22nd Jun 2006 07:01
LPA Group PLC22 June 2006 NEWS RELEASE Interim Unaudited Group Results for the Six Months ended 31 March 2006 LPA Group Plc, the electrical and electronic equipment manufacturer anddistributor, announces a pre-tax loss of £149,000 (2005: profit of £96,000) forthe six months ended 31 March 2006. KEY POINTS 2006 2005 • TURNOVER £6.7m £6.6m • (LOSS) / PROFIT BEFORE TAX (£149,000) £96,000 • BASIC (LOSS) / EARNINGS PER SHARE (1.19p) 0.76p • DIVIDENDS 0.15p 0.15p • GEARING 39.2% 49.6% • DIFFICULT TRADING CONDITIONS AND DELAYS IN CONTRACT AWARD WILL RESTRICT PROGRESS THIS YEAR • TENDERING ACTIVITY REMAINS AT A HIGH LEVEL • FOLLOWING ADOPTION OF FRS17 £2M PENION SURPLUS RECOGNISED • POSITIVE CASH FLOW IN THE PERIOD AND GEARING REDUCED Peter Pollock, Chief Executive, commented The continuing delays in contract award are very frustrating. We await a veryhigh level of outstanding tenders to be adjudicated. In the meantime our marketshave become more competitive and progress in the second half will be limited. Inthe event of these conditions continuing we will keep strategy under review. Wehave had some success in procuring components, tooling and traction batteriesfrom low cost country sources. Enquiries: Peter Pollock Chief Executive 01799 512844Stephen Brett Finance Director 01799 512860James Glancy Teather & Greenwood Limited 020 7426 9000Robert Naylor Teather & Greenwood Limited 020 7426 9000 22 June 2006 Interim Unaudited Group Results for the Six Months ended 31 March 2006 CHAIRMAN'S STATEMENT In my remarks to the Annual General Meeting held on 8 March 2006, I commentedthat the start to the new financial year had been disappointing and that thiswould be reflected in the results for the first half. A loss before tax of£149,000 has been incurred against a profit of £96,000 in the same period lastyear, on sales of £6.7m (2005: £6.6m). Basic loss per share amounted to 1.19pagainst earnings of 0.76p last year. There was net cash inflow before financingof £86,000 (2005: outflow of £18,000). The interim divided of 0.15p has beenmaintained and will be paid on 29 September 2006 to shareholders registered atthe close of business on 8 September 2006. Following the adoption in full of accounting standard FRS17 the surplus on thefinal salary pension scheme is included in the results for the first time, andprevious years figures have been restated for comparison purposes. The surplusof £2.0m (2005: £1.3m), shown in the balance sheet under pension asset, is thedifference between the market value of scheme assets and the present value ofscheme liabilities net of deferred tax. The surplus is the product of two largenumbers whose values can fluctuate widely and shareholders should not assumethat it can be realised. I also remarked that orders received during February had been encouraging andthat these, together with a number of near term opportunities, had the potentialto deliver a better second half. The near term opportunities have not manifestedthemselves as strongly as we had hoped, however the volume and value of tendersoutstanding remains very high. Only one tender of any significance has been lostin the period, but the others have been delayed. We are awaiting the imminentaward of several million pounds worth of contracts. The cost base has beenreduced and the cost of this taken in the first half. Some limited progress isexpected in the second half of the year. The strategy of developing relationships with Rail Rolling Stock manufacturerssupplying the UK market continues to make progress and all of Alstom Transport,Bombardier Transportation, Hitachi and Siemens now deal with Group companies.However this strategy is taking more time to deliver the base load required bythe Group to rebuild that lost when train building ceased in Birmingham in 2002and more recently with the slow down in new build in Derby. The market is alsobecoming ever more competitive. Progress in Europe has been encouraging and thepotential business in France is very considerable. The Group has lost furtherbusiness as a result of the globalisation of procurement in its aerospacemarkets. More positively, the Group's infrastructure products have performed better.Aircraft Ground Power Supply Products, Relays and Industrial Connectors havesold well. New products, based on the Group's LED technology, are evoking a lotof interest and important new orders from defence, infrastructure and railvehicle markets are anticipated. The Group has been building a position in theUK defence equipment market albeit from a low base. Initial progress has beenencouraging, with some small contracts won and invitations to tender formulti-million pound opportunities. Efforts to source components and tooling fromlow cost countries are succeeding in reducing costs. The Group has beenappointed European agent and distributor for a range of traction batteries. Order entry just kept pace with sales during the first six months but at lowermargins. The Group has been selected for some notable projects, in some casesmore than a year ago, but the orders have not yet been placed and these have notbeen included in order entry. Shareholders will share management's frustrationwith these delays, which are limiting and damaging the Group's progress. In the light of the challenging trading conditions, Management are keepingstrategy under review. Your board expects only limited progress during the remainder of this year. Inthe longer term, the award of the major projects currently under adjudication,together with development of the shorter-term order base, will determine theGroup's progress. Michael RuschChairman22 June 2006 LPA GROUP PLC Interim Unaudited Group Results for the Six Months ended 31 March 2006 CONSOLIDATED PROFIT AND LOSS ACCOUNT 6 months to * 6 months to * Year to 31 March 2006 1 April 2005 30 Sept 2005 Unaudited Unaudited Audited £000's £000's £000'sTurnover 6,668 6,614 13,469Operating (loss) / profit (181) 92 263Net finance income 32 4 10(Loss) / profit on ordinary activities before taxation (149) 96 273Tax on (loss) / profit on ordinary activities 19 (13) (40)(Loss) /profit on ordinary activities after taxation (130) 83 233Basic (loss) / earnings per share (1.19p) 0.76p 2.14p * As restated. See note 3. 1. The financial information contained in this interim statement does notconstitute statutory accounts as defined in section 240 of the Companies Act1985. The financial information for the full preceding year is based on thestatutory accounts for the financial year ended 30 September 2005. Thoseaccounts, upon which the auditors issued an unqualified opinion, have beendelivered to the Registrar of Companies. 2. The calculation of loss per share is based upon the loss after tax of£130,000 (2005: profit of £83,000) and the weighted average number of ordinaryshares in issue during the period of 10.903m (2005: 10.903m). 3. The interim financial information has been prepared on the basis of theaccounting policies set out in the Group's statutory accounts for the year ended30 September 2005, except that FRS17 "Retirement Benefits" will be adopted infull for the first time in place of SSAP24 "Pension Costs", and dividends willbe accounted for in line with FRS21 "Events after the Balance Sheet Date" in theaccounts to the year ended 30 September 2006. Comparative figures have beenrestated to reflect the above. The Group previously accounted for its defined benefit pension scheme underSSAP24. Under SSAP24 a regular pension cost was determined using actuarialmethods and charged to the profit and loss account. Variations from the regularpension cost were spread over the average remaining service lives of employees.The cumulative difference between the profit and loss account expense andemployer contributions was held in the balance sheet as either a prepayment oraccrual. Under FRS17 pension scheme deficits or surpluses are recognised on thebalance sheet. The profit or loss account comprises the current service cost,the appropriate proportion of any past service cost, the interest cost and theexpected return on any plan assets. The net impact of this change in theaccounts is to increase net assets at September 2005 and March 2005 by£1,622,000 and £1,386,000 respectively, and to increase earnings in the year toSeptember 2005 and the half year to 1 April 2005 by £93,000 and £48,000respectively. The company has changed its accounting treatment of proposed dividends. FRS21 nolonger permits proposed dividends to be included as an expense in the profit andloss account, with the corresponding liability in the balance sheet. Dividenddistributions are not recognised in the profit and loss account, they aredisclosed as a component of the movement in shareholders' funds. A liability isrecorded for a final dividend when the dividend is approved by the company'sshareholders, and for an interim dividend when the dividend is paid. The netimpact of this change in the accounts is to increase net assets at September2005 and March 2005 by £39,000 and £16,000 respectively. 4. Copies of this Interim Report are being sent to shareholders. Copies arealso available to the public from the Company's Registered Office, Tudor Works,Debden Road, Saffron Walden, Essex, CB11 4AN LPA GROUP PLC Interim Unaudited Group Results for the Six Months ended 31 March 2006 CONSOLIDATED BALANCE SHEET As at * As at * As at 31 March 2006 1 April 2005 30 Sept 2005 Unaudited Unaudited Audited £000's £000's £000's Fixed assets Intangible assets 1,281 1,374 1,327 Tangible assets 2,183 2,331 2,235 3,464 3,705 3,562 Current assets Stocks 2,383 2,398 2,604 Debtors 2,996 3,146 3,085 Cash at bank and in hand 3 2 3 5,382 5,546 5,692 Creditors: Amounts falling due within one year (3,708) (3,698) (3,743) Net current assets 1,674 1,848 1,949 Total assets less current liabilities 5,138 5,553 5,511 Creditors: Amounts falling due after more than one year (1,083) (1,368) (1,211) Provisions for liabilities and charges (31) (10) (44) Net assets excluding pension asset 4,024 4,175 4,256 Pension asset 1,996 1,314 1,558 Net assets 6,020 5,489 5,814 Capital and reserves Called up share capital 1,090 1,090 1,090 Share premium account 254 254 254 Revaluation reserve 313 314 313 Merger reserve 230 230 230 Profit and loss account 4,133 3,601 3,927 Equity shareholders' funds 6,020 5,489 5,814 * As restated. See note 3. LPA GROUP PLC Interim Unaudited Group Results for the Six Months ended 31 March 2006 CONSOLIDATED CASH FLOW STATEMENT 6 months to * 6 months to * Year to 31 March 2006 1 April 2005 30 Sept 2005 Unaudited Unaudited Audited £000's £000's £000's Net cash inflow from operating activities 301 238 787Returns on investments and servicing of finance (86) (93) (183)Taxation - - (28)Capital expenditure (90) (130) (223)Equity dividends paid (39) (33) (49)Net cash inflow / (outflow) before financing 86 (18) 304Financing (214) (222) (448)(Decrease) in cash (128) (240) (144) RECONCILIATION OF OPERATING (LOSS) / PROFIT TO NET CASH INFLOW FROM OPERATING ACTIVITIES Operating (loss) / profit (181) 92 263Depreciation and amortisation 228 240 482Changes in working capital and other non cash items 197 (145) (49)Adjustment for pension funding 57 51 91Net cash inflow from operating activities 301 238 787 * As restated. See note 3. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT (Decrease) in cash in the period (128) (240) (144)Cash outflow from decrease in debt and lease financing 214 222 448Change in debt resulting from cash flows 86 (18) 304New hire purchase agreements (38) - -Amortisation of loan costs (5) (5) (11)Movement in net debt in the period 43 (23) 293Opening net debt (2,404) (2,697) (2,697)Closing net debt (2,361) (2,720) (2,404) This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Lpa