6th Jun 2005 07:00
Acal PLC06 June 2005 FOR RELEASE 7:00 AM 6 JUNE 2005 ACAL plc (Leading pan-European, value-added, technology based distributor providing specialist design-in, sales and marketing services) Announcement of Preliminary Results for the Year Ended 31 March 2005 2005 2004 Change (restated)Turnover £260.7m £268.4m -3%-------------------------------------------------------------------------------EBITA* (pre associated companies) £12.7m £14.0m -9%------------------------------------------------------------------------------- Profit before tax:- Before goodwill amortisation £11.3m £11.9m -5% Before goodwill amortisation and £11.3m £12.5m -10%exceptionals After goodwill amortisation £8.3m £9.0m -8%-------------------------------------------------------------------------------Earnings per share:- Before goodwill amortisation 26.9p 29.0p -7% After goodwill amortisation 15.3p 17.9p -15-------------------------------------------------------------------------------Dividends per share 21.6p 21.0p +3%------------------------------------------------------------------------------- • 9% growth in sales in the Components Divisions with EBITA* up 8% • Offset by 11% reduction in sales and 18% reduction in EBITA* in the IT Divisions • Underlying sales stable compared to last year (at constant exchange rates and eliminating the effects of acquisition and closed activities) • Improved gross margins: up at 26.6% overall from 25.9% last year • Pre-tax return of 36% on average capital employed • Further dividend growth: up 3% at 21.6p per share • Acal is well positioned to take advantage of opportunities for extending product and service offerings (* EBITA = Operating profit excluding amortisation of goodwill and the Group's share of operating profit of associates) Commenting on the results Richard Moon, the Chairman said:- "2004/05 has been a mixed year with a strong performance by the ComponentsDivisions and weak results from the IT Divisions. However, improved grossmargins and a 36% return on capital employed provide a sound basis to build uponas our focus on demand creation and value-added distribution is producingopportunities for us to extend our product and service offerings." For further information:- Tony Laughton - Chief Executive Tel: 01483 544500Jim Virdee - Finance Director Tel: 01483 544500Brian Coleman-Smith/Jo Clewlow/Nia Thomas - Beattie Financial Tel: 020 7053 6400 Notes to Editors:- 1 The Acal Group is a leading European, value-added distributor providing specialist design-in, sales and marketing services for international suppliers in the fields of Electronic Components, IT Products, IT Parts Services and Industrial Controls. Its value-added philosophy and geographic coverage enables 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, Scandinavia and the USA. Westech Electronics, an associated company, is based in Singapore and covers the Far East region. CHAIRMAN'S STATEMENT Since being appointed Chairman on 1 April I have spent time getting to know Acaland considering how, working with the Board, I can best add value for ourshareholders. Put simply this involves framing the appropriate strategy for theGroup, ensuring the right team is in place to deliver it and monitoring theteam's performance against it. In addition we need to maintain high standards inour corporate governance and integrity whilst promoting effective and opencommunications, both within the Board and in the Group as a whole. Turning to last year, the Group has continued to operate in the difficulteconomic climate and demanding market conditions which have characterised recentyears. This has seen sales fall to £261m from £268m, a reduction of 3%, whilstoperating profit before goodwill amortisation at £13.3m fell from £14.4m lastyear, a reduction of 8%. Despite this the Group continued to make a healthy 36%return on average capital employed. Costs remained under close scrutiny with further selective headcount reductionsand the implementation of the UK Electronic Components and IT Product businessesre-organisation announced in the interim report which is now complete. Profit before taxation, goodwill amortisation and, last year, exceptionals was£11.3m (2004 £12.5m). This reflects the fall in operating profits of £1.1mdescribed above and a small increase in interest expense. From 2005/6 Acal will report its financial results under International FinancialReporting Standards (IFRS) and later this year it is our intention to restatethe results for 2004/5 in accordance with these new standards. Dividend The Board is recommending a final dividend of 14.4p per share (2004 14p) payableto shareholders on the register as at 15 June 2005. Together with the interimdividend of 7.2p it will make a total of 21.6p (2004 21p) for the year. Thisrepresents an increase of approximately 3% on last year. Strategy During the Group's annual long term planning review each separate subsidiary /division formulates its own strategy for maximising business results. Theseindividual plans are then reviewed by the Board as part of the formulation of anoverall Group plan. Acal will continue to review its strategy for growth and maximising shareholdervalue within the context of a technology distribution group focused onElectronic and Industrial Components, IT Products and IT Parts Services. Further consolidation is expected in the Electronics Components sector and Acalexpects to play an active part in this process. Geographically we have our rootsin Western Europe but have a strategically important investment in the Far East. Corporate Governance There has been much change in this area for all companies, both in how theyreport to stakeholders and in the priority this is given. We seek standardswhich are high for a Company of our size and we are reporting continuingcompliance with the Combined Code, now in its revised form. Board Composition I have taken over from John Curry under whose stewardship, together with that ofTony Laughton, Acal has grown into one of the UK's leading value-addeddistributors. The Board is grateful to John for his great contribution over manyyears and wishes him a long and happy retirement. Rhys Williams, who has been Acal's Senior Independent Director, is to stand downat the AGM after 11 years as a Non-executive Director. His wise counsel andjudgement will be missed but, at the age of 71, Rhys has decided to retire.Again the Board takes this opportunity to thank him for his outstanding serviceand to wish him well for the future. We are, however, pleased to announce thatEric Barton has agreed to assume the role of Senior Independent Director witheffect from the AGM. A search has already commenced to find a new Non-executiveDirector. Following a process of appraisal and review by the Board, I am pleased torecommend both Jim Virdee and Eric Barton for re-election as Directors. Inaddition, having been appointed during the year, I am required to submit myselffor election. The Board, under the leadership of the Senior IndependentDirector, is recommending my election. Employees Despite another tough year the Board would like to acknowledge the contributionand effort made by its hard working and loyal work force. Their efforts are verymuch appreciated. Trading Outlook Acal's Components activities showed growth in the year to 31 March 2005,although order patterns in recent months would suggest that the rate of growthis slowing down, particularly in Continental Europe. However our focus ondemand creation and value-added distribution is producing opportunities for usto extend our product range and the geographical coverage of our existingproducts. Demand in the IT Products activities remains weak and often volatile, but wecontinue to develop our product range concentrating on the higher marginvalue-added activities. The Group's IT Parts Services activities have in the recent past been affectedby changes in channel strategy by some major brand OEMs. However recent successin winning new contracts demonstrates our skills in enabling serviceorganisations to outsource their parts management and procurement, and these, webelieve, will continue to offer significant further opportunities. The general economic backdrop has deteriorated over recent months, and we do notexpect any meaningful improvement in market conditions in the short-term. Wewill continue to take measures to enhance the service we provide to ourcustomers and suppliers, and to improve our financial returns. Acal is wellpositioned to take advantage of the opportunities described above. Richard MoonChairman6 June 2005 OPERATING REVIEW Introduction Whilst the past year saw a continuation of the difficult economic climate inEurope with sales falling from £268m to £261m, including this year's smallacquisition, there have been some very positive developments. The mostimportant of these are the growth in each of our Components businesses in bothsales and profits and the improvement of our gross margins. Our IT product businesses suffered primarily as a result of price pressures and whilst IT Parts Services had reduced sales, elimination of losses enabled this division to achieve a very creditable 8.9% net margin. Overall, we have confidence in the positioning of each of the businesses fromthe key standpoints of our product and service offerings, our technical andcommercial abilities and our competitive position. Performance Review The performance of Acal's divisions in each of the years ended 31 March 2005 and2004 is set out below:- 2005 2004 (restated*) Sales EBITA Sales EBITA as % of as % of as % of as % of £m Group £m Sales £m Group £m Sales Electronic Components 100.1 38% 3.6 3.6% 91.9 34% 3.4 3.7%Industrial Controls 20.6 8% 1.6 7.8% 18.7 7% 1.4 7.5% _______ _______ _______ _______ _______ _______ _______ _______Components TOTAL 120.7 46% 5.2 4.3% 110.6 41% 4.8 4.3% _______ _______ _______ _______ _______ _______ _______ _______IT Products 88.7 34% 2.9 3.3% 98.7 37% 4.3 4.4%IT Parts Services 51.3 20% 4.6 8.9% 59.1 22% 4.9 8.2% _______ _______ _______ _______ _______ _______ _______ _______IT TOTAL 140.0 54% 7.5 5.4% 157.8 59% 9.2 5.8% _______ _______ _______ _______ _______ _______ _______ _______ 260.7 100% 12.7 4.9% 268.4 100% 14.0 5.2% ======= ======= ======= ======= ======= ======= ======= ======= (EBITA is operating pofit excluding goodwill amortisation and the Group's share of operating profit of associates) \* The restatement of the prior year's figures arises from a change in accounting policy relating to service contract revenues Electronic Components The Electronic Components Division produced an impressive increase in sales of9% from £91.9m to £100.1m with a 6% improvement in EBITA up from £3.4m to £3.6m. The improvement has come not from an increase in the available market, whichgrew at less than half our growth rate, but from a combination of factors whichlie at the heart of our electronic components strategy. These comprise thecontinued focus on demand creation, which not only differentiates Acal from mostof its competitors but also provides enhanced margins, greater customer loyalty,increased supplier support and superior staff satisfaction. As a result we havebeen able to expand our product coverage, particularly in the key area of nichesemiconductors where historically we have not been sufficiently represented.This has had a two-fold effect - firstly of course that of expanding sales - butalmost as importantly it provides an important rationale for new customers toconsider Acal as their preferred supplier. With consolidation taking place inthe component distribution market we anticipate that our supplier portfolio andthe geographical coverage of our existing suppliers will continue to grow. Pursuing this strategy of enhancing our semiconductor product offering, in July2004 we acquired Mecodis S.A., a specialised French company which is thatcountry's number one distributor for Microchip Technology Inc., in turn theworld's leading microcontroller manufacturer. In November 2004 we appointed Steve Sydes to the position of UK DivisionalDirector. Steve had previously been Managing Director of Acal Technology, arole he retains and one of his first tasks has been to rationalise our approachto the UK market. This has involved merging the components activities of AcalElectronics into Acal Technology to provide one of the most powerful,technically orientated distributors in the market. Industrial Controls Another good performance was achieved by our Industrial Controls Division withsales up 10% from £18.7m to £20.6m and EBITA up 14% from £1.4m to £1.6m. Therehave been a number of successes in the year and of particular note are the salesin Russia, India, the Asia Pacific region and via our medical instrumentationbusiness. During the year our major Air Conditioning and Refrigeration supplier SporlanValve, was acquired by Parker Hannifin Corp and I am glad to be able to reportthat our rapport with the new owners remains as strong as previously and weanticipate being able to build the business faster as a result of the increasedproduct capability they are able to provide. IT Products Sales of our IT Products declined 10% in the year from a restated £98.7m to£88.7m with EBITA down 33% from £4.3m to £2.9m. The major part of the profit reductions are as a result of price and marginerosion in our storage networking business in the UK and Germany. Volumessteadily increased but not sufficiently to offset this erosion. Headway, our document imaging and management product group, has however grownits sales and market share whilst largely being able to maintain margins. Thethird of our IT Products groups, Networks, also had considerable sales reductionbut this was largely by design as we gradually wound down our computer componentsales from £12.2m in 2003/04 to £5.4m in this year. This business ceased at theyear end. On a more positive note Benelux based AVAS (Acal Value Added Services) producedan excellent performance growing its maintenance, service, training,installation and network managed security activities which support and enhanceour hardware sales. Just prior to the year end a distribution agreement was signed with EMC, theworld's largest storage company, for their Centera product range. Whilst thisoccurred too late to benefit the results, it should enhance and strengthen ourstorage business in the new year. Immediately post the year end we merged all the UK IT Products activities intoone location in order to facilitate a greater degree of synergistic sales plussome back office efficiencies. This new organisation, Acal IT, is now managedtotally by David Lewis who had previously been responsible for the Headwayactivity alone. IT Parts Services This division had a reduction in sales of 13% from £59.1m to £51.3m and EBITAdown 6% from £4.9m to £4.6m. The reductions were across all business unitsexcept CPI, the business we bought in May 2003, which grew both sales andprofits. As stated above, the elimination of the loss making business in theprior year enabled us to achieve a net margin of 8.9%, up from 8.2%. Whilst the business in 2004 was depressed there has been a marked change sincethe beginning of this calendar year. The second half of 2004/05 experiencedsales and EBIT growth of 8% and 19% respectively and this trend is forecast tocontinue as the leading European Service Organisations prepare to outsourcetheir non-core activities. This has led to significant opportunities for thisdivision in our core business of parts management and supply. There was a majorwin in this area in the UK in April which we anticipate will be one of a numberof contracts that we expect during the course of the year. The importance ofsuch contracts is their sustainability for the medium term, typically three tofive years, which will help to minimise our recent experiences of theunpredictability of demand. Acal IT Systems Our ERP system has now been extended to all the intended pan-European locationsand has already facilitated the reorganisation of part of the UK ElectronicComponents business and Acal IT as mentioned above. We will continue to developenhancements, both for efficiency and to meet the demands of our suppliers andcustomers. John Curry Whilst reference to John Curry's premature retirement has been made elsewhere Imust add my appreciation to John for all that he has done during our 18 yearstogether since Acal started. We all wish him a long, well deserved and happyretirement. Tony LaughtonChief Executive6 June 2005 FINANCIAL REVIEW Results for the year The Group's overall sales for the year ended 31 March 2005 were £260.7m (2004:£268.4m, as restated) and operating profit excluding goodwill amortisation andthe Group's share of associated undertakings ("EBITA") was £12.7m (2004:£14.0m, as restated). The restatement of the prior year's figures arises from achange in accounting policy relating to service contract revenues. Acal's Components' activities have increased sales by 9% whereas the ITactivities have contracted by 11%, resulting in their relative contribution tothe Group's sales changing to 46% and 54% respectively as compared to 41% and59% respectively in the prior year. During the year the computer componentsactivity in the Netherlands, which was part of the IT Products division, wasclosed. Similarly last year the EAF operation in the Netherlands, which waspart of the IT Parts Services division, was closed. If the sales of theseclosed activities are excluded, the IT division saw sales of ongoing activitiesreduce from £142.9m in the year to 31 March 2004 to £134.6m in the year to 31March 2005, a reduction of 6%. The year under review saw sterling, on average, approximately 1.4% stronger ascompared to the Euro and approximately 8.2% as compared to the US Dollar. Thetable below shows the effect of acquisitions, the closure of the EAF operationin the Netherlands last year, the closure of the computer components activity inthe Netherlands this year and movements in exchange rates on the Group's sales:- Sales £m Change Year ended 31 March 2004 268.4Acquisition 3.0 +1.1%Effect of closed activities (9.5) -3.5%Effect of exchange rate movements (2.3) -0.9%Underlying increase 1.1 +0.4% _________ _________Year ended 31 March 2005 260.7 -2.9% ========= ========= Thus overall sales were stable at constant exchange rates when the effect of theacquisition and closed activities is excluded. The global downturn in the technology industries over the last few years hasaffected the Group's activities in Continental Europe more severely than thosein the UK, resulting in relatively lower levels of profits denominated incurrencies other than sterling. Accordingly exchange rate movements had nomaterial effect on the Group's results. Acal's strategy of focusing on value-added distribution has continued to showits benefits in the gross margins being achieved. Pricing pressures in storagearea networking products have resulted in some weakening of margins in thatactivity. However the improvements in other areas more than compensated forthis and overall Group margins increased to 26.6% from 25.9% last year. Net operating expenses (excluding goodwill amortisation) for the year were£56.8m compared to £55.4m, for the prior year. The net effect of acquisitionsand closures was immaterial, thus the underlying change was an increase of 2.5%.The number of employees working for the Group at the end of the year was 998,as compared to 1020 for the previous year, and this includes 25 employees whojoined the Group with the acquisition of Mecodis. In reviewing its overheads,Acal endeavours to ensure that its long-term strategy of growth and its"design-in" activities are not adversely affected by any cost-saving measuresadopted. During the year we sold our investment in our South African associate, PremarkProducts (Pty) Ltd, resulting in a small profit. Our main associated company isWestech, which distributes electronic components in the Far East. It continuesto grow its coverage of the Far East and its sales for the year to 31 March 2005were S$119m (approximately £38.5m) compared to S$107m (approximately £36.3m) inthe prior year. The contribution of associated companies to the Group'soperating profit was £0.6m (2004: £0.4m). The expense for goodwill amortisation was £3.0m this year compared to £2.9m lastyear, the small increase reflecting the acquisition of Mecodis in July 2004. Net interest cost for the year was £1.8m (2004: £1.6m) before the FRS17financing cost of £0.2m (2004: £0.3m) and was covered 7.4 times (2004: 9 times)by operating profit before goodwill amortisation. The higher interest cost for2004/05 reflects the higher average debt level during the year and slightlyhigher interest rates. The Group's effective tax rate was 33.4% (2004: 34.5%, as restated) based onthe profit before taxation and amortisation of goodwill, reflecting a lowerlevel of unrelieved tax losses in some operating companies as compared to theprior year. Earnings per share were 26.9p (2004: 29.0p, as restated) before goodwillamortisation and 15.3p (2004: 17.9p, as restated) after goodwill amortisation. The interim and proposed final ordinary dividends for the year will absorb £5.7m(2004: £5.5m), and are covered 1.2 times (2004: 1.4 times) by attributableprofit before goodwill amortisation. Working Capital and Balance Sheet The Group places particular emphasis on the management of working capital,especially in periods of economic downturn. For this purpose Acal uses a modelwhich is based on comparing each item of trading assets to the three-monthmoving average of sales (TMMA). The table below shows the model and how theactual position compared with the model. For example, it shows that our targetfor stock is that it should represent 1.2 months of sales and the actual levelof stock at 31 March 2005 represented 1.2 months of sales, thus achieving thetarget:- ________________ | Target Model | 31 March 2005 31 March 2004 | TMMA Ratio | TMMA ratio TMMA ratio | |Trading Fixed Assets | 0.5 | 0.5 0.6Current Assets:- | |Stock | 1.2 | 1.2 1.1Debtors | 2.3 | 2.4 2.1Current Liabilities:- | |Creditors | (2.2)| (2.6) (2.1)Tax | (0.2)| (0.1) (0.1) | ______ | ______ ______TOTAL Trading Assets | 1.6 | 1.4 1.6 | ====== | ====== ====== |______________| (Note: This trading assets model excludes goodwill, investments, net debt/cash and long-term liabilities) Stock levels increased from £23.6m at 31 March 2004 to £25.5m at 31 March 2005,reflecting in part a need to increase stock in some instances to improvecustomer service, and partly the taking on of new stock in the IT Parts divisionin order to be able to service a new contract which commenced in April 2005.This level is consistent with our TMMA target of 1.2 months. Although there wasan overall reduction in working capital, this was achieved in part as a resultof terms negotiated with suppliers, some of the benefit of which may beshort-term. We will continue to endeavour to improve our performance onmanagement of debtors and stock to ensure that working capital levels continueat efficient levels even if this benefit reverses. Capital expenditure for the year was £2.2m (2004: £3.7m) as compared todepreciation of £3.2m (2004: £3.5m). The programme of implementation of theGroup's new ERP system was completed in October 2004 and thus capitalexpenditure will be returning to more normal levels, although this year it hasbeen lower than would be normal. Following the acquisition of Mecodis in July2004, consideration amounting to €4.9m (£3.3m) was paid during the year ended 31March 2005. A further amount, currently estimated to be around £0.4m, will bepayable during the year ending 31 March 2006, based on the performance of thebusiness acquired. Shareholders' funds at 31 March 2005 were £65.3m, after further goodwillamortisation of £3.0m during the year, as compared to £66.7m (as restated) ayear before. Net debt at 31 March 2005 was £12.3m (representing 18.8% ofshareholders' funds) as compared to £15.2m (representing 22.8% of shareholders'funds) a year earlier. The Group's debt is provided principally by bilateral bank facilities negotiatedcentrally in the UK as well as locally at the operating companies. There arecommitted long-term facilities of around £35 million available to the Group inaddition to short-term facilities which are mainly used for working capitalneeds. Return on Capital Employed Return on average capital employed (which is calculated using operating profitbefore goodwill amortisation and net assets excluding goodwill and adding backnet debt) was 36% compared to 38% last year. Although not up to our target of40%, and the levels we have been used to, we believe that this was asatisfactory performance in a period of difficult trading conditions intechnology-based industries. Pensions 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 financialobligations 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 is the Sedgemoor GroupPension fund (together "the Sedgemoor Scheme"). Soon after the acquisition theSedgemoor Scheme was curtailed and all future service accrual ceased. In 2003 we adopted FRS17 relating to pension schemes. The effect in respect ofthe Sedgemoor Scheme was that a net pension liability of £5.9m was recognised inthe financial statements. At 31 March 2005 the net liability was £4.5m (2004:£4.8m), reflecting primarily the appreciation of investments as a result ofstronger stock markets and contributions made since that date. The nexttriennial actuarial valuation of the Sedgemoor Scheme is due at 31 March 2006. International Financial Reporting Standards Following the decision of the European Union, International Financial ReportingStandards ("IFRS") are to be implemented by listed companies for reportingperiods commencing on or after 1 January 2005. Thus Acal will apply IFRS in itsfinancial statements for the year ending 31 March 2006, including the interimresults for the six months ending 30 September 2005. Acal has established aproject for the implementation of IFRS and this project is on schedule. TheGroup intends to provide a reconciliation of its results for the six monthsended 30 September 2004 and the year ended 31 March 2005, prepared underGenerally Accepted Accounting Principles in the UK (UK GAAP) and under IFRS,prior to the publication of its first set of IFRS results which will cover theperiod of six months ending 30 September 2005. The principal effects of IFRS on the Group's financial statements are expectedto be as set out below:- • Goodwill: IFRS 3 - Business Combinations does not permit the amortisation of goodwill through the profit and loss account. Instead, goodwill is carried at cost and reviewed for impairment annually and also when there are indications that the carrying value may not be recoverable. Under the transitional arrangements of IFRS 1 - First Time Adoption, the Group has decided to apply the standard prospectively rather than restate all previous business combinations and reinstate goodwill previously amortised. Consequently, all prior business combination accounting will be frozen at the transition date of 1 April 2004 and amortisation of the remaining goodwill through the profit and loss account will cease. • Share-based payments: Under IFRS 2 - Share-based Payments, the Group will be required to recognise a charge to income representing the fair value of any share based payments, i.e., awards made under its Share Option schemes. The Group intends to calculate this charge using an appropriate options valuation model and to expense the overall amount, as adjusted to reflect actual and expected levels of vesting, over the relevant vesting periods. Under the transitional arrangements of IFRS 1 - First Time Adoption, the Group intends to apply this standard to share-based payments made since 7 November 2002. • Proposed dividends: IAS 10 - Events After the Balance Sheet Date prohibits the recording of a balance sheet liability in relation to a proposed final dividend distribution until the distribution has formally been approved. • Reporting of Group's share of results of associated undertakings: IAS 1 - Income Statement and Balance Sheet requires the Group's share of operating profit, interest and tax from its associated undertakings to be reported as a single line item on the face of the profit and loss account, whereas UK GAAP requires these items to be reported separately under each line item within the profit and loss account. • Deferred tax: IAS 12 - Income Taxes requires a deferred tax provision for all capital gains rolled over and inherent in revalued fixed assets. Under IAS 12, the Group will be required to recognise a deferred tax liability in relation to the surplus recorded on property revaluations. • Pensions accounting: The accounting treatment required under IAS 19 - Employee Benefits is now broadly similar to that under FRS 17. One minor difference is that IAS 19 allows financing costs in relation to retirement benefit schemes to be recorded within operating profit. FRS 17 requires financing costs or income recognised in relation to retirement benefit schemes to be recorded as other financing charges or income. Further IAS 19 permits a range of options in relation to the recognition of actuarial gains or losses. The Group intends to continue with its policy of recognising such gains or losses immediately through the IFRS statement which is equivalent to the UK GAAP's statement of recognised gains and losses. J S VirdeeFinance Director6 June 2005 ACAL plc Audited Consolidated Profit and Loss Account for the year to 31st March 2005 Year ended 31 March 2005 2004 (restated) £'m £'m Turnover Note 2. Ongoing activities 252.3 253.5Closed activities 5.4 14.9Acquisition 3.0 - _____________ _____________ 260.7 268.4 ============= ============= Operating profit Excluding goodwill amortisation 12.7 14.0Goodwill amortisation (3.0) (2.9) _____________ _____________ Group operating profit (excluding associates) 9.7 11.1 Group share of operating profits of associates 0.6 0.4 _____________ _____________ Total operating profit (including associates) _________ _________Excluding goodwill amortisation | 13.3 | | 14.4 |Goodwill amortisation | (3.0)| | (2.9)| |_______| |_______| 10.3 11.5Loss on termination of operation - (0.6)Net interest payable and similar charges (2.0) (1.9) Profit before taxation _________ _________Excluding goodwill amortisation | 11.3 | | 11.9 |Goodwill amortisation | (3.0)| | (2.9)| |_______| |_______|Profit on ordinary activities before taxation 8.3 9.0Tax on profit on ordinary activities _________ _________United Kingdom | (3.4)| | (3.8)|Overseas | (0.3)| | (0.2)|Associates | (0.1)| | (0.2)| |_______| |_______| (3.8) (4.2) _____________ _____________Profit after taxation _________ _________Excluding goodwill amortisation | 7.5 | | 7.7 |Goodwill amortisation | (3.0)| | (2.9)| |_______| |_______|Profit on ordinary activities after taxation 4.5 4.8 Minority interest (0.4) (0.2) _____________ _____________ Profit attributable to ordinary shareholders 4.1 4.6 Dividends on ordinary shares (5.7) (5.5) _____________ _____________Retained loss for the year (1.6) (0.9) ============= ============= Earnings per share 15.3p 17.9p ============= =============Diluted earnings per share 15.3p 17.9p ============= =============Earnings per share excluding goodwill amortisation 26.9p 29.0p ============= =============Earnings per share excluding goodwillamortisation and loss on termination of operation 26.9p 31.3p ============= =============Dividends per share 21.6p 21.0p ============= ============= The results for the year and prior year relate wholly to continuing operations The impact of the Acquisition on the Group's operating profit for the period was immaterial ACAL plc Audited Consolidated Balance Sheet at 31st March 2005 At 31st March 2005 2004 (restated) £'m £'mFIXED ASSETS Intangible assets 45.7 46.9Tangible assets 12.5 14.1Investments 6.1 6.4 ----------- ----------- 64.3 67.4 ----------- -----------CURRENT ASSETS Stocks 25.5 23.6Debtors 55.5 54.2Cash at bank and in hand 15.9 10.8 ----------- ----------- 96.9 88.6CREDITORS:Amounts falling due within one year (68.4) (62.0) ----------- -----------NET CURRENT ASSETS 28.5 26.6 ----------- ----------- TOTAL ASSETS LESS CURRENT LIABILITIES 92.8 94.0 CREDITORS:Amounts falling due after more than one year (20.2) (20.3) ----------- -----------PROVISIONS FOR LIABILITIESAND CHARGES (1.6) (1.3) ----------- ----------- NET ASSETS - excluding pension liability 71.0 72.4 Net pension liability (4.5) (4.8) ----------- -----------NET ASSETS - including pension liability 66.5 67.6 =========== =========== CAPITAL AND RESERVES Called up share capital 1.3 1.3Share premium account 38.0 37.8Revaluation reserve 0.3 0.3Merger reserve 0.8 0.8Profit and loss account 24.9 26.5 --------- --------- EQUITY SHAREHOLDERS' FUNDS 65.3 66.7 Minority interest 1.2 0.9 --------- --------- TOTAL CAPITAL EMPLOYED 66.5 67.6 ========= ========= ACAL plc Audited Summary Cash flow Statement for the Year to 31st March 2005 Year ended 31st March 2005 2004 (restated) £'m £'mOPERATING ACTIVITIES Group operating profit 9.7 11.1Depreciation and amortisation 6.2 6.4Profit on disposal of fixed assets (0.3) (0.1)Decrease in working capital 1.3 2.4 ----------- -----------NET CASH INFLOW FROM OPERATING ACTIVITIES 16.9 19.8 Dividends from associates 0.3 0.1Net interest paid (1.9) (1.8)Tax paid (3.9) (4.9)Net expenditure on tangible fixed assets and investments (0.8) (3.9)Net cash flow from acquisitions and disposals (2.3) (6.3)Equity dividends paid (5.7) (5.4) ----------- -----------NET CASH INFLOW/(OUTFLOW) BEFORE FINANCING 2.6 (2.4) Decrease in debt and finance leases (0.1) (3.8)Issue of share capital 0.2 0.7 ----------- -----------NET INCREASE/(DECREASE) IN CASH 2.7 (5.5) =========== ============ Reconciliation of net cash flow to movements in net debt NET INCREASE/(DECREASE) IN CASH 2.7 (5.5) ----------- -----------Cash outflow from decrease in debt and lease financing 0.1 3.8Translation differences 0.1 (0.1) ----------- -----------DECREASE/(INCREASE) IN NET DEBT 2.9 (1.8) Net debt at beginning of the period (15.2) (13.4) ----------- -----------Net debt at end of the period (12.3) (15.2) =========== ============ ACAL plc Audited Consolidated Statement of Total Recognised Gains and Losses for the year to 31st March 2005 Year ended 31st March 2005 2004 (restated) £'m £'m Profit attributable to shareholders 4.1 4.6Actuarial gain on pension scheme - 1.2Deferred tax relating to pension scheme (0.2) (0.5)Net gain/(loss) on currency translation 0.3 (1.0) ----------- -----------Total recognised gains and losses for the financial period 4.2 4.3 ===========Prior period adjustment - Deferred revenue on service contracts (1.0) ----------- 3.2 =========== Notes 1 The preliminary results were approved by the Board on 6 June 2005. The financial information set out above does not constitute the Company's statutory accounts for the year ended 31 March 2005 or 2004, but is derived from those accounts. Statutory accounts for 2004 have been delivered to the Registrar of Companies whereas those for 2005 will be delivered following the Company's Annual General Meeting. The auditors have reported on those accounts; their reports were unqualified and did not contain a statement under section 237 (2) or (3) of the Companies Act 1985. 2 These preliminary results have been prepared in accordance with the accounting policies normally adopted by the Company with the exception of a change in the accounting policy relating to revenue earned from service contracts which is detailed in note 3 below. 3 Revenues earned from service contracts where the service was provided by third parties were previously included in turnover in the period in which the relevant contracts were sold with full provision for amounts payable to third parties which were to provide the services under these contracts. Where service under the contract was provided by the Group, revenues were included in turnover over the period of the contract with the costs of providing the service being charged as incurred. Recent developments in accounting practice in this area suggest that where the seller's contractual obligations are performed gradually over time, revenue should be recognised as contract activity progresses to reflect the seller's partial performance of its obligations. Accordingly, turnover in respect of all service contracts is now recognised over the life of the agreement on performance of the contractual obligations to the customer. Related costs are charged to the profit and loss account as incurred. This change has been accounted for as a prior period adjustment and previously reported figures have been restated accordingly. The effect of the change is to decrease sales by £0.8 million in 2004/5 and £0.5 million in 2003/4. Operating profit is decreased by £0.2 million in 2004/5 and £0.1 million in 2003/4. The effect on brought forward reserves is a reduction of £1.0 million. 4 The closure of EAF Nederland BV was announced on 29 March 2004 and completed during the half year ended 30 September 2004. Acal Netherlands's Computer Components activity was closed during the second half of the year ended 31 March 2005. The turnover of these activities is shown under "Closed activities". The acquisition of Mecodis S.A. was announced on 16 July 2004. Its turnover is shown under "Acquisition". The impact of the Closed activities and the Acquisition on the operating profits of the relevant periods was immaterial. 5 The final dividend is payable on 25 July 2005 to shareholders on the register on 15 June 2005. 6 Earnings per share for the year to 31 March 2005 have been calculated on the profit attributable to ordinary shareholders of £4.1 million using the weighted average number of ordinary shares in issue during the period. 7 The Annual Report and Accounts will be mailed to shareholders on or before 20 June 2005. 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:
DiscoverIE