4th Dec 2006 07:01
Acal PLC04 December 2006 FOR RELEASE 7:00AM 4 DECEMBER 2006 ACAL plc (Leading pan-European, value-added technology based distributor providing specialist design-in, sales and marketing services) Unaudited Interim Results for the six months to 30 September 2006 2006 2005** Change (restated) Turnover - ongoing activities*** £122.9m £119.8m +3% EBIT* - ongoing activities £4.6m £4.1m +12% Profit before tax - ongoing activities £4.2m £3.4m +24%- including disposed activities £8.8m £3.9m Basic earnings per share- ongoing activities 10.2p 7.9p +29%- including disposed activities 28.4p 9.2p Dividends per share - relating to period 7.2p 7.2p - (*EBIT - Earnings before interest, tax, the Group's share of profit of associated companies and exceptional items stated after full allocation of central costs) (** The restatement of the prior year's figures arises from the reclassificationof the Air Conditioning and Refrigeration ("AC&R")activities as discontinued, inthe light of their sale, and the reallocation of central costs and the inclusionof the small medical instrumentation business under IT Solutions following that reclassification.) (***Disposed activities represent the sold AC&R business and ongoing activities represent the remaining business of the Group.) • Overall sales of ongoing activities up 3% at £122.9m • EBIT of ongoing activities up 12% at £4.6m and profit before tax of ongoing activities up 24% at £4.2m • Electronic Components : continuing progress in expanding product portfolio and its geographic coverage • Parts Services : short-term weakness in demand as a result of "technology refresh" programmes; minority in CPI bought out; longer term opportunity to attract more customers to outsourced model • IT Solutions : some stability in margins; initial benefits from new product introductions • Interim dividend unchanged at 7.2p For further information:- Tony Laughton - Chief Executive 01483 544500 Jim Virdee - Finance Director 01483 544500 Brian Coleman-Smith/Nia ThomasCubitt Consulting 020 7367 5100 Notes to Editors: 1 The Acal Group is a leading European, value-added technology based distributor providing specialist design-in, sales and marketing, as well as stock planning and procurement services with three divisions: Electronic Components, Parts Services and IT Solutions. 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, and Scandinavia. Westech Electronics, an associated company, is based in Singapore and covers the Far East region. CHAIRMAN'S STATEMENT As indicated in our pre-close Trading Update in September, Acal's profit beforetax from ongoing activities for the half year ending 30 September 2006 shows animprovement over the corresponding period in the prior year. The disposedactivities represent the Air Conditioning and Refrigeration business, the saleof which was announced in May and completed in July 2006. Based on the ongoing activities, overall sales have grown by 3% to £122.9m(2005: £119.8m) and profit before tax by 24% to £4.2m (2005: £3.4m). The Groupmade an annualised return on capital employed of 36% (2005: 22%). Results The performance of Acal's divisions in each of the half years ended 30 September2006 and 2005 is set out below: 2006/7 2005/6 (restated)** Sales EBIT* Sales EBIT* as % of as % of as % of as % of £m Group £m Sales £m Group £m SalesElectronicComponents 51.9 42% 1.7 3.3% 48.4 40% 1.0 2.1% Parts Services 25.0 20% 1.5 6.0% 27.2 23% 2.3 8.5% IT Solutions 46.0 38% 1.4 3.0% 44.2 37% 0.8 1.8% 122.9 100% 4.6 3.7% 119.8 100% 4.1 3.4% * EBIT = Earnings before interest, tax, the Group's share of profit ofassociates and exceptional items, stated after full allocation of central costs. ** The restatement of the prior year's figures arises from the reclassificationof the Air Conditioning and Refrigeration activities as discontinued, in thelight of their sale, and the reallocation of central costs and the inclusion ofthe small medical instrumentation business under IT Solutions following thatreclassification. Electronic Components The growth in sales and profits reflects the initial benefits of our success inexpanding our product portfolio of advanced technology products, particularly inthe area of semiconductors. This has been achieved with considerable supportfrom our suppliers and has enabled us to expand our existing semiconductor teamsand to begin establishing dedicated teams in both Germany and Italy. Asignificant contribution to the improvement in performance of this division camefrom some of our Continental European business units where the expansion of theproduct portfolio started earlier. Parts Services Following record growth last year, both sales and profits have fallen in thefirst half as a consequence of weaker demand for parts resulting from a numberof 'technology-refresh' programmes. Although the second quarter saw some newcontracts, these have not been sufficient to offset the shortfall. There continue to be significant further opportunities for the contractedprocurement, supply and management of service parts with a growing trend towardsoutsourcing of these activities by maintenance and service organisations. As previously announced, in accordance with the arrangements agreed at the timeof its acquisition in May 2003, Acal bought the 28.4% minority interest in CPIin October 2006 for a consideration of approximately £6.7m. Following thisacquisition the customer-facing activities of this division are beingreorganised so as to present a unified range of services to customers. IT Solutions Although there was a small increase in sales over the prior year, profitabilityincreased markedly. The improvement was seen in storage networking and mostparticularly in networking & security. As previously reported, there are signsthat margins are stabilising in this area. This continues to be the case for themajority of products but trading conditions remain competitive and there arestill some products which remain under severe price and margin pressure. Thedivision has also seen some early benefits from the expansion of its productrange. Dividend The Board has declared an interim dividend of 7.2p per share, unchanged from theprior year. This is to be paid on 25 January 2007 to shareholders on theregister on 15 December 2006. Outlook In Electronic Components, execution of the strategy to expand our range oftechnology products and their geographical coverage continues to provideconsiderable optimism for the future. The timing of new contracts in PartsServices is always difficult to predict but the longer term opportunities areclear. The improved performance of our IT Solutions business is expected to bemaintained. Richard Moon4 December 2006 unaudited consolidated income statementfor the six months ended 30 September 2006 six months ended 30 Sept 2006Continuing operations Ongoing Disposed Total six year activities activities months ended (note 2) ended 31 Mar 30 Sept 2006 2005 £m £m £m £m £m Revenue 122.9 - 122.9 119.8 257.0Operating profit 4.6 (1.8) 2.8 4.1 9.7Analysed between:Operating profit beforeexceptional items 4.6 - 4.6 4.1 9.9Exceptional items - provision for retained obligations(note 2) - (1.8) (1.8) - -Exceptional items - profiton disposal of investments - - - - 0.6Exceptional items - productwithdrawal costs - - - - (0.8)Share of post-tax profits from associates (note 3) 0.3 - 0.3 0.2 0.4Finance costs (1.0) - (1.0) (1.2) (2.3)Finance income 0.3 - 0.3 0.3 0.6Profit before taxation 4.2 (1.8) 2.4 3.4 8.4Analysed between:Profit before taxation beforeexceptional items 4.2 - 4.2 3.4 8.6Exceptional items - provision for retained obligations(note 2) - (1.8) (1.8) - -Exceptional items - profiton disposal of investments - - - - 0.6Exceptional items - productwithdrawal costs - - - - (0.8)Taxation (note 3) (1.3) 0.5 (0.8) (1.0) (2.7)Analysed between:Taxation before exceptionalitems (1.3) (1.3)Exceptional items - taxationcredit arising consequent onthe disposal (note 3) 0.5 0.5Profit after taxation for the period from continuingoperations 2.9 (1.3) 1.6 2.4 5.7Discontinued operationsProfit for the period fromdiscontinued operations(note 2) - 6.1 6.1 0.3 0.9Profit for the period 2.9 4.8 7.7 2.7 6.6 Attributable to:Equity holders of the parent 7.5 2.4 6.0Minority interests 0.2 0.3 0.6 7.7 2.7 6.6 Earnings per share (note 4)Continuing operationsBasic 10.2p (4.8p) 5.4p 7.9p 19.1pDiluted 10.2p (4.8p) 5.4p 7.9p 19.1pIncluding discontinued operationsBasic 28.4p 9.2p 22.3pDiluted 28.4p 9.2p 22.3p DividendsDividends per share declared in respect of period 7.2p 7.2p 21.6pDividends per share paid inperiod 14.4p 14.4p 21.6pDividends paid in period £3.8m £3.8m £5.7m unaudited statement of recognised income and expensefor the six months ended 30 September 2006 +----------------------------------+-----------+----------+----------+| | six months|six months|year ended|| | ended| ended| 31 Mar|| | 30 Sept| 30 Sept| 2006|| | 2006| 2005| || | £m| £m| £m|+----------------------------------+-----------+----------+----------+|Actuarial loss on defined benefit | - | - | (3.4)||pension scheme | | | ||Deferred tax relating to pension | (0.1)| (0.1)| 0.8 ||scheme | | | ||Decrease in fair value of | -| (0.7)| (0.4)||investments | | | ||Foreign currency translation | (0.6)| 0.2| 0.7||differences | | | |+----------------------------------+-----------+----------+----------+|Income and expense recognised | (0.7)| (0.6)| (2.3)||directly in equity | | | ||Profit for the period | 7.7| 2.7| 6.6|+----------------------------------+-----------+----------+----------+|Total recognised income and | 7.0| 2.1| 4.3||expense for the period | | | ||Restatement for the effects of IAS| -| -| 0.4||32 and 39 | | | |+----------------------------------+-----------+----------+----------+|Total recognised income and | 7.0| 2.1| 4.7||expense for the period | | | |+----------------------------------+-----------+----------+----------+| | | | ||Attributable to: | | | ||Equity holders of the parent | 6.8| 1.8| 4.1||Minority interests | 0.2| 0.3| 0.6|+----------------------------------+-----------+----------+----------+| | 7.0| 2.1| 4.7|+----------------------------------+-----------+----------+----------+ unaudited consolidated balance sheetat 30 September 2006 at 30 Sept at 30 Sept at 31 Mar 2006 2005 2006 £m £m £m Non-current assetsProperty, plant and equipment 6.6 7.0 6.7Goodwill 48.7 48.8 48.8Intangible assets - software 4.5 5.2 4.8Investments in associates 4.7 4.2 4.7Other financial assets 0.3 1.8 0.3Deferred tax assets 4.1 2.2 4.0 68.9 69.2 69.3 Current assetsInventories 23.2 25.2 21.4Trade and other receivables 49.4 55.9 58.0Current tax assets 0.7 1.8 1.7Cash and cash equivalents 10.6 12.6 16.9 83.9 95.5 98.0 Current liabilitiesTrade and other payables (48.1) (50.3) (58.0)Short-term borrowings (7.1) (10.6) (11.2)Current tax liabilities (2.3) (3.4) (3.7)Provisions (1.8) - (1.0) (59.3) (64.3) (73.9) Net current assets 24.6 31.2 24.1 Assets of discontinued - - 6.2operations classified as heldfor saleNon-current liabilitiesLong-term borrowings (6.2) (20.2) (12.2)Pension liability (8.9) (6.2) (9.1)Deferred tax liabilities (1.9) (1.8) (1.8)Provisions (1.6) (1.0) (0.7) (18.6) (29.2) (23.8) Liabilities of discontinued - - (4.1)operations classified as heldfor sale Net assets 74.9 71.2 71.7 EquityShare capital 1.3 1.3 1.3Share premium account 38.0 38.0 38.0Share scheme reserve 0.3 0.1 0.2Other reserves 1.2 1.6 1.8Retained earnings 32.2 28.7 28.6 Equity attributable to equityholders of the parent 73.0 69.7 69.9Minority interests 1.9 1.5 1.8 Total equity 74.9 71.2 71.7 unaudited reconciliation of movements in shareholders' equityfor the six months ended 30 September 2006 +----------------------------+-----------+--+----------+--+-----------+| | six months| |six months| | year ended|| | ended 30| | ended 30| | || | Sept 2006| | Sept 2005| |31 Mar 2006|| | £m| | £m| | £m|+----------------------------+-----------+--+----------+--+-----------+|Shareholders' equity at | 69.9| | 71.3| | 71.3||start of period | | | | | ||Opening balance sheet | -| | 0.4| | 0.4||adjustment: IAS 39 | | | | | ||Total recognised income and | | | | | ||expense for the period | 6.8| | 1.8| | 3.7||Share-based payments | 0.1| | -| | 0.1||Dividends | (3.8)| | (3.8)| | (5.7)||Movements in associates | -| | -| | 0.1||reserves | | | | | |+----------------------------+-----------+--+----------+--+-----------+|Shareholders' equity at end | 73.0| | 69.7| | 69.9||of period | | | | | |+----------------------------+-----------+--+----------+--+-----------+ unaudited consolidated cash flow statementfor the six months ended 30 September 2006 +----------------------------+-----------+-+-----------+-+-----------+| | six months| | six months| | year ended|| | ended 30| | ended 30| | || | Sept 2006| | Sept 2005| |31 Mar 2006|| | £m| | £m| | £m|+----------------------------+-----------+-+-----------+-+-----------+|Profit for the year | | | | | ||Ongoing activities | 2.9| | 2.4| | 5.7||Disposed activities | 4.8| | 0.3| | 0.9|+----------------------------+-----------+-+-----------+-+-----------+| | 7.7| | 2.7| | 6.6||Taxation expense | 1.0| | 1.2| | 3.1||Share of results from | (0.3)| | (0.2)| | (0.4)||associates | | | | | ||Net finance costs | 0.7| | 1.0| | 1.7||Depreciation of property, | 1.0| | 1.1| | 2.1||plant and equipment | | | | | ||Amortisation of intangible | 0.5| | 0.5| | 1.1||assets - software | | | | | ||Change in provisions | 1.8| | 0.2| | 0.7||Gain on disposal of business| (5.9)| | -| | -||Gain on disposal of | -| | -| | (0.6)||investments | | | | | ||Gain on disposal of | | | | | ||property, plant and | | | | | ||equipment | (0.1)| | (0.1)| | (0.1)||Pension scheme funding | (0.4)| | (0.3)| | (0.7)||Equity-settled share-based | 0.1| | -| | 0.1||payment expense | | | | | |+----------------------------+-----------+-+-----------+-+-----------+|Operating cash flows before | 6.1| | 6.1| | 13.6||changes in working capital | | | | | ||(Increase)/decrease in | (3.7)| | (5.6)| | 2.3||working capital | | | | | |+----------------------------+-----------+-+-----------+-+-----------+|Cash flow from operations | 2.4| | 0.5| | 15.9||Interest paid | (0.9)| | (1.3)| | (2.1)||Income taxes paid | (1.5)| | (0.5)| | (2.9)|+----------------------------+-----------+-+-----------+-+-----------+|Net cash flow from operating| 0.0| | (1.3)| | 10.9||activities | | | | | |+----------------------------+-----------+-+-----------+-+-----------+|Cash flows from investing | | | | | ||activities | | | | | ||Acquisition of subsidiaries | -| | -| | (0.4)||Proceeds from sale of | -| | -| | 2.5||associate | | | | | ||Proceeds from sale of | 8.3| | | | -||subsidiaries | | | | | ||Net overdrafts disposed of | 0.2| | | | ||with subsidiaries | | | | | ||Purchases of property, plant| (1.1)| | (1.2)| | (2.2)||and equipment | | | | | ||Proceeds from sale of | 0.2| | 0.2| | 0.3||property, plant and | | | | | ||equipment | | | | | ||Purchases of intangible | (0.2)| | (0.2)| | (0.3)||assets - software | | | | | ||Interest received | 0.2| | 0.3| | 0.6||Dividends received from | 0.2| | 0.1| | 0.1||associates | | | | | |+----------------------------+-----------+-+-----------+-+-----------+|Net cash flow from investing| 7.8| | (0.8)| | 0.6||activities | | | | | |+----------------------------+-----------+-+-----------+-+-----------+|Cash flows from financing | | | | | ||activities | | | | | ||Repayments of borrowings | (11.0)| | (0.1)| | (3.1)||Dividends paid to company's | (3.8)| | (3.8)| | (5.7)||shareholders | | | | | ||Dividends paid to minority | (0.1)| | -| | -||interests | | | | | |+----------------------------+-----------+-+-----------+-+-----------+|Net cash flow from financing| (14.9)| | (3.9)| | (8.8)||activities | | | | | |+----------------------------+-----------+-+-----------+-+-----------+|Net (decrease)/increase in | | | | | ||cash and cash equivalents | (7.1)| | (6.0)| | 2.7||Cash and cash equivalents at| | | | | ||beginning of period | 10.8| | 8.0| | 8.0||Effect of exchange rate | -| | 0.1| | 0.1||fluctuations | | | | | |+----------------------------+-----------+-+-----------+-+-----------+|Cash and cash equivalents at| 3.7| | 2.1| | 10.8||end of period | | | | | |+----------------------------+-----------+-+-----------+-+-----------+ notes to the interim reportfor the six months ended 30 September 2006 1. Basis of accounting and preparation This interim results announcement is prepared in accordance with the IFRSaccounting policies expected to apply at 31 March 2007 and which were applied at31 March 2006. As permitted, this interim report has been prepared in accordance with UKlisting rules and not in accordance with IAS 34 'Interim Financial Reporting'. Comparative figures at September 2005 have been restated to reflect thefollowing changes in accounting treatment: • Where operations have subsequently been classified as discontinued, the income statement has been restated to present the income statements of those operations within discontinued operations (see note 2); • Deferred tax and reserves have been restated to reflect the deferred tax liability that would follow from the distribution of profits by the company's associates. The financial information for the year ended 31 March 2006 is extracted from thestatutory accounts of the Group for that year. Those published accounts werereported on by the auditors without qualification or statement under sections237 (2) or (3) of the Companies Act 1985 and have been delivered to theRegistrar of Companies. The interim accounts for the six months ended 30 September 2006 and thecomparatives to 30 September 2005 do not constitute statutory accounts asdefined in S240 of the Companies Act 1985 and are unaudited. 2. 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 period is as follows: +-----------------------------------------+-----------------------+| | £m|+-----------------------------------------+-----------------------+|Sale proceeds | 8.3||Total net assets sold | (2.3)|+-----------------------------------------+-----------------------+| | 6.0||Tax 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 IT systems. Profit from discontinued operations comprises: +-----------------------------+-----------+-----------+-----------+| | six months| six months| year ended|| | ended 30| ended 30| || | Sept 2006| Sept 2005|31 Mar 2006|| | £m| £m| £m|+-----------------------------+-----------+-----------+-----------+|Profit on disposal of | 5.9| - | -||discontinued operations | | | ||Profit for the period from | 0.2| 0.3| 0.9||trading of discontinued | | | ||operations | | | |+-----------------------------+-----------+-----------+-----------+|Profit for the period from | 6.1| 0.3| 0.9||discontinued operations | | | |+-----------------------------+-----------+-----------+-----------+ 3. Taxation The £1.3 million tax charge for ongoing activities for the six months ended 30September 2006 (30 September 2005: £1.0 million, 31 March 2006: £2.7 million)comprises a charge of £1.2 million in respect of UK taxation (30 September 2005:£1.3 million, 31 March 2006: £2.6 million) and a charge of £0.1 million inrespect of overseas taxation (30 September 2005: credit £0.3 million, 31 March2006: charge £0.1 million). A deferred tax asset of £0.5m has been recognised inrespect of the provision for retained obligations of the disposed activitiesreferred to in note 2 above. In addition, the group's share of post-tax profits from associates includes atax charge for the six months ended 30 September 2006 of £0.1 million (30September 2005: £0.1 million, 31 March 2006: £0.3 million). 4. Earnings per share The weighted average number of Ordinary Shares in issue during the period was26.4 million (2005: 26.4 million). The weighted average number of OrdinaryShares on a diluted basis was 26.4 million (2005: 26.4 million) after anadjustment for dilutive share options of nil (2005: nil million). Basic earningsper share have been calculated on profit attributable to Shareholders of £7.5million (2005: £2.4 million). Earnings per share on discontinued operations of23.0p (2005: 1.3p) have been calculated on the discontinued profit attributableto shareholders of Acal plc of £6.1m (2005: £0.3m) and are based on the sameweighted average number of ordinary shares as for basic earnings per share. 5. Post balance sheet events - Dividends An interim dividend of 7.2 pence per share (2005: 7.2 pence) amounting to adividend of £1.9 million (2005: £1.9 million) has been declared by theDirectors. These interim accounts do not reflect this dividend payable. - 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. 6. Unaudited reconciliation of net cash flow to movements in net borrowings for the six months ended 30 September 2006 +---------------------------+------------+------------+---------+| | six months| six months| year|| | ended 30| ended 30| ended|| | Sept 2006| Sept 2005| 31 Mar|| | | | 2006|| | £m| £m| £m|+---------------------------+------------+------------+---------+|Net (decrease)/increase in | (7.1)| (6.0)| 2.7||cash and cash equivalents | | | ||Cash outflow from decrease | 11.0| 0.1| 3.0||in debt and lease financing| | | ||Translation differences | (0.1)| -| 0.1|+---------------------------+------------+------------+---------+|Decrease/(increase) in net | 3.8| (5.9)| 5.8||borrowings | | | ||Net borrowings at beginning| (6.5)| (12.3)| (12.3)||of the period | | | |+---------------------------+------------+------------+---------+|Net borrowings at end of | (2.7)| (18.2)| (6.5)||the period | | | |+---------------------------+------------+------------+---------+ 7. The Company's interim report is being sent to shareholders by post. Copieswill also be available at www.acalplc.co.uk or from:- Acal plc, 2 Chancellor Court, Occam Road, Surrey Research Park, Guildford,Surrey, GU2 7AH. The interim 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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