4th Jun 2007 07:01
Acal PLC04 June 2007 FOR RELEASE 7:00AM 4 JUNE 2007 ACAL plc (Leading pan-European, value-added technology based distributor providing specialist design-in, sales, marketing and other services) Announcement of Preliminary Results for the Year Ended 31 March 2007 £millions 2007 2006 Change----------------------------- -------- ------- -------Turnover - ongoing activities** £260.9m £257.0m + 1.5%----------------------------- -------- ------- -------EBIT* - ongoing activities £10.5m £9.9m +6.1%----------------------------- -------- ------- -------Profit before tax - ongoing activities (excluding exceptionals) £ 9.8m £8.6m + 14.0% - including disposed activities £ 14.8m £9.7m----------------------------- -------- ------- -------Basic earnings per share - ongoing activities (excluding exceptionals) 25.0p 19.6p +27.6% - including disposed activities 44.4p 22.3p----------------------------- -------- ------- -------Dividends per share - relating to year 21.9p 21.6p +1.4%----------------------------- -------- ------- ------- (* EBIT - Earnings before interest, tax, the Group's share of profit of associated companies and exceptional items) (** Disposed activities represent the sold AC&R business and ongoing activities represent the remaining business of the Group) • Sales of ongoing activities up 1.5% at £260.9m • Profit before tax and exceptionals of ongoing activities up 14.0% at £9.8m • EPS of ongoing activities before exceptionals up 27.6% at 25.0p • Electronics: Financial performance now benefiting from growing higher technology product portfolio • Parts Services: Weaker demand experienced in this division • IT Solutions: Major success in Networking and Security Products; stability in margins • Total dividends for year up 1.4% at 21.9p per share For further information:- Acal plc 01483 544500Tony Laughton - Chief Executive 01483 544500Jim Virdee - Finance Director 020 7367 5100Cubitt Consulting 020 7367 5100Brian Coleman-Smith 020 7367 5100James VerstringheLeanne Denman Notes to Editors: 1 Acal is a leading European technology based distributor providing specialist design-in, sales, marketing and other services through three divisions: Electronics, Parts Services and IT Solutions. Its value-added philosophy and geographic coverage enable Acal to provide specialist knowledge and support to customers on a pan-European basis. 2 Design-in is the process by which Acal's sales engineers work with customers and suppliers to procure components which meet the specific technical and performance needs of the customers. 3 Acal has operating companies in the UK, Netherlands, Belgium, Germany, France, Italy, Spain and Scandinavia. Westech Electronics, an associated company, is based in Singapore and covers the Far East region. CHAIRMAN'S STATEMENT Following the disposal of the Air Conditioning & Refrigeration business in July2006, the focus of the Company has been on implementing our strategy ofincreasing market share to achieve profitable growth. In October 2006, as partof the group's consolidation, Acal acquired the remaining minority interest inCPI and commenced the process of integration of its customer-facing activitieswith EAF, our other major Parts Services business. Sales of ongoing activities grew 1.5% to £260.9m despite an 8.8% fall in PartsServices. EBIT for the year grew by 6.1% to £10.5m reflecting significantimprovement in the performance of both Electronics and IT Solutions offsettingthe reduced profit in Parts Services. The Group's ongoing activities made a 40%return on average capital employed, before exceptional items, up from 31% forthe prior year. Costs have remained under close control across all businesses with furtherconsolidation of logistic and back office functions resulting in selectiveheadcount reductions. However, due to recent successes in mainland Europe wehave recruited additional staff in both Germany and Italy to address newElectronics business. Profit before taxation and exceptional items from ongoing activities grew by14.0% from £8.6m to £9.8m and the corresponding earnings per share increased27.6% to 25.0p. Dividend The Board is recommending a final dividend of 14.7p per share payable toshareholders on the register as at 15 June 2007. This, together with the interimdividend of 7.2p will make a total of 21.9p for the year, an increase of 1.4%. Board Composition and Governance There have been no changes to the composition of the Board or any of itsCommittees during the year. The Directors remain of the view that the Board, ascurrently constituted, is appropriate for a Company of Acal's size andincorporates a suitable balance of skills; the matter is, however, kept underreview. Acal continues to strive for high standards of corporate governance,full details of which are set out in the governance statement included as partof the Annual Report and Accounts. Employees To succeed in a competitive environment requires commitment and dedication fromstaff. We are fortunate at Acal to have a motivated, loyal and committedworkforce and I take this opportunity to thank them personally and on behalf ofthe Board for their continued hard work and support. Strategy and the Future The growth in sales and profits of our two largest divisions, Electronics and ITSolutions, has been very much in line with our plans and we continue to investin new resources, particularly in Electronics. The Parts Services business,after an excellent prior year, suffered this year as a result of weaker demandin the first half and a significant slowdown on a major contract. Whilst therecontinue to be major opportunities going forward, their timing remains difficultto predict. Our strategy remains unchanged: to concentrate on Europe, selectively to expandour supplier base in Electronics and IT Solutions and to extend our offerings tothe supply chain in Parts Services. We plan to continue our progress by growingour market share rather than relying on market growth. We strive for greater efficiency and continue to consolidate many administrativeand logistical functions across all three divisions. We continue to consider ways of enhancing shareholder value and whilst ourstrategy is primarily based upon organic growth we will consider selectiveacquisitions where they accelerate the delivery of this strategy. Richard Moon4 June 2007 CHIEF EXECUTIVE'S REVIEW The Group is a leading distributor of technology products and services for theelectronics and IT industries throughout Europe. Performance Review Table The performance of Acal's divisions in each of the years ended 31 March 2007 and2006 is set out below: 2007 2006 Sales EBIT* Sales EBIT* as % of as % of as % of as % of £m Group £m Sales £m Group £m Sales Electronics 107.6 41% 3.5 3.3% 104.0 41% 2.4 2.3% Parts Services 51.9 20% 3.0 5.7% 56.9 22% 5.2 9.1% IT Solutions 101.4 39% 4.0 3.9% 96.1 37% 2.3 2.4% ----- ------ ----- ------ ------ ------ ----- ----- 260.9 100% 10.5 4.0% 257.0 100% 9.9 3.9% ===== ====== ===== ====== ====== ====== ===== ===== * EBIT - Earnings before interest, tax, the Group's share of profit of associates and exceptional items, stated after full allocation of central costs. Last year saw an increase in both sales and profits in the two largestdivisions, Electronics and IT Solutions and a decline in Parts Services. Intotal the ongoing businesses, after the sale in July 2006 of the AirConditioning and Refrigeration Division, showed a small increase in sales, upfrom £257.0m to £260.9m. More significantly however, profit before taxation andexceptionals of ongoing activities is up 14.0% from £8.6m in the prior year to£9.8m. Again, this is due to the success of our Electronics and IT SolutionsDivisions. Electronics"The only Pan-European Demand Creation Distributor" Sales up 3.5% from £104.0m to £107.6mEBIT up 46% from £2.4m to £3.5m Although the UK market for passive and electromechanical components has beensomewhat soft, growth continues in this division with the success of our highertechnology products, primarily semiconductors, power and RF & wireless productswhich have been, and remain, a prime focus. Specialised semiconductors nowaccount for an increasing proportion of the division's sales. The major gainshave been in Continental Europe as the expansion of the product portfolio tookplace earlier there than in the UK. There has also been significant investmentin people, particularly in Germany and Italy where in the second half of theyear we have recruited in excess of twenty dedicated semiconductor staff. Thesecomprise Sales Directors, Field Sales Engineers, Application Engineers andProduct Managers. The restructuring process continues with further consolidation of the UK passiveand electromechanical components businesses: Radiatron has now merged with AcalTechnology. Logistics (primarily inventory) is being centralised into twoprincipal locations, one at Hook in the UK and the second in Eindhoven in theNetherlands. In line with the growth of our higher technology products our market share isincreasing, as too is our customer base which totalled nearly 9,500 Europe-wideby the end of the year. This, together with our emphasis on the design'pipeline' or funnel of prospects which continues to increase, provides a clearindication of projects and potential business in the future. Parts Services ('PS')"Europe's premier IT Parts Management Company" Sales down 8.8% from £56.9m to £51.9mEBIT down 42% from £5.2m to £3.0m After an excellent prior year, 2006/7 proved to be difficult, especially for CPIand particularly in the first half. This was as a consequence of weaker demand,some price erosion and cutbacks on a major contract. Despite this the divisionhas produced a creditable overall EBIT return of 5.7% of sales after theallocation of central costs. New "preferred supplier" arrangements are being agreed with several customersand the 'opportunity funnel' is stronger than ever, although it can typicallytake some while before these convert into new business. In addition, followingthe acquisition of the minority interest in CPI we have completed theintegration of the sales and business development teams of CPI and our othermajor UK IT parts operation, EAF. We are now better positioned to offer all thedivision's services to existing and prospective customers. IT Solutions"Europe's Niche IT Solutions Distributor" Sales up 5.5% from £96.1m to £101.4mEBIT up 74% from £2.3m to £4.0m The outstanding successes here have been Networking and Security product salesand Acal Value Added Services (AVAS), but across the whole spectrum of this divisionthe stabilisation, and in some cases improvement, of gross margins have had amajor influence. This margin improvement has come in part from a shift inproduct mix to devices which have more capability and intelligence, and in partfrom our focus of providing value added solutions which can command higher unitprices than discrete hardware and consequently better margins. The Headway document management business, which has experienced relatively flatsales year-on-year, improved its profitability and is now embarking upon anumber of new initiatives which fit closely with its core focus. Although itwould be premature to forecast growth at this stage, there is considerableoptimism that these will lead to both an increase in revenue and further marginimprovement. Similarly the Storage Networking business had flat sales but also improved itsprofitability significantly. Again, this is largely due to a gradual shift tomore advanced higher value products that command better margins. Lastly, Vertec, our medical imaging and instrumentation business, again put in astrong performance with an improvement in both sales and net margins. Vertec hasnow established an operation in South Africa with the same key suppliers that ithas worked with in the UK for many years. It is anticipated that this operationwill quickly move into profit, benefiting from the reputation of its keysuppliers and the market momentum behind private healthcare in that country. Associates Acal's major associate, Singapore-based Westech, in which we have a 36%shareholding, increased sales and profits in its year ended 31 December 2006with sales up 65% to S$330.2m and net profits up 69% to S$6.1m. Acal People Acal has a great team of people - enthusiastic, hardworking, motivated andalways prepared to go the extra yard for the customer. As importantly, they arevery supportive of the fact that change is the norm rather than the exception inour industries. This is a spirit which stands us in good stead for the futureand provides a great deal of confidence in our ability to succeed. I would like to express my appreciation and thanks to them all. Tony Laughton4 June 2007 FINANCE DIRECTOR'S REVIEW Results for the Year Following the sale of the Group's Air Conditioning and Refrigeration ("AC&R")business, which was announced in May 2006 and completed in July 2006, thatbusiness has been described as "disposed activities" and the remainder of theGroup's business as "ongoing activities" in the financial statements for theyear ended 31 March 2007. Sales of the Group's ongoing activities increased from £257.0m in 2006 to£260.9m for the year ended 31 March 2007, an overall increase of 1.5%. Thisoverall increase represented an increase of 3.5% for the Electronics division,an increase of 5.5% for the IT Solutions division and a decline of 8.8% for theParts Services division. Earnings before interest, tax, the Group's share ofassociated companies and exceptional items ("EBIT") increased from £9.9m in theprior year to £10.5m for the year ended 31 March 2007, an increase of 6.1%. Boththe Electronics and IT Solutions divisions showed significant increases in EBITof 46% and 74% respectively, but the Parts Services division decreased by 42%.Further information on each division's performance is set out in the ChiefExecutive's Review. Although most international business in the electronics industry is denominatedin US dollars, the principal exchange rate which affects the translation of theresults of the Group's non-UK activities is that between the Euro and Sterling.During the year under review sterling was, on average, marginally (0.6%)stronger against the Euro and 7.3% stronger against the US dollar as compared tothe previous year. Consequently variations in exchange rates had aninsignificant effect on the translation of Acal's sales and profits for the yearto 31 March 2007 relative to those for the prior year. Average gross margin for the Group's ongoing activities during the year to 31March 2007 was 25.4%, slightly ahead of 25.3% for the previous year. Whilst allactivities in the Electronics and IT Solutions divisions showed an improvementin gross margins, there was a decline in the Parts Services division resultingfrom a lower level of contracted business. Net operating expenses of the Group's ongoing activities, excluding exceptionalitems, were £55.6m for the year ended 31 March 2007 (2006: £55.2m). Although theaverage number of employees working in Acal's ongoing activities during thisperiod, at 954, was unchanged from that for the previous year, there wassignificant underlying change. There were some manning reductions in the passiveand electromechanical activities of the Electronics division and the PartsServices division, but we have continued to invest in additional resources tosupport the Group's strategy of expanding its specialist semiconductorportfolio, in particular the establishment of dedicated teams, togethercomprising over 20 members, for these products in Germany and Italy during thesecond half of the year. Overall the Group has continued to maintain goodcontrol over operating costs. The exceptional item of £0.4m in the year to 31 March 2007 represented therecovery of a receivable which was previously considered impaired and henceprovided against. In the prior year there were two exceptional items, a profitof £0.6m on sale of investments and the cost of £0.8m of withdrawing from partof the IT Solutions business. Acal's principal associated company is Westech Electronics Limited. Itdistributes electronic components throughout the Far East region, excludingJapan, and has its head office in Singapore. Westech's sales grew from S$255m(approximately £86.3m) for the year ended 31 March 2006 to S$321m (approximately£108m) for the year under review. In the corresponding periods the Group's shareof profits of associate companies, which under International Financial ReportingStandards is reported after tax, increased from £0.4m to £0.6m. Although interest rates were higher, average net debt during the year was lowerand accordingly net interest cost at £1.1m (before IAS19 financing cost of£0.2m) was lower than the previous year's figure of £1.6m (before IAS19financing cost of £0.1m). Thus net interest cost was covered 9.5 times (2006:6.2 times) by operating profit (before exceptional items) arising from theGroup's ongoing activities. The Group's effective tax rate for the year to 31 March 2007, calculated on thebasis of profit before taxation excluding the Group's share of post-tax profitfrom associates was 33.0% (2006: 33.8%). The table below explains the effect of the Group's disposed (AC&R) activities onthe results for the year. Before Tax After ------ --- ----- £m Tax Tax --- ---Trading profit for the period 0.4 (0.2) 0.2Profit on disposal 6.0 (0.1) 5.9Provision for retained obligations (1.8) 0.5 (1.3) --------- -------- --------- 4.6 0.2 4.8 ========= ======== ========= The retained obligations referred to in the table above related to people,properties and IT systems. In October 2006, Acal purchased the 28.4% minority interest in Computer PartsInternational Limited, which is part of the Parts Services division, for aconsideration of approximately £6.7m. Hence the minority interest in the Group'sprofit ceased to arise from that time onwards. Acal's earnings per share from ongoing activities, before exceptional items,were 25.0p for the year ended 31 March 2007 as compared to 19.6p for the yearbefore, an increase of 27.6%. Basic earnings per share, including disposedactivities, were 44.4p (2006: 22.3p). The interim and proposed final ordinary dividends in respect of the year to 31March 2007 will absorb £5.8m (2006: £5.7m). These are covered 2.0 times (2006:1.0 times) by basic earnings, including disposed activities, and 1.1 times(2006: 0.9 times) by earnings from ongoing activities before exceptional items. Working Capital and Balance Sheet The Group continues to place particular emphasis on the management of workingcapital. For this purpose it uses a model which compares each item of tradingassets to the three-month moving average of sales (TMMA). The table below showsthe target model in comparison to the actual achievement. Ongoing Activities 31 March 31 March -------- -------- Target 2007 2006 ------ ---- ---- TMMA TMMA TMMA ---- ---- ---- Ratio Ratio Ratio ----- ----- ----- Trading fixed assets 0.5 0.5 0.5 Current assets Stock 1.2 1.0 0.9 Debtors 2.3 2.4 2.4 Current liabilities Creditors (2.2) (2.5) (2.4) Tax (0.1) (0.1) (0.1) ------- ------- -------Total trading assets 1.7 1.3 1.3 ======= ======= ======= (Note: This trading assets model excludes goodwill, investments, non-current tax assets, net debt/cash and long-term liabilities). The above table shows, for example, that our target is for stock to represent1.2 months of sales and the actual level of stock at 31 March 2007 represented 1month of sales. The level of working capital at 31 March 2007 had benefited from a number ofshort-term factors which were not sustainable and reversed in the period afterthe year-end. This effect is estimated to have amounted to around £4m to £5m andwas reflected in the net debt of £5.4m (2006: £6.5m) at the year-end. Asreported last year there was a similar short-term benefit of between £8m to £9mat 31 March 2006. The Group's debt is provided principally under bilateral bank facilitiesnegotiated centrally in the UK and locally in territories where Acal operates.There are committed long-term facilities of £25m available to the Group as wellas short-term facilities which are used mainly for working capital requirements. Capital expenditure for the year to 31 March 2007 was £2.2m (2006: £2.5m) andthe charge to profits in respect of depreciation and amortisation of fixedassets amounted to £3.1m (2006: £3.2m) for the same period. It has always been Acal's policy that its pension schemes should be of thedefined contribution type so that the extent of the Group's financialliabilities can be clearly ascertained. However, when Sedgemoor Limited, then alisted public company, was acquired in June 1999, it brought with it certaindefined benefit schemes, the principal one of which was the Sedgemoor GroupPension Fund (together "the Sedgemoor Scheme"). Soon after acquisition theSedgemoor Scheme was curtailed and all future service accrual ceased. Atriennial actuarial valuation of the Sedgemoor Scheme was conducted as at 31March 2006. At that date the gross pension liability under IAS19 was £9.1m andnet of the relevant deferred tax it was £6.4m. Primarily as a result of movements in bond yields, but also the contributionsmade since then, the gross liability at 31 March 2007 was £7.4m and net of therelevant deferred tax it was £5.2m. Shareholders funds at 31 March 2007 were £75.8m (2006: £69.9m), the improvementfrom last year primarily reflecting retained earnings. Net debt at that daterepresented 7.1% of shareholders funds as compared to 9.3% a year earlier. Return on Capital Employed Return on average capital employed of the Group's ongoing activities, which iscalculated using operating profit before exceptional items and net assetsexcluding goodwill but adding back net debt, was 40% for the year to 31 March2007 as compared to 31% for the year before. Jim Virdee4 June 2007 consolidated income statementfor the year to 31 March 2007 Ongoing Disposed 2007 2006 activities activities (note 7) TotalContinuing operations Note £m £m £m £m Revenue 4 260.9 - 260.9 257.0---------------------- ------- ------- ------- ------- --------Operatingprofit 10.9 (1.8) 9.1 9.7---------------------- ------- ------- ------- ------- --------Analysed between: Operating profit beforeexceptional items 10.5 - 10.5 9.9Exceptional items - provisionfor retained obligations 5,7 - (1.8) (1.8) - Exceptional items - recovery of impaired receivable 5 0.4 - 0.4 -Exceptional items - profit on disposal ofinvestments 5 - - - 0.6 Exceptional items - product withdrawal costs 5 - - - (0.8)---------------------- ------- ------- ------- ------- --------Share ofpost-taxprofits fromassociates 3 0.6 - 0.6 0.4Finance costs (1.7) - (1.7) (2.3)Finance income 0.4 - 0.4 0.6---------------------- ------- ------- ------- ------- --------Profit beforetaxation 10.2 (1.8) 8.4 8.4---------------------- ------- ------- ------- ------- --------Analysed between:Profit beforetaxationbeforeexceptionalitems 9.8 - 9.8 8.6Exceptionalitems -provision forretainedobligations 5,7 - (1.8) (1.8) -Exceptionalitems -recovery ofimpairedreceivable 5 0.4 - 0.4 -Exceptionalitems - profiton disposal ofinvestments 5 - - - 0.6Exceptionalitems -productwithdrawalcosts 5 - - - (0.8)---------------------- ------- ------- ------- ------- --------Taxation 3 (3.1) 0.5 (2.6) (2.7)---------------------- ------- ------- ------- ------- --------Analysed between:Taxationbeforeexceptionalitems (3.0) - (3.0) (2.8)Exceptionalitems -taxationcredit arisingconsequent onthe disposal 3 - 0.5 0.5 -Exceptionalitems -taxationcharge arisingon recovery ofimpairedreceivable (0.1) - (0.1) -Exceptionalitems -taxationcharge arisingon profit ondisposal ofinvestments - - - (0.1)Exceptionalitems -taxationcredit arisingon productwithdrawalcosts - - - 0.2---------------------- ------- ------- ------- ------- --------Profit aftertaxation forthe year fromcontinuingoperations 7.1 (1.3) 5.8 5.7Discontinued operationsProfit for theyear fromdiscontinuedoperations 7 - 6.1 6.1 0.9---------------------- ------- ------- ------- ------- --------Profit for theyear 7.1 4.8 11.9 6.6---------------------- ------- ------- ------- ------- -------- Attributable to:Equity holdersof the parent 11.7 6.0Minorityinterests 0.2 0.6---------------------- ------- ------- ------- ------- -------- 11.9 6.6 ---------------------- ------- ------- ------- ------- -------- Earnings per share (note 9)Continuing operationsBasic - including exceptional items 26.1p (4.8p) 21.3p 19.1p - excluding exceptional items 25.0p - 25.0p 19.6pDiluted - including exceptional items 26.1p (4.8p) 21.3p 19.1p - excluding exceptional items 25.0p - 25.0p 19.6p ---------------------- ------- ------- ------- ------- --------Including discontinuedoperationsBasic 44.4p 22.3pDiluted 44.4p 22.3p---------------------- ------- ------- ------- ------- -------- DividendsDividends pershare declaredin respect ofyear 21.9p 21.6pDividends pershare paid inyear 21.6p 21.6pDividends paidin year £5.7m £5.7m---------------------- ------- ------- ------- ------- -------- consolidated balance sheet at 31 March 2007 ------------------------- --------- ---------- 2007 2006 £m £m ------------------------- --------- ----------Non-current assetsProperty, plant and equipment 6.3 6.7Goodwill 53.5 48.8Intangible assets - software 3.9 4.8Investments in associates 5.0 4.7Other financial assets 0.3 0.3Deferred tax assets 4.0 4.0------------------------- --------- ---------- 73.0 69.3 ------------------------- --------- ----------Current assetsInventories 23.7 21.4Trade and other receivables 58.8 58.0Current tax assets 0.4 1.7Cash and cash equivalents 11.9 16.9------------------------- --------- ---------- 94.8 98.0Current liabilitiesTrade and other payables (58.9) (58.0)Short-term borrowings (7.2) (11.2)Current tax liabilities (2.8) (3.7)Provisions (2.1) (1.0)------------------------- --------- ---------- (71.0) (73.9) ------------------------- --------- ----------Net current assets 23.8 24.1 Assets of discontinued operations classified as held forsale - 6.2 Non-current liabilitiesLong-term borrowings (10.1) (12.2)Pension liability (7.4) (9.1)Deferred tax liabilities (1.6) (1.8)Provisions (1.9) (0.7)------------------------- --------- ---------- (21.0) (23.8) ------------------------- --------- ---------- Liabilities of discontinued operations classified as heldfor sale - (4.1) ------------------------- --------- ----------Net assets 75.8 71.7------------------------- --------- ---------- EquityShare capital 1.3 1.3Share premium account 38.0 38.0Share scheme reserve 0.3 0.2Other reserves 1.2 1.8Retained earnings 35.0 28.6------------------------- --------- ----------Equity attributable to equity holders 75.8 69.9of the parentMinority interests - 1.8------------------------- --------- ----------Total equity 75.8 71.7------------------------- --------- ---------- consolidated cash flow statementfor the year to 31 March 2007 ----------------------------- --------- --------- 2007 2006 £m £m ----------------------------- --------- --------- Profit for the year 11.9 6.6Taxation expense (includes £0.3m (2006: £0.4m) fromdiscontinued operations) 2.9 3.1Share of results of associates (0.6) (0.4)Net finance costs 1.3 1.7Depreciation of property, plant and equipment 1.9 2.1Amortisation of intangible assets - software 1.2 1.1Change in provisions 2.3 0.7Gain on disposal of investments (6.0) (0.6)Gain on disposal of property, plant and equipment - (0.1)Pension scheme funding (1.0) (0.7)Equity-settled share-based payment expense 0.1 0.1----------------------------- --------- ---------Operating cash flows before changes in working capital 14.0 13.6----------------------------- --------- ---------(Increase)/decrease in inventories (2.5) 2.1Increase in trade and other receivables (1.9) (5.7)Increase in trade and other payables 1.6 5.9----------------------------- --------- ---------(Increase)/decrease in working capital (2.8) 2.3----------------------------- --------- ---------Cash generated from operations 11.2 15.9Interest paid (1.5) (2.1)Income taxes paid (3.4) (2.9)----------------------------- --------- ---------Net cash flows from operating activities 6.3 10.9----------------------------- --------- ---------Cash flows from investing activitiesAcquisition of shares in subsidiaries (6.7) (0.4)Proceeds from sale of subsidiaries 8.3 -Net overdrafts disposed of with subsidiaries 0.4 -Proceeds from sale of investments - 2.5Purchases of property, plant and equipment (1.8) (2.2)Proceeds from sale of property, plant and equipment andintangibles 0.2 0.3Purchases of intangible assets (0.4) (0.3)Interest received 0.4 0.6Dividends received from associates 0.2 0.1----------------------------- --------- ---------Net cash inflow from investing activities 0.6 0.6----------------------------- --------- ---------Cash flows from financing activitiesRepayments of borrowings (7.1) (3.1)Dividends paid to company's shareholders (5.7) (5.7)Dividends paid to minority interests (0.1) ------------------------------ --------- ---------Net cash outflow from financing activities (12.9) (8.8)----------------------------- --------- ---------Net (decrease)/increase in cash and cash equivalents (6.0) 2.7Cash and cash equivalents at 1 April 10.8 8.0Effect of exchange rate fluctuations - 0.1----------------------------- --------- ---------Cash and cash equivalents at 31 March 4.8 10.8----------------------------- --------- --------- ----------------------------- --------- ---------Reconciliation to cash and cash equivalents in the balancesheetCash and cash equivalents shown above 4.8 10.8Add back overdrafts 7.1 6.1----------------------------- --------- ---------Cash and cash equivalents shown within current assets inthe 11.9 16.9balance sheet --------- -------------------------------------- consolidated statement of recognised income and expensefor the year to 31 March 2007 -------------------------- --------- -------- 2007 2006 £m £m -------------------------- --------- --------Actuarial profit/(loss) on defined benefit pension scheme 0.9 (3.4)Deferred tax relating to pension scheme (0.5) 0.8Investments - cumulative fair value adjustments taken toincome statement on disposal - (0.4)Foreign currency translation differences (0.6) 0.7-------------------------- --------- --------Net income and expense recognised directly in equity (0.2) (2.3)Profit for the year 11.9 6.6-------------------------- --------- --------Total recognised income and expense for the year 11.7 4.3Restatement for the effects of IAS 32 and 39 (i) - 0.4-------------------------- --------- --------Total recognised income and expense 11.7 4.7-------------------------- --------- -------- Total recognised income and expense attributable to:Equity holders of the parent 11.5 4.1Minority interests 0.2 0.6-------------------------- --------- -------- 11.7 4.7 -------------------------- --------- -------- (i) On 1 April 2005, the balance sheet was restated for the effects of IAS 32and 39. reconciliation of movements in shareholders' equityfor the year to 31 March 2007 -------------------------- --------- -------- 2007 2006 £m £m -------------------------- --------- --------Shareholders' equity at start of year 69.9 71.3Total recognised income and expense 11.5 4.1Dividends (5.7) (5.7)Share-based payments 0.1 0.1Movements in associates' reserves - 0.1-------------------------- --------- --------Shareholders' equity at end of year 75.8 69.9-------------------------- --------- -------- Notes to the preliminary statement for the year ended 31 March 2007 1 Publication of non-statutory accounts The preliminary results were approved by the Board on 4 June 2007. The financialinformation set out above does not constitute the Company's statutory accountsfor the years ended 31 March 2007 or 2006, but is derived from those accounts.Statutory accounts for 2006 have been delivered to the Registrar of Companieswhereas those for 2007 will be delivered following the Company's Annual GeneralMeeting. The auditors have reported on those accounts; their reports wereunqualified and did not contain a statement under section 237 (2) or (3) of theCompanies Act 1985. 2 Basis of preparation The Group's financial statements have been prepared in accordance withInternational Financial Reporting Standards (IFRS) as adopted for use in theEuropean Union and as applied in accordance with the provisions of the CompaniesAct 1985. 3 Segmental analysis Year to 31 March 2007 ---------- ------- ------ ------- -------- -------- --------- -------- Electronics £m Parts Services IT Solutions £m Unallocated Total ongoing Disposed Total activities activities operations £m £m £m £m £m ---------- ------- ------ ------- -------- -------- --------- --------Revenue 107.6 51.9 101.4 - 260.9 5.3 266.2---------- ------- ------ ------- -------- -------- --------- -------- Segment 5.2 3.8 5.6 (3.7) 10.9 0.4 11.3resultProvisionforretained - - - - - (1.8) (1.8)obligationsProfit ondisposal ofactivities - - - - - 6.0 6.0Net financecosts - - - (1.3) (1.3) - (1.3)Share ofpost-taxprofits ofassociates 0.6 - - - 0.6 - 0.6---------- ------- ------ ------- -------- -------- --------- --------Profitbefore 5.8 3.8 5.6 (5.0) 10.2 4.6 14.8taxationTaxation (3.1) 0.2 (2.9)---------- ------- ------ ------- -------- -------- --------- --------Profit forthe 7.1 4.8 11.9year ------- ------ ------- -------- -------- --------- ------------------ The figures for total operations in the table above may be analysed betweencontinuing and discontinued operations as follows: ------------ -------- --------- -------- Continuing Discontinued Total operations operations operations £m £m £m ------------ -------- --------- --------Revenue 260.9 5.3 266.2------------ -------- --------- -------- Segment result 10.9 0.4 11.3Provision forretainedobligations (1.8) - (1.8)Profit ondisposal ofsubsidiaries - 6.0 6.0Net financecosts (1.3) - (1.3)Share ofpost-taxprofits ofassociates 0.6 - 0.6------------ -------- --------- --------Profit beforetaxation 8.4 6.4 14.8Taxation (2.6) (0.3) (2.9)------------ -------- --------- --------Profit for theyear 5.8 6.1 11.9------------ -------- --------- -------- Year to 31 March 2006 ---------- ------- ------ ------- -------- -------- --------- -------- Electronics £m Parts Services IT Solutions £m Unallocated Total Discontinued Total continuing activities operations activities £m £m £m £m £m ---------- ------- ------ ------- -------- -------- --------- --------Revenue 104.0 56.9 96.1 - 257.0 18.4 275.4---------- ------- ------ ------- -------- -------- --------- -------- Segment 3.5 6.0 3.6 (3.2) 9.9 1.3 11.2resultProfit ondisposal ofinvestments - - - 0.6 0.6 - 0.6Productwithdrawalcosts - - (0.8) - (0.8) - (0.8)Net financecosts - - - (1.7) (1.7) - (1.7)Share ofpost-taxprofits ofassociates 0.4 - - - 0.4 - 0.4---------- ------- ------ ------- -------- -------- --------- --------Profitbefore 3.9 6.0 2.8 (4.3) 8.4 1.3 9.7taxationTaxation (2.7) (0.4) (3.1)---------- ------- ------ ------- -------- -------- --------- --------Profit forthe 5.7 0.9 6.6year ------- ------ ------- -------- -------- --------- ------------------ 4 Geographic analysis of revenue by destination 2007 2006 £m £mUnited Kingdom 99.1 114.0Continental Europe 154.3 136.8Rest of the World 7.5 6.2------------------------ ----------- ------- 260.9 257.0 ------------------------ ----------- ------- 5 Exceptional items 2007 2006 £m £mOther operating income:Recovery of impaired receivable 0.4 -Profit on disposal of investments - 0.6------------------------ ----------- ------- 0.4 0.6 ------------------------ ----------- ------- Other operating expenses: - (0.8)Product withdrawal costsProvision for retained obligations (1.8) ------------------------- ----------- ------- 6 Acquisition of minority interest On 13 October 2006, the Company acquired the remaining 28.4% minority interestin Computer Parts International Limited for a consideration of £6.7 million. 7 Disposed activities On 25 May 2006, the Company announced the disposal of its air conditioning andrefrigeration business. The disposal was completed on 3 July 2006 for a cashconsideration of £8.3 million. The effect of the disposal during the year is as follows: £m --------------------------- ----------------Sale proceeds 8.3Total net assets sold (2.3)--------------------------- ---------------- 6.0Tax effect of disposal (0.1)--------------------------- ----------------Profit on disposal 5.9--------------------------- ---------------- In addition a provision of £1.8m has been made to cover certain obligations ofthe disposed activities which have been retained by the Group. These obligationsrepresent costs relating to people, properties and impairment of IT systems. Profit from discontinued operations comprises: ---------------------------- --------- --------- Year ended Year ended 31 Mar 2007 31 Mar 2006 £m £m ---------------------------- --------- ---------Profit on disposal of discontinued operations 5.9 -Profit for the year from trading of discontinuedoperations 0.2 0.9---------------------------- --------- ---------Profit for the year from discontinued operations 6.1 0.9---------------------------- --------- ---------- 8 Dividends The Directors have proposed a final dividend of 14.7 pence per share, payable on25 July 2007 to shareholders on the register at 15 June 2007. In accordance withIAS 10, this dividend has not been reflected in the balance sheet at 31 March2007. The amount of this final dividend is £3.9 million. An interim dividend of7.2 pence per share was paid in January 2007, and the cost of this dividend was£1.9 million. 9 Earnings per share Basic earnings per share are calculated by dividing the net profit for the yearattributable to ordinary shareholders of the Company by the weighted averagenumber of ordinary shares outstanding during the year. Diluted earnings per share are the basic and adjusted earnings per share afterallowing for the dilutive effect of the conversion into ordinary shares of theweighted average number of options outstanding during the year. The following reflects the income and share data used in the basic and dilutedearnings per share calculations: 2007 2006 million millionWeighted average number of shares for basic earnings pershare 26.4 26.4Effect of dilution - share options - --------------------------------- ---------- -------Adjusted weighted average number of shares for dilutedearnings per share 26.4 26.4-------------------------------- ---------- ------- 2007 2006 £m £mProfit attributable to equity holders of the parent 11.7 6.0-------------------------------- ---------- ------- 10 Reconciliation of net cash flow to movements in net debt 2007 2006 £m £mNet (decrease)/increase in cash and cash equivalents (6.0) 2.7Cash outflow from decrease in debt 7.1 3.0Effect of exchange rate fluctuations - 0.1------------------------ -------- -------- Decrease in net debt 1.1 5.8 Net debt at beginning of the year (6.5) (12.3)------------------------ -------- -------- Net debt at end of the year (5.4) (6.5)------------------------ -------- -------- 11 Annual Report and Accounts The Annual Report and Accounts will be mailed to shareholders on or before 20June 2007. Copies will also be available from: - Acal plc 2 Chancellor Court Occam Road Surrey Research Park Guildford GU2 7AH The results will not be advertised in any newspaper Ends This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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