13th Oct 2014 07:27
LONDON (Alliance News) - Acal PLC Monday said first-half sales were up 20% on the year, driven mainly by acquisitions, although it also took a significant hit from the strength of sterling.
In a trading update, the electronics manufacturer said its sales were up 27% on the year in the six months to end-September at constant currency rates. Its like-for-like sales, which are at constant currencies and exclude the impact of acquisitions, were up 3%. Acquisitions Noratel, YEG and RSG contributed the remaining 24% of the increase.
Gross margins were also ahead of last year, and it expected to report strong growth in its underlying first-half earnings.
Its design & manufacturing businesses experienced continued "healthy" like-for-like sales growth, whilst the custom distribution businesses saw improving demand, driven by Germany and Italy in particular. The UK distribution market remains slow, it said.
Orders continued to grow in all territories and businesses, other than the UK, Acal said, and were up 19% at constant exchange rates. Like-for-like orders were down slightly when excluding a large one off order last year and up 4% excluding UK distribution, it added.
Acal bought Noratel in July, and said it was performing in line with its expectations. Cross-selling programmes are underway between Acal's three magnetics businesses, which includes Noratel, and that has led to the first design opportunity being won. Also, Myrra products have been included in a Noratel customer contract with a global healthcare provider to supply custom design products which is expected to generate new revenue in the years ahead, Acal said.
The company also started restructuring its Acal BFi UK sales and marketing team to enable more efficient integration of web-generated sales opportunities into the sales organisation. This follows the successful integration of YEG into Acal BFi UK in April after its acquisition in August 2013.
RSG, the Frankfurt-based power solutions supplier acquired in December 2013, is also performing well and as expected, Acal said.
"Together with the acquisition of Noratel, we expect to report strong growth in first half underlying group earnings, in line with our expectations," the company said.
Acal reported revenue of GBP113.4 million, underlying operating profit of GBP3.8 million, and underlying pretax profit of GBP3.4 million in the first half of its last financial year. Underlying earnings strip out exceptional costs and amortisation of acquired intangibles.
It expects to release its half-year results on November 27.
Acal shares were flat at 230.50 pence early Monday.
By Steve McGrath; [email protected]; @stevemcgrath1
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