
Retained earnings | 3,283 | 2,191 | 3,338 |
Equity attributable to shareholders of the parent | 5,614 | 4,491 | 5,644 |
LPA GROUP PLC
Interim Unaudited Group Results for the Six Months ended 31 March 2013
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
6 months to 31 March 2013 Unaudited £000's | 6 months to 31 March 2012 Unaudited £000's | Year to 30 Sept 2012 Audited £000's | |
Opening equity | 5,644 | 4,292 | 4,292 |
| |||
Total comprehensive income | 10 | 199 | 1,354 |
Transactions with owners: | |||
Dividends | (71) | (58) | (116) |
Proceeds from issue of shares | 20 | 51 | 97 |
Equity-settled share-based payments | 11 | 7 | 17 |
Closing equity | 5,614 | 4,491 | 5,644 |
LPA GROUP PLC
Interim Unaudited Group Results for the Six Months ended 31 March 2013
CONSOLIDATED CASH FLOW STATEMENT
6 months to 31 March 2013 Unaudited £000's | 6 months to 31 March 2012 Unaudited £000's | Year to 30 Sept 2012 Audited £000's | |
Profit for the period | 187 | 262 | 737 |
Finance costs | 282 | 284 | 578 |
Finance income | (291) | (280) | (534) |
Income tax expense | 25 | 50 | 140 |
Operating profit | 203 | 316 | 921 |
Adjustments for: | |||
Depreciation | 142 | 121 | 248 |
Amortisation of intangible assets | 13 | 10 | 25 |
Loss on sale of property, plant and equipment | - | - | 18 |
Non-cash charge for equity-settled share-based payments | 11 | 7 | 17 |
369 | 454 | 1,229 | |
Movements in working capital: | |||
Change in inventories | 142 | (246) | (288) |
Change in trade and other receivables | 320 | (285) | (769) |
Change in trade and other payables | (197) | 108 | 453 |
Cash generated from operations | 634 | 31 | 625 |
Income tax received | - | 18 | 18 |
Retirement benefits | (50) | (50) | (100) |
Net cash from operating activities | 584 | (1) | 543 |
Purchase of property, plant and equipment | (194) | (248) | (1,676) |
Proceeds from sale of property, plant and equipment | - | - | 25 |
Capitalised development expenditure | (17) | (8) | (19) |
Net cash from investing activities | (211) | (256) | (1,670) |
Drawdown of bank loans | - | - | 1,400 |
Repayment of bank loans | (73) | (146) | (291) |
Repayment of obligations under finance leases | (20) | (55) | (116) |
Interest paid | (47) | (21) | (56) |
Proceeds from issue of share capital | 20 | 51 | 97 |
Dividends paid | (71) | (58) | (116) |
Net cash from financing activities | (191) | (229) | 918 |
Net increase / (decrease) in cash and cash equivalents | 182 | (486) | (209) |
Cash and cash equivalents at start of the period | (873) | (664) | (664) |
Cash and cash equivalents at end of the period | (691) | (1,150) | (873) |
Reconciliation of cash and cash equivalents | As at 31 March 2013 Unaudited £000's | As at 31 March 2012 Unaudited £000's | As at 30 Sept 2012 Audited £000's |
Cash and cash equivalents in current assets | 7 | 5 | 7 |
Bank overdraft in current liabilities | (698) | (1,155) | (880) |
Cash and cash equivalents at end of the period | (691) | (1,150) | (873) |
NOTES
1 - BASIS OF PREPARATION
These interim consolidated financial statements are for the six months ended 31 March 2013. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 30 September 2012. These financial statements have been prepared under the historical cost convention, except for revaluation of financial instruments.
These consolidated interim financial statements have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year to 30 September 2012. These accounting policies are based on the recognition and measurement principles of IFRS as adopted by the European Union. The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these interim financial statements and are expected to be followed throughout the year ended 30 September 2013.
2 - EARNINGS PER SHARE
The calculations of earnings per share are based upon the profit after tax attributable to ordinary equity shareholders and the weighted average number of ordinary shares in issue during the period. Details are as follows:
6 months to 31 March 2013 Unaudited | 6 months to 31 March 2012 Unaudited | Year to 30 Sept 2012 Audited | |
Profit for the period - £000's | 187 | 262 | 737 |
Weighted average number of ordinary shares in issue during the period |
11.785m |
11.507m |
11.569m |
Dilutive effect of share options | 0.777m | 0.308m | 0.458m |
Number of shares for diluted earnings per share | 12.562m | 11.815m | 12.027m |
Basic earnings per share | 1.59p | 2.28p | 6.37p |
Diluted earnings per share | 1.49p | 2.22p | 6.13p |
3 - ANALYSIS OF NET DEBT
Bank loan £000's | Finance lease obligations £000's | Cash and cash equivalents £000's |
Net debt £000's | |
At 1 October 2012 | 1,473 | 20 | 873 | 2,366 |
Cash generated | - | - | (275) | (275) |
New finance lease obligations | - | 175 | - | 175 |
Repayment of borrowings | (73) | (20) | 93 | - |
At 31 March 2013 | 1,400 | 175 | 691 | 2,266 |
4 - INFORMATION
LPA Group plc is the Group's ultimate parent company. It is incorporated in England and Wales and domiciled in Great Britain. The address of LPA Group plc's registered office, which is also its principal place of business, is Tudor Works, Debden Road, Saffron Walden, Essex, CB11 4AN. LPA Group plc's shares are quoted on the AIM market of the London Stock Exchange.
LPA Group plc's consolidated interim financial statements are presented in Pounds Sterling (£'000), which is also the functional currency of the parent company. These consolidated interim financial statements have been approved for issue by the Board of Directors on 27 June 2013.
The financial information for the year ended 30 September 2012 set out in this interim report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The Group's statutory financial statements for the year ended 30 September 2012 have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain statements under Section 498(2) or Section 498(3) of the Companies Act 2006.
Summarised copies of this Interim Report are being sent to shareholders. Copies are also available from the Company's registered office at the above address and will be made available on the Company's website (www.lpa-group.com).