Solid State Regulatory News (SOLI)

28 Dec 2005 09:51

Solid State Supplies PLC28 December 2005 Solid State Supplies plc Unaudited Interim Results for the six months ended 30 September 2005 Chairman's Statement Results The unaudited pre-tax profits for the Group for the six months ended 30September 2005 was £131,000 (2004: £130,000) on a turnover of £5,010,000 (2004:£4,472,000). The basic earnings per share amounted to 1.6p (2004: 1.3p). Thepre-tax profit is stated after goodwill amortisation of £22,000 (2004: £17,000). Trading Review Solid State Supplies The component distribution market in the UK continues to be challenging. AFDEC,our industry association, have recently announced that the Industrialdistribution market is expected to decline by 10.8% in 2005, with a forecasteddecline of 2.4% in 2006. Against this background we have recently taken stepsto reduce costs and will continue to keep this under active review. Our compliance programme in relation to the Restriction of Hazardous Substancescontinues and we remain focused on managing our non compliant stock to minimizethe impact of the directive due to come into force on 1 July 2006. Despite difficult market conditions, bookings have improved in recent months andas at 30 November our book to bill ration stood at 1.06 to 1.00. Our highreliability and connectivity markets remain strong and we expect this to bereflected in our results for the next financial year. Steatite and Wordsworth There has been an improvement in both turnover and profit as expected, due tothe shipment and growth of sales in the European Space Programme. Whilst themarket remains flat, additional sales and thus revenue are expected during thesecond half of the year through focused sales, campaigns and margin enhancement. With the re-organisation of Steatite and Wordsworth we will consolidate ourlogistics, warehousing, manufacturing, back office and support functions, withan associated reduction in headcount, to improve efficiency and effectiveness.Although it is not expected that market conditions will improve in the shortterm it is expected that a consolidated business will return a betterperformance, during 2006. Summary The group will incur significant non-recurring costs in particular in relationto staff redundancies during the second half year with the relocation ofWordsworth to our Steatite premises at Redditch. However, following thisre-organisation the board believes we will be in a strong position which will bereflected in the results for 2006/2007 and beyond. Dividends In anticipation of the significant non-recurring costs which will be incurred inthe next few months, the directors have decided to declare an interim dividendof 0.5p per share, compared with 1.5p per share last year. The interim dividendwill be paid on 30 January 2006 to shareholders on the register at close ofbusiness on 13 January 2006. Conclusion I would like to thank my fellow directors and all the staff of the group fortheir support over the past six months. Peter HainingChairman28 December 2005 Interim consolidated profit and loss accountfor the six months ended 30 September 2005 Unaudited Unaudited Audited Six months to Six months to Year to 30 Sept 2005 30 Sept 2004 31 Mar 2005 £'000 £'000 £'000 Turnover 5,010 4,742 9,480 Cost of sales (3,525) (3,319) (6,698) -------------- -------------- --------------Gross profit 1,485 1,423 2,782 -------------- -------------- -------------- Selling expenses and distribution costs (619) (571) (1,181) Administrative expenses (708) (687) (1,280) -------------- -------------- -------------- (1,327) (1,258) (2,467) -------------- -------------- -------------- Operating profit 158 165 315 Other income 1 - 2 Interest payable (28) (35) (2) -------------- -------------- --------------Profit on ordinary activities before taxation 131 130 315 Tax on profit on ordinary activities (33) (48) (79) -------------- -------------- -------------- PROFIT FOR THE FINANCIAL PERIOD 98 82 236 -------------- -------------- -------------- RECONCILIATION OF MOVEMENT IN SHARHOLDERS' FUNDS Opening shareholders funds as previously 2,076 2,089 2,089reportedPrior year adjustments re proposed dividends 123 124 124 -------------- -------------- --------------Opening shareholders' funds as restated 2,199 2,213 2,213Profit for the financial period 98 82 236 Dividends Paid (123) (124) (218)Purchase of own shares - - (33) -------------- -------------- --------------Closing shareholders' funds 2,174 2,171 2,198 -------------- -------------- --------------Earnings per shareBasic 1.6p 1.3p 3.8pDiluted 1.5p 1.3p 3.8p All amounts relate to continuing operations. Consolidated Balance Sheet as at 30 September 2005 Unaudited Unaudited Audited As at As at As at 30 Sept 2005 30 Sept 2004 31 Mar 2005 £'000 £'000 £'000 FIXED ASSETSIntangible assets 1,623 615 596Tangible assets 471 492 415 -------------- -------------- -------------- 2,094 1,107 1,011 -------------- -------------- -------------- CURRENT ASSETSStock 1,483 1,383 1,091Debtors 1,982 1,700 1,941Cash at bank and in hand 117 199 109 -------------- -------------- -------------- 3,582 3,282 3,141 -------------- -------------- -------------- CREDITORSAmounts falling due within one year (2,780) (1,815) (1,600) -------------- -------------- -------------- NET CURRENT ASSETS 802 1,467 1,541 -------------- -------------- -------------- TOTAL ASSETS LESS CURRENT LIABILITIES 2,896 2,574 2,552 -------------- -------------- -------------- CREDITORSAmounts falling due after more than one year (722) (403) (354) -------------- -------------- -------------- 2,174 2,171 2,198 -------------- -------------- --------------CAPTIAL AND RESERVESShare capital 308 311 308Capital redemption reserve 5 1 5Share premium account 757 757 757Profit and loss account 1,104 1,102 1,128 -------------- -------------- --------------SHAREHOLDERS' FUNDS - EQUITY 2,174 2,171 2,198 -------------- -------------- -------------- CONSOLIDATED CASH FLOW STATEMENT for the six months ended 30 September 2005 Unaudited Unaudited Audited Six months to Six months to Year to 30 Sept 2005 30 Sept 2004 31 Mar 2005 £'000 £'000 £'000 Net cash inflow from operating activities 907 580 674 Return on investments and servicing of finance:Interest received 1 - 2Interest paid (28) (35) (2) -------------- -------------- --------------Net cash (outflow) (27) (35) - -------------- -------------- --------------Taxation:Corporation tax paid - - (72) -------------- -------------- --------------Net cash (outflow) - - (72) -------------- -------------- -------------- Capital expenditure and financial investment:Payments to acquire tangible fixed asset (54) (49) (80)Receipts from sales of tangible fixed assets 7 12 26 -------------- -------------- --------------Net cash (outflow) (47) (37) (54) -------------- -------------- -------------- Acquisitions and disposalsPurchase of business operation (1,833) - - -------------- -------------- --------------Net cash (outflow) (1,833) - (3) -------------- -------------- --------------Equity dividend paid (123) (124) (218) -------------- -------------- --------------Net cash inflow/(outflow) before financing (1,123) 384 330 -------------- -------------- -------------- Financing:Medium term loan received 500 - -Repayments of medium term loan (56) (60) (108)Hire purchase finance repaid: capital element - (2) (32)Invoice discounting finance received (netmovement) 308 (192) (123)Purchase of own shares - - (34) -------------- -------------- --------------Net cash inflow/(outflow) 752 (254) (297) -------------- -------------- --------------Increase/(decrease) in cash (371) 130 33 -------------- -------------- -------------- NOTES TO THE INTERIM REPORT 1. Basis of preparation of interim financial information The interim financial statements have been prepared on the basis of accountingpolicies expected to be adopted in the Financial Statements for the year ending31 March 2006. Following implementation of Financial Reporting Standard 21dividends are only recognised in the period in which a binding obligation forpayment arises. The effects of this change are set out in the Reconciliation ofMovement in Shareholders' Funds on page 3. The unaudited financial statements donot constitute statutory accounts within the meaning of Section 240 of theCompanies Act 1985. Statutory accounts for year ended 31 March 2005 have beenfiled with the Registrar of Companies. The Auditors' Report on these accountswas unqualified. 2. Earnings per share The earnings per share figures are based on the profit on ordinary activitiesafter taxation as stated in the unaudited profit and loss account and theweighted average number of shares in issue during each period. The weightedaverage number of shares in issue during the period was 6,156,511 for the sixmonths ended 30 September 2005, 6,207,342 for the year ended 31 March 2005 and6,225,000 for the six months ended 30 September 2004. The calculation of dilutedearnings per share was based on 6,476,511 for the six months ended 30 September2005, 6,207,342 for the year ended 31 March 2005 and 6,225,000 for the sixmonths ended 30 September 2004. 3. Reconciliation of operating profits to net cash inflow from operatingactivities Unaudited Unaudited Audited Six months to Six months to Year to 30 Sept 2005 30 Sept 2004 31 Mar 2005 £'000 £'000 £'000 Operating profit 158 165 315Amortisation of intangible fixed assets 22 17 35Depreciation charges 68 86 177Loss on disposal of fixed assets 5 5 8Decrease/(Increase) in stocks (142) (126) 166Decrease in debtors 648 327 86Increase/(decrease) in creditors 148 106 (113) ---------------- ---------------- ----------------Net cash inflowfrom operating activities 907 580 674 ---------------- ---------------- ---------------- 4. Analysis and reconciliation of net cash Audited Acquisition Unaudited 31 Mar 2005 £ Cash flow 30 Sept 2005 £'000 £'000 £'000 £'000 Cash at bank and in hand 109 235 (227) 117Bank overdrafts (6) - (144) (150) ---------------- ---------------- ---------------- ---------------- 103 235 (371) (33) ---------------- ---------------- ---------------- ---------------- 5. Acquisition On 10 August 2005, the Group acquired the entire share capital ofWordsworth Technology Limited. The acquisition was for a consideration of£1,832,567 paid by cash and financed from existing cash reserves and borrowingsfrom the bank in the form of a loan for £500,000 repayable over three years. Incalculating the goodwill arising on the acquisition, the fair value of the netassets has been assessed and adjustments from book value have been made wherenecessary. These adjustments are summarised in the following table: Book Value Adjustment Fair Value £,000 £'000 £'000 Tangible fixed assets 82 82Stock 250 250Debtors 689 689Cash at bank 235 235Trade creditors (319) 319Corporation tax (135) (11) (146) ---------------- ---------------- ---------------- 802 (11) 791 ---------------- ---------------- ---------------- The adjustments in respect of corporation tax arise as a result of a highercorporation tax rate applying to the company's pre-acquisition profits as aresult of it joining the Group. Cash consideration (including expenses of £52k) 1,833,000Net assets acquired 791,000 -----------------Goodwill arising on acquisition £1,042,000 ----------------- 6. Further copies of this document are available both at the registeredoffice of the Company and from the offices of Charles Stanley & Company Limited,25 Luke Street, London, EC2A 4AR. This information is provided by RNS The company news service from the London Stock Exchange