29th Oct 2009 07:10
e2v technologies plc
Interim results for six months to 30 September 2009
e2v technologies plc, a leading developer and manufacturer of high-technology electronic components and sub-systems to the medical & science, aerospace & defence, and commercial & industrial sectors, announces its interim results for the six months ended 30 September 2009:
|
Highlights |
6 months ended 30 September 2009 £ million |
6 months ended 30 September 2008 £ million |
Year ended 31 March 2009 £ million |
|
Revenue |
96.2 |
107.0 |
233.2 |
|
Adjusted* operating profit |
3.6 |
11.6 |
27.4 |
|
Adjusted* profit before tax |
1.6 |
8.5 |
20.4 |
|
Profit/(loss) before tax |
2.6 |
3.1 |
(28.4) |
|
Profit/(loss) after taxation |
2.7 |
1.7 |
(21.3) |
|
Total shareholders' equity |
57.4 |
74.3 |
53.7 |
|
Net borrowings (excluding capitalised borrowing costs) |
105.2 |
88.0 |
137.3 |
|
Earnings/(loss) per share - basic |
4.28p |
2.74p |
(34.42)p |
|
Adjusted* earnings per share - basic |
3.12p |
10.32p |
30.20p |
Like for like sales down 26%, excluding QP and exchange rate movements
Management actions to reduce and rephase costs secured £3.6m of adjusted* operating profit
QP acquisition contributed £7.6m sales, and adjusted* operating profit of £2.9m
Cash generated from operations of £22.1m (2008: £18.3m)
Net borrowings reduced by £32.1m in last six months
Charles Hindson appointed Group FD in May 2009, Chris Geoghegan became Chairman on 1 October 2009
Potential accelerated restructuring programme announced today - approximately £33m of one-off costs to deliver approximate annualised savings of £26m
£55.8m equity raising by firm placing and rights issue launched today with new 3 year banking facility, primarily to reduce indebtedness
Commenting on the results, Keith Attwood, Chief Executive said:
"The rapid decline in demand experienced through the latter part of 2008/09 has continued during the first half of 2009/10.
As a consequence of management's continuing focus on costs and cash along with significant support from the workforce in general, we managed to deliver a small adjusted* profit before tax and substantially reduce our net borrowings.
Looking forward, whilst some uncertainty remains, we now believe that our markets appear to be stabilising, and consequently, have started consultations on a potential accelerated restructuring programme, to better match our capacity to meet anticipated demand.
In addition, we have announced today a fully underwritten equity raising of £55.8m supported by a new banking facility. This will significantly reduce our indebtedness and provide the financial flexibility to support the potential restructuring of the cost base over the next 18 months."
*Adjusted profit is before amortisation of acquired intangibles, impairment charges, business improvement programme costs and fair value losses and gains on financial instruments and exchange gains on re-denomination of borrowings. Adjusted earnings is adjusted profit less tax impacts where applicable.
Further enquiries:
|
e2v technologies plc |
|
|
Keith Attwood, Chief Executive Charles Hindson, Group Finance Director |
Tel: 01245 493 493 |
|
Website: www.e2v.com |
|
|
Financial Dynamics |
|
|
Susanne Yule/Sophie Kernon |
Tel: 020 7269 7291 |
Review of the half year
OVERVIEW
The results for the first half of the financial year ending 31 March 2010 reflected the significant reduction in demand experienced by the Group since December 2008.
Reported sales decreased by 10% in the first half to £96.2m (2008: £107.0m). The acquisition of QP provided £7.6m of additional revenue and the strengthening of the Euro and US dollar also increased reported sales by 7.8% but the like for like sales declined 26% to £79.2m (2008: £107.0m). Adjusted* operating profit was £3.6m (2008: £11.6m) of which QP contributed £2.9m. Reported profit before tax of £2.6m was 16% lower than the prior period, with adjusted* profit before tax down 81.0% to £1.6m (2008: £8.5m).
Excluding the impact of the QP acquisition, sales fell in each of the Group's market sectors: aerospace and defence by 4%, medical and science by 21% and commercial and industrial by 29%. The major decline was experienced in Europe and North America.
Gross profit fell by 25.3% to £26.6m (2008: £35.6m) due in part to sales reducing more quickly that the relatively fixed operating cost base. A temporary period of short time working introduced in the UK and USA, along with an extended summer shutdown of the facility in France, achieved £2.0m of savings in the second quarter of the current financial year.
Research and development expenses (R&D) were down by 12.9% to £6.1m (2008: £7.0m) despite the inclusion of £0.7m for expenditure at QP. This includes the benefit of management action to rephase £0.8m into the second half of this financial year.
A range of additional overhead cost control actions were undertaken, with reductions in marketing, travel and general spend, achieving £1.0m of savings in the first half.
Selling and distribution expenses decreased by £0.2m to £7.9m (2008: £8.1m) net of the inclusion of £0.1m relating to QP, and were £1.5m lower than initially planned as a result of cost saving actions.
Administrative expenses, excluding amortisation of acquired intangibles, business improvement programme costs and fair value losses on foreign exchange contracts, increased by 2.3% to £9.0m (2008: £8.8m) primarily due to increased professional fees and provisions being partially offset by other savings from short time working.
Amortisation of acquired intangible assets increased to £4.5m (2008: £3.6m) reflecting the acquisition of QP. Fair value gains on foreign exchange contracts amounted to £2.7m (2008: loss £0.8m), and there were also gains arising on the fair value of interest rate swaps of £0.2m (2008: £0.4m). There were no additional provisions made for business improvement expenses (2008: £1.4m).
The adjusted* operating margin fell to 3.7% (2008: 10.8%). Finance costs fell by 38% to £2.1m (2008: £3.4m) despite higher borrowing levels due to lower bank base rates. Finance income included £0.2m (2008: £0.4m) of fair value gains on interest rate swaps together with the £2.6m exchange gains on re-denomination of borrowings arising from the transfer of the Group's Euro debt into Sterling which were excluded from adjusted* profits. The resulting adjusted* profit before tax fell by 81% to £1.6m (2008: £8.5m).
A further phase of the Group's established Business Improvement Programme, "Fit for the Future", was progressed during the first half. Costs incurred were within the provisions made during the financial year ended 31 March 2009 of £2.0m for the UK element of the programme. There was a net headcount reduction across the group of 133 between 31 March 2009 and 30 September 2009.
Profit before tax amounted to £2.6m (2008: £3.1m).
The underlying tax rate for the first half was 20% (2008:14.8%) due to a larger proportion of the Group's profits being generated in the USA.
Adjusted* earnings per share fell to 3.12p (2008: 10.32p) and reported earnings per share amounted to 4.28p (2008: 2.73p).
Operating cash flow improved in the first half to £22.1m (2008: £18.3m). This was largely due to improvements in working capital management. Tax receipts of £4.3m arose from R&D tax credit claims in France, the UK and the USA. After capital expenditure and capitalised R&D investment, additional fair value adjustments arising on the acquisition of QP and other financing costs, the overall net reduction in borrowings amounted to £23.4m. Exchange rate movements reduced net borrowings (excluding capitalisation of borrowing costs) by a further £8.7m. At 30 September 2009 the net borrowings amounted to £105.2m, a reduction of £32.1m since 31 March 2009.
Operating working capital (defined as inventories, trade and other receivables less trade and other payables) has been reduced by 27% since 31 March 2009 to £37.2m. Within operating working capital, inventories reduced by 18% to £34.9m.
Charles Hindson joined as Group Finance Director in May 2009 and on 25 September the Group announced the appointment of Christopher Geoghegan as Chairman of the Group, effective 1 October 2009.
The Company agreed an amended banking facility on 30 September 2009 as part of its preparations for raising additional equity and its associated new banking facility.
BUSINESS OVERVIEW
Electron Devices and Subsystems
Sales for Electron Devices and Subsystems ("EDS") reduced by 26.1% to £31.4m (2008: £42.5m). Excluding exchange rate movements, the decline was 30.4%. The economic downturn affected sales in all market sectors.
In the medical and science sector, radiotherapy OEMs continued to show relatively low demand for new systems. The new magnetron supply agreement with Tomotherapy was implemented in May, and OEMs continued de-stocking through the spring/summer, although there remained a solid spares business and demand was firmer in the second quarter.
In the aerospace and defence sector, demand for RF Subsytems was relatively low, reducing comparative turnover by 17%. Core activity was also down reflecting the profile of the order book at the start of the year.
Within the commercial and industrial sector, marine radar and satcom showed declines of around 17% and there were declines of around 40% in broadcast (with US digital transition completed) and industrial markets.
Adjusted* profit reduced by 52% to £5.0m (2008: £10.4m) due to the impact of lower sales of higher margin product lines. Reductions in warranty costs and cost reduction actions improved the operating margin and the adjusted* profit was within £0.3m of that achieved in the second half of 2008/09.
The order book at 30 September 2009 was higher at £66.6m (2008: £43.4m), reflecting the addition of multi-year orders for medical customers last year. The amount of the order book due for delivery in this financial year is £26.5m (2008: £28.0m).
Imaging
Sales for Imaging were down 16% to £24.6m (2008: £29.3m). Excluding exchange rate movements, sales were down 25% year on year.
Imaging has seen continued demand for space science programmes. Scientific imaging has shown modest revenue decline, with one major customer moving to second sourcing its supply. Dental imaging continued to decline for CCD based products and there was muted demand for new CMOS based products. Machine vision sales declined significantly in Europe, reflecting its late positioning in the capex cycle. There were, after the summer, signs of recovery in orders from Asian markets.
Adjusted* loss was £1.0m compared to a £0.7m profit in 2008, primarily due to lower dental and industrial sales compared with the fixed cost of running the wafer fab facility based in Grenoble. This resulted in the business being loss making in France, despite cost reduction activities and an extended summer shutdown.
The order book at 30 September 2009 was £35.4m (2008: £42.7m). £23.7m of the order book is due for delivery this financial year (2008: £23.4m).
Specialist Semiconductors
Sales for Specialist Semiconductors increased 19% to £24.9m (2008: £20.9m). Excluding contributions from QP, acquired last year, sales decreased by 17.4% and further, excluding exchange rate movements, like for like sales reduced 29.4%.
Compared with the six months to 30 September 2008, there was growth in aerospace and defence activities as this was positively impacted by QP, which showed sequential growth. In addition, de-stocking in the supply chain appeared to have slowed. Our high reliability assembly and test service based in Grenoble saw increased demand although commercial markets in the division have significantly declined.
Adjusted* profit increased by 3.7% to £2.8m (2008: £2.7m), reflecting QP's contribution of £2.9m of profit and other operations' breakeven performance.
The order book at 30 September 2009 was lower at £16.1m (2008: £17.2m), as order book visibility reduced through our customers moving towards smaller but more frequent orders, of which £12.8m (2008: £13.0m) is for delivery this financial year.
Sensors
Sales in Sensors increased by 7.7% to £15.3m (2008: £14.2m). Excluding exchange rate movements, growth was 2.4%.
The Microwave and High Speed Electronics business saw some growth in both the medical and defence sectors but challenging market conditions in the commercial sector have depressed overall sales by 5.5%. However, despite this, a variety of cost containment measures have led to an overall profit improvement of 16.3% against the same period last year for this product group.
In a generally weak automotive market, the MiCS air quality sensor product range showed 90% growth in the first half. This is predominantly attributable to growth in the Chinese market through customer adoption of air quality sensing technology on new automotive platforms.
Thermal Imaging cameras saw good underlying growth and an order from London Fire Brigade drove growth in the period up by 62.5%.
Gas Sensors had a large order in the first half of the previous year from China, which has not been repeated this year. Opportunities in the Asian market remain strong.
The Scientific Instruments business saw strong first half sales growth of 21% and continues on its growth curve through demand for the core Sirius SD product.
Following a strategic review of the Biosensors programme, this activity was closed in the period. Reported losses in the last full year were £1.0m and were £0.3m in the first half.
Adjusted* losses reduced £0.3m to £0.7m (2008: £1.0m) due to sales growth and the closure of the Biosensors programme.
The order book at 30 September 2009 was £15.5m (2008: £15.0m), of which £8.1m is for delivery in the financial year (2008: £7.1m).
Restructuring, rights issue and refocused strategy
We have announced today proposals for an extensive acceleration of the Group's "Fit for the Future" programme.
The potential restructuring programme, which will affect the Group's operations predominantly in France, but also in the UK, is subject to formal employee consultations which are anticipated to be completed by January 2010 in the UK and by April 2010 in France.
The potential French restructuring programme includes the Imaging business at Grenoble. Consultation is being undertaken on the options for the CCD wafer fab facility which may include its closure along with acceleration of the development of a "fabless" based CMOS Imaging business. The latter may complement the UK-based high-end CCD Imaging business. This consultation also includes options on the cost structure of the Specialist Semiconductor activities and support functions based in Grenoble. The potential restructuring of operations in the UK relates to the transfer to Chelmsford of the manufacturing activity of the Lincoln based microwave and high speed electronics (MHSE) business. Consideration is being given to other cost reduction activities as part of the continuing focus on cost and capacity management.
The overall cost of these steps to restructure the Group's operations is anticipated to be approximately £33m and would, on completion, provide annual savings of approximately £26m.
We have also today announced that the company proposes to raise £55.8m gross by the issue of new shares through a firm placing and rights issue. This will reduce the Group's debt profile, facilitate the potential "Fit for the Future" programme and provide a stronger financial base for the Group. The firm placing and rights issue are subject to approval by shareholders at a General Meeting scheduled to be held on 20 November 2009.
In addition,, on 29 October 2009, the Group entered into a new term and revolving facility of £105m, that becomes available on completion of the firm placing and rights issue, to refinance the existing facilities agreement. This facility will run for three years until 31 December 2012.
With these changes, our operational focus going forward will be on three core divisions:
Electron Devices and Subsystems, where the development focus is on a range of RF Subsystems for existing customers and new customer funded applications
Imaging with the increased focus for development on space and fabless CMOS products
Specialist Semiconductors where the development focus is on End of Life management services in Europe and the use of the US SSA platform created within QP for bringing other Group products to the US market
along with continuing to review the options for disposal of other non core assets.
Principal Risks and Uncertainties for the Second Half
Along with uncertainties discussed under the Outlook below, the other principal risks and uncertainties for the Group in the second half of the financial year ending 30 March 2010 are that:
The company requires shareholder approval to complete the fully underwritten equity capital finance raising so that the proposed restructuring of the group's balance sheet financing arrangements is completed.
The potential "Fit for the Future" programme during both the periods of consultation and afterwards during its anticipated initial implementation may lead to disruption within the operations of the business and so have a negative impact on the Groups' financial performance.
Outlook
Like-for-like sales for the Group in the first half year declined by 26% in comparison to 2008 and, as yet, there are no firm indications that this decline has halted. However, whilst uncertain market conditions have made it difficult for the Group to pre-judge future developments, the Board believes that several of the markets in which the Group trades appear to be stabilising:
In the science & medical markets, the dental business remains weak whilst the radiotherapy business has stabilised, with some signs of restocking
In the aerospace & defence markets, demand remains strong in Imaging and is reasonably firm with respect to Specialist Semiconductors. Customer orders for delivery in the second half in Electron Devices and Subsystems have increased sequentially
Trading in the commercial and industrial markets remains uncertain with some signs of recovery in Imaging and some parts of Electron Devices and Sub-systems
The overall potential order pipeline for the Group, tracked by the sales function, has been stable during the course of the second quarter of this financial year.
The Board believes that full year sales for the Group will remain second half weighted, although results for this full financial year remain uncertain. The Board's expectations for the financial year are supported by an order book as at 30 September 2009 of £134m, of which £65m (excluding overdue orders) is for delivery in the second half of this financial year, compared to an order book of £118m of which £61m (excluding overdue orders) was for delivery in the second half of the previous financial year.
|
C Geoghegan |
K Attwood |
|
Chairman |
Chief Executive Officer |
*Adjusted profit is before amortisation of acquired intangibles, impairment charges, business improvement programme costs and fair value losses and gains on financial instruments and exchange gains on re-denomination of borrowings. Adjusted earnings is adjusted profit less tax impacts where applicable.
Directors' Responsibilities
We confirm that to the best of our knowledge:
The condensed set of financial statements has been prepared in accordance with IAS 34;
The interim management report includes a fair review of the information required by DTR 4.2.7R of the 'Disclosure and Transparency Rules', being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year: and
The interim management report includes a fair review of the information required by DTR 4.2.8R of the 'Disclosure and Transparency Rules', being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during the period; and any changes in the related party transactions described in the last annual report that could do so.
The Directors of e2v technologies plc are listed in the Group's Annual Report for the year ended 31 March 2009.
|
K Attwood |
C Hindson |
|
Chief Executive Officer |
Group Finance Director |
|
29 October 2009 |
29 October 2009 |
Independent review report to e2v technologies plc
Introduction
We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2009 which comprises the Condensed consolidated income statement, Condensed consolidated statement of comprehensive income, Condensed consolidated statement of financial position, Condensed consolidated statement of cash flows, Condensed consolidated statement of changes in equity and the related notes 1 to 14. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the company in accordance with guidance contained in ISRE 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.
As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Scope of Review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2009 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.
Emphasis of matter
In forming our opinion on the half-yearly financial report, which is not qualified, we have considered the adequacy of the disclosures made in Note 1 of the half-yearly financial report concerning the Group's ability to continue as a going concern. These conditions indicate the existence of a material uncertainty which may cast significant doubt about the ability of the Group to continue as a going concern. The half-yearly financial report does not include any adjustments that would result if the Group were unable to continue as a going concern.
Ernst & Young LLP
Registered AuditorCambridge
29 October 2009
Condensed consolidated income statement
for the six months ended 30 September 2009
|
6 months ended |
6 months ended |
Year ended |
|||
|
30 September 2009 |
30 September 2008 |
31 March 2009 |
|||
|
Note |
£000 |
£000 |
£000 |
||
|
Revenue |
2 |
96,160 |
106,985 |
233,193 |
|
|
Cost of sales |
(69,580) |
(71,432) |
(154,223) |
||
|
Gross profit |
26,580 |
35,553 |
78,970 |
||
|
Research and development expenses |
(6,074) |
(6,997) |
(17,133) |
||
|
Selling and distribution expenses |
(7,895) |
(8,143) |
(17,973) |
||
|
Administrative expenses |
(10,809) |
(14,555) |
(63,399) |
||
|
Operating profit/(loss) |
1,802 |
5,858 |
(19,535) |
||
|
Finance costs |
3 |
(2,141) |
(3,366) |
(9,554) |
|
|
Finance income |
3 |
2,970 |
645 |
684 |
|
|
Adjusted profit before tax |
2 |
1,556 |
8,517 |
20,389 |
|
|
Amortisation of acquired intangible assets |
(4,469) |
(3,609) |
(8,628) |
||
|
Impairment of acquired intangible assets |
- |
- |
(26,127) |
||
|
Impairment of plant and equipment |
- |
- |
(2,500) |
||
|
Business improvement programme expenses |
- |
(1,388) |
(6,826) |
||
|
Fair value gains/(losses) on foreign exchange contracts |
2,694 |
(774) |
(2,894) |
||
|
Fair value gains/(losses) on interest rate swaps |
246 |
391 |
(1,819) |
||
|
Realised exchange gains on re-denomination of Euro borrowings |
2,604 |
- |
- |
||
|
Profit/(loss) before tax |
2 |
2,631 |
3,137 |
(28,405) |
|
|
Income tax credit/(expense) |
4 |
25 |
(1,447) |
7,106 |
|
|
Profit/(loss) for the period attributable to equity holders of the parent |
2,656 |
1,690 |
(21,299) |
||
|
Earnings/(loss) per share - basic |
5 |
4.28p |
2.74 p |
(34.42)p |
|
|
Earnings/(loss) per share - diluted |
5 |
4.28p |
2.73 p |
(34.37)p |
|
|
Adjusted earnings per share - basic |
5 |
3.12 p |
10.32 p |
30.20 p |
|
|
Adjusted earnings per share - diluted |
5 |
3.12 p |
10.28 p |
30.16 p |
|
Condensed consolidated statement of comprehensive income
for the six months ended 30 September 2009
|
6 months ended |
6 months ended |
Year ended |
|
|
30 September 2009 |
30 September 2008 |
31 March 2009 |
|
|
£000 |
£000 |
£000 |
|
|
Profit/(loss) for the period |
2,656 |
1,690 |
(21,299) |
|
(Loss) on cash flow hedges taken directly to equity |
- |
(80) |
(80) |
|
Exchange differences on translation of foreign operations |
609 |
324 |
4,425 |
|
Actuarial (loss)/gain on post employment employee benefits |
(115) |
158 |
(195) |
|
Income tax relating to components of other comprehensive income |
- |
(5) |
(15) |
|
Other comprehensive income for the period, net of tax |
494 |
397 |
4,135 |
|
Total comprehensive income/(loss) for the period, net of tax |
3,150 |
2,087 |
(17,164) |
Condensed consolidated statement of financial position
at 30 September 2009
|
30 September 2009 |
30 September 2008 |
31 March 2009 |
|||
|
Note |
£000 |
£000 |
£000 |
||
|
Assets |
|||||
|
Non-current assets |
|||||
|
Property, plant and equipment |
7 |
36,064 |
38,743 |
40,251 |
|
|
Goodwill |
9 |
75,067 |
58,097 |
78,076 |
|
|
Other intangible assets |
32,848 |
30,668 |
41,123 |
||
|
Deferred tax asset |
3,613 |
2,966 |
5,860 |
||
|
147,592 |
130,474 |
165,310 |
|||
|
Current assets |
|||||
|
Inventories |
34,861 |
41,955 |
42,433 |
||
|
Trade and other receivables |
47,030 |
52,225 |
61,109 |
||
|
Derivative financial instruments |
- |
443 |
- |
||
|
Income tax recoverable |
836 |
1,043 |
2,498 |
||
|
Cash and short-term deposits |
10 |
19,396 |
6,546 |
6,373 |
|
|
102,123 |
102,212 |
112,413 |
|||
|
Total assets |
2 |
249,715 |
232,686 |
277,723 |
|
|
Liabilities |
|||||
|
Current liabilities |
|||||
|
Trade and other payables |
(44,663) |
(43,173) |
(52,567) |
||
|
Derivative financial instruments |
(1,757) |
(1,226) |
(4,200) |
||
|
Other financial liabilities |
(5,919) |
(8,094) |
(9,750) |
||
|
Income tax payable |
(3,220) |
(946) |
(139) |
||
|
Provisions |
(5,808) |
(5,325) |
(6,567) |
||
|
(61,367) |
(58,764) |
(73,223) |
|||
|
Net current assets |
40,756 |
43,448 |
39,190 |
||
|
Non-current liabilities |
|||||
|
Derivative financial instruments |
(417) |
- |
(915) |
||
|
Other financial liabilities |
(116,685) |
(85,464) |
(132,822) |
||
|
Provisions |
- |
(350) |
- |
||
|
Retirement benefit obligations |
11 |
(3,403) |
(2,905) |
(3,355) |
|
|
Deferred tax liability |
(10,493) |
(10,867) |
(13,729) |
||
|
(130,998) |
(99,586) |
(150,821) |
|||
|
Total liabilities |
(192,365) |
(158,350) |
(224,044) |
||
|
Net assets |
57,350 |
74,336 |
53,679 |
||
|
Equity |
|||||
|
Issued share capital |
3,128 |
3,126 |
3,128 |
||
|
Share premium |
41,780 |
41,750 |
41,780 |
||
|
Capital redemption reserve |
274 |
274 |
274 |
||
|
Treasury shares reserve |
(5) |
(6) |
(5) |
||
|
Foreign currency translation reserve |
6,017 |
1,301 |
5,408 |
||
|
Retained earnings |
6,156 |
27,891 |
3,094 |
||
|
Total equity attributable to equity holders of e2v technologies plc |
57,350 |
74,336 |
53,679 |
||
|
Total equity and liabilities |
249,715 |
232,686 |
277,723 |
||
Condensed consolidated statement of cash flows
for the six months ended 30 September 2009
|
6 months ended |
6 months ended |
Year ended |
||
|
30 September 2009 |
30 September 2008 |
31 March 2009 |
||
|
Note |
£000 |
£000 |
£000 |
|
|
Cash flows from operating activities |
||||
|
Profit/(loss) before tax |
2,631 |
3,137 |
(28,405) |
|
|
Net finance (income)/costs |
(829) |
2,721 |
8,870 |
|
|
Operating profit/(loss) |
1,802 |
5,858 |
(19,535) |
|
|
Adjustments to reconcile to net cash inflows from operating activities: |
||||
|
Depreciation of property, plant and equipment |
7 |
5,333 |
4,512 |
10,204 |
|
Impairment of plant and equipment |
7 |
- |
- |
2,500 |
|
Amortisation of intangible assets |
6,429 |
5,564 |
12,674 |
|
|
Impairment of intangible assets |
- |
- |
26,127 |
|
|
Fair value (gains)/losses on foreign exchange contracts |
(2,694) |
774 |
2,894 |
|
|
Share based payment charge |
521 |
387 |
625 |
|
|
Decrease in inventories |
6,486 |
1,781 |
8,173 |
|
|
Decrease in trade and other receivables |
12,267 |
2,205 |
1,735 |
|
|
Decrease in trade and other payables |
(7,345) |
(3,253) |
(3,224) |
|
|
(Decrease)/increase in provisions |
(688) |
520 |
875 |
|
|
Cash generated from operations |
22,111 |
18,348 |
43,048 |
|
|
Income tax received/(paid) |
4,320 |
(1,315) |
(1,297) |
|
|
Net cash from operating activities |
26,431 |
17,033 |
41,751 |
|
|
Cash flows from investing activities |
||||
|
Proceeds from sale of property, plant and equipment |
7 |
- |
44 |
201 |
|
Interest received |
120 |
254 |
684 |
|
|
Purchases of property, plant and equipment |
7 |
(1,769) |
(4,043) |
(9,221) |
|
Purchases of software |
(215) |
(588) |
(1,531) |
|
|
Expenditure on product development |
(311) |
(1,214) |
(2,612) |
|
|
Acquisition of subsidiary, net of cash acquired |
9 |
(634) |
- |
(41,059) |
|
Net cash used in investing activities |
(2,809) |
(5,547) |
(53,538) |
|
|
Cash flows from financing activities |
||||
|
Interest paid |
(1,717) |
(3,160) |
(7,338) |
|
|
Proceeds from issue of shares, net of expenses |
- |
649 |
681 |
|
|
Dividends paid to equity holders of the parent |
6 |
- |
(3,237) |
(4,913) |
|
Payment of finance lease obligations |
- |
(13) |
(13) |
|
|
Proceeds from borrowings |
10 |
- |
- |
38,152 |
|
Realised exchange gains on re-denomination of Euro borrowings |
3 |
2,604 |
- |
- |
|
Transaction costs of bank facilities |
(1,125) |
- |
(184) |
|
|
Repayment of borrowings |
10 |
(10,939) |
(5,097) |
(15,451) |
|
Net cash (used in)/from financing activities |
(11,177) |
(10,858) |
10,934 |
|
|
Net increase/(decrease) in cash and cash equivalents |
12,445 |
628 |
(853) |
|
|
Cash and cash equivalents at beginning of period |
6,373 |
5,806 |
5,806 |
|
|
Net foreign exchange difference |
578 |
112 |
1,420 |
|
|
Cash and cash equivalents at end of period |
10 |
19,396 |
6,546 |
6,373 |
Condensed consolidated statement of changes in equity
for the six months ended 30 September 2009
|
Issued capital |
Share premium |
Other reserves |
Hedge reserve |
Foreign currency translation reserve |
Retained earnings |
Total equity |
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
|
1 April 2008 |
3,111 |
41,116 |
268 |
58 |
983 |
28,914 |
74,450 |
|
Hedge reserve and currency translation movements |
- |
- |
- |
(58) |
318 |
- |
260 |
|
Profit for period |
- |
- |
- |
- |
- |
1,827 |
1,827 |
|
Comprehensive (loss)/income |
- |
- |
- |
(58) |
318 |
1,827 |
2,087 |
|
Issue of shares |
15 |
634 |
- |
- |
- |
- |
649 |
|
Share based payment charge |
- |
- |
- |
- |
- |
387 |
387 |
|
Equity dividends paid |
- |
- |
- |
- |
- |
(3,237) |
(3,237) |
|
30 September 2008 |
3,126 |
41,750 |
268 |
- |
1,301 |
27,891 |
74,336 |
|
Currency translation movements |
- |
- |
- |
- |
4,107 |
- |
4,107 |
|
Loss for period |
- |
- |
- |
- |
- |
(23,358) |
(23,358) |
|
Comprehensive income/(loss) |
- |
- |
- |
- |
4,107 |
(23,358) |
(19,251) |
|
Issue of shares |
2 |
30 |
- |
- |
- |
- |
32 |
|
Issue of shares by Employee Benefit Trust on exercise of options |
- |
- |
1 |
- |
- |
(1) |
- |
|
Share based payment charge |
- |
- |
- |
- |
- |
238 |
238 |
|
Equity dividends paid |
- |
- |
- |
- |
- |
(1,676) |
(1,676) |
|
31 March 2009 |
3,128 |
41,780 |
269 |
- |
5,408 |
3,094 |
53,679 |
|
Currency translation movements |
- |
- |
- |
- |
609 |
- |
609 |
|
Profit for period |
- |
- |
- |
- |
- |
2,541 |
2,541 |
|
Comprehensive income |
- |
- |
- |
- |
609 |
2,541 |
3,150 |
|
Share based payment charge |
- |
- |
- |
- |
- |
521 |
521 |
|
30 September 2009 |
3,128 |
41,780 |
269 |
- |
6,017 |
6,156 |
57,350 |
Notes to the condensed interim financial statements
1. Basis of preparation and accounting policies
Basis of preparation
These condensed interim financial statements have been prepared in accordance with the accounting policies set out in the Group's 2009 Annual Report and were approved by the Board on 29 October 2009. The condensed interim financial statements for the six months ended 30 September 2009 have been prepared in accordance with IAS 34 'Interim Financial Reporting'. The condensed interim financial statements do not include all the information and disclosures that would be reported in a complete set of financial statements under IAS 1 'Presentation of Financial Statements' and therefore should be read in conjunction with the Group's annual financial statements as at 31 March 2009.
The financial information in these condensed interim financial statements does not constitute statutory financial statements as defined in Section 435 of the Companies Act 2006. The Group's 2009 Annual Report has been filed with the Registrar of Companies and, whilst the auditor's report on those financial statements was not qualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985, the auditor's report did include reference to the existence of a material uncertainty which may cast significant doubt on the Company's and Group's ability to continue as a going concern. The auditors drew attention to this matter by way of emphasis without qualifying their report.
The condensed interim financial statements are unaudited but have been formally reviewed by the auditor, Ernst & Young LLP, and their report to the Company is set out on page 7.
Going concern
The Group operates in a challenging business environment. Due to the lower levels of demand since December 2008 and the weakness of Sterling against both the Euro and the US dollar placing pressure on the banking covenants, specific short term actions were taken in the six months ended 30 September 2009. These actions included the reduction of costs, the restriction of capital expenditure, the close control of working capital, the conversion of debt denominated in Euros to Sterling in the period as well as entering into an amended facility agreement with its bankers. The result of these actions has enabled the Group to reduce net borrowings (excluding capitalised borrowing costs) from £137.3m at 31 March 2009 to £105.2m at 30 September 2009.
In order to provide a stronger financial base for the Group, the Board is implementing the following actions:
The Group is now at the advanced stage of restructuring its financing by raising £55.8m gross of equity through a firm placing and rights issue, which will be used to reduce indebtedness. Although the rights issue is fully underwritten, on an irrevocable basis, its implementation requires approval by shareholders at the shareholders' meeting convened for 20 November 2009.
The Group continues to operate in a challenging environment where, although trading conditions appear to be stabilising, activity is at a substantially reduced level. Therefore the Group is proposing to implement an extensive acceleration of its "Fit for the Future" programme that is anticipated to be implemented over an extended period.
On 29 October 2009, the Group concluded a new banking facility which runs to 31 December 2012 that becomes available on completion of the firm placing and rights issue. Under this agreement the Group continues to be subject to covenant undertakings that require operating performance to meet certain financial covenants.
The Board has prepared detailed profit and cash flow forecasts through to 30 September 2011. In considering these profit and cash flow forecasts, as well as the refinancing, the potential reorganisation plan and the revised banking facilities the Board has carefully considered the assumptions and sensitivities. However, if the firm placing and rights issue is not approved by 30 November 2009, then the Group will be required to renegotiate the banking facilities as soon as is reasonably practical and therefore it may be unable to fund the potential extensive acceleration of the "Fit for the Future" programme.
The Board has concluded that obtaining shareholder approval for the firm placing and rights issue and completing the potential accelerated "Fit for the Future" programme, as anticipated, represents a material uncertainty at the date of this half-yearly report that casts significant doubt upon the Group's ability to continue as a going concern. Nevertheless, having considered these uncertainties the Board have reasonable expectations that shareholder approval for the firm placing and rights issue will be obtained and that the potential accelerated "Fit for the Future" programme will be completed in accordance with the anticipated plans and therefore believes the going concern basis of preparation of the half-yearly financial report continues to be appropriate. The half-yearly financial report does not include any adjustments that would result if the going concern basis of accounting were considered inappropriate.
Significant accounting policies
The accounting policies adopted in the preparation of the condensed interim financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 March 2009, except for the adoption of new Standards and Interpretations, noted below. Adoption of these Standards and Interpretations did not have any effect on the financial position or performance of the Group.
IFRS 2 'Share Based Payment' (revised) - The amendments clarify the accounting treatment of group cash-settled share based payment transactions. These amendments have no financial impact on the group.
IFRS 8 'Operating Segments' - Requires disclosure of information about the Group's operating segments and replaces the requirements to determine primary (business) and secondary (geographical) reporting segments of the Group. The Group determined that the operating segments were the same as the business segments previously identified under IAS 14 'Segment Reporting'. Additional disclosures about each of these segments are shown in note 2 including revised comparative information.
IAS 1 'Presentation of Financial Statements' (revised) - Introduced the 'Consolidated statement of comprehensive income' which presents all items of recognised income and expense either in one single statement, or in two linked statements. The Group has elected to present in two statements, the 'Consolidated income statement', formerly the Group income statement, and the 'Consolidated statement of comprehensive income', formerly the Group statement of recognised income and expense. In addition, it requires the reconciliation of movements in equity, previously disclosed in a note to the financial statements, to be presented as a primary statement, the 'Consolidated statement of changes in equity'.
The interim financial statements do not contain all the supplementary notes that would be reported in a complete set of financial statements under IAS 1 and are therefore referred to as 'condensed'.
2. Segmental information
In prior periods, in accordance with IAS 14 'Segment Reporting', the Group's segment information was reported by business segments and geographical segments. However, from 1 January 2009, in accordance with IFRS 8 'Operating Segments', the segmental information presented in the following tables is that which the chief operating decision maker (CODM) uses internally in evaluating the performance of operating segments and allocating resources to those segments.
The Group's operating segments are aggregated into four operating divisions, in line with the Group's divisional structure. These are the reportable segments, as follows:
Electron devices and sub-systems
High performance electron devices and sub-systems for applications including defence electronic countermeasures; radiotherapy cancer treatment machines; radar systems; satellite communication amplifiers; digital television transmitters and industrial heating.
Imaging devices
Advanced CCD and CMOS imaging sensors and cameras for applications including space, science and life science imaging; industrial process control; intra-oral and panoramic dental x-ray systems; military surveillance and automotive imaging.
Specialist semiconductors
Specialist semiconductors including logic, memory and microprocessors for applications including high reliability microprocessor requirements; mission-critical avionics and defence programs; high speed data conversion and sensor data acquisition utilising mixed signal applications specific devices.
Sensors
Sensors for a wide range of professional sensing products for applications including environmental safety; x-ray spectroscopy; automotive alarm and security systems; microwave radar and safety and arming devices and fire, rescue and security thermal imaging.
In addition to the reportable segments, also reported is:
Centre - corporate
Costs directly associated with the management of the Group's public quotation and other related costs arising for the corporate management of the group along with financing related activities.
|
Electron devices and sub-systems |
Imaging devices |
Specialist semiconductors |
Sensors |
Centre -corporate |
Total operations |
||||||||
|
6 months ended 30 September 2009 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|||||||
|
Revenue |
|||||||||||||
|
Revenue from external customers |
31,380 |
24,574 |
24,923 |
15,283 |
- |
96,160 |
|||||||
|
Segment result |
|||||||||||||
|
Adjusted segment profit/(loss) |
5,016 |
(1,034) |
2,838 |
(699) |
- |
6,121 |
|||||||
|
Unallocated expenses |
(1,944) |
(1,944) |
|||||||||||
|
Exchange differences |
- |
- |
- |
- |
(600) |
(600) |
|||||||
|
Net finance costs |
- |
- |
- |
- |
(2,021) |
(2,021) |
|||||||
|
Adjusted profit/(loss) before tax |
5,016 |
(1,034) |
2,838 |
(699) |
(4,565) |
1,556 |
|||||||
|
Amortisation of acquired intangible assets |
(4,469) |
||||||||||||
|
Fair value gains on foreign exchange contracts |
2,694 |
||||||||||||
|
Fair value gains on interest rate swaps |
246 |
||||||||||||
|
Exchange gains on translation of borrowings |
2,604 |
||||||||||||
|
Profit before tax |
2,631 |
||||||||||||
|
Tax credit |
25 |
||||||||||||
|
Profit for period |
2,656 |
||||||||||||
|
Adjusted profit before tax |
1,556 |
||||||||||||
|
Finance costs |
2,141 |
||||||||||||
|
Bank interest (Note 3) |
(120) |
||||||||||||
|
Adjusted operating profit |
3,577 |
||||||||||||
|
Total assets |
17,569 |
21,747 |
98,675 |
18,730 |
92,994 |
249,715 |
|||||||
|
Electron devices and sub-systems |
Imaging devices |
Specialist semiconductors |
Sensors |
Centre -corporate |
Total operations |
|
|
6 months ended 30 September 2008 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
Revenue |
||||||
|
Revenue from external customers |
42,530 |
29,282 |
20,937 |
14,236 |
- |
106,985 |
|
Segment result |
||||||
|
Adjusted segment profit/(loss) |
10,403 |
689 |
2,653 |
(976) |
- |
12,769 |
|
Unallocated expenses |
(1,213) |
(1,213) |
||||
|
Exchange differences |
- |
- |
- |
- |
73 |
73 |
|
Net finance costs |
- |
- |
- |
- |
(3,112) |
(3,112) |
|
Adjusted segment profit/(loss) before exceptional items and tax |
10,403 |
689 |
2,653 |
(976) |
(4,252) |
8,517 |
|
Amortisation of acquired intangible assets |
(3,609) |
|||||
|
Business improvement programme costs |
(1,388) |
|||||
|
Fair value losses on foreign exchange contracts |
(774) |
|||||
|
Fair value gains on interest rate swaps |
391 |
|||||
|
Profit before tax |
3,137 |
|||||
|
Tax charge |
(1,447) |
|||||
|
Profit for period |
1,690 |
|
Adjusted profit before tax |
8,517 |
|||||
|
Finance costs |
3,366 |
|||||
|
Bank interest (Note 3) |
(254) |
|||||
|
Adjusted operating profit |
11,629 |
|||||
|
Total assets |
25,036 |
53,153 |
48,116 |
20,778 |
85,603 |
232,686 |
|
Electron devices and sub-systems |
Imaging devices |
Specialist semiconductors |
Sensors |
Centre -corporate |
Total operations |
|
|
Year ended 31 March 2009 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
Revenue |
||||||
|
Revenue from external customers |
83,739 |
65,224 |
53,323 |
30,907 |
- |
233,193 |
|
Segment result |
||||||
|
Adjusted segment profit/(loss) |
15,686 |
4,292 |
13,074 |
(1,596) |
- |
31,456 |
|
Unallocated expenses |
- |
- |
- |
- |
(2,349) |
(2,349) |
|
Exchange differences |
- |
- |
- |
- |
(1,667) |
(1,667) |
|
Net finance costs |
- |
- |
- |
- |
(7,051) |
(7,051) |
|
Adjusted profit/(loss) before tax |
15,686 |
4,292 |
13,074 |
(1,596) |
(11,067) |
20,389 |
|
Amortisation of acquired intangible assets |
(8,628) |
|||||
|
Impairment of acquired intangible assets |
(26,127) |
|||||
|
Impairment of plant and equipment |
(2,500) |
|||||
|
Business improvement programme costs |
(6,826) |
|||||
|
Fair value losses on foreign exchange Contracts |
(2,894) |
|||||
|
Fair value losses on interest rate swaps |
(1,819) |
|||||
|
Loss before tax |
(28,405) |
|||||
|
Tax credit |
7,106 |
|||||
|
Loss for period |
(21,299) |
|||||
|
Adjusted profit before tax |
20,389 |
|||||
|
Bank loan interest (Note 3) |
7,323 |
|||||
|
Amortisation of debt issue costs (Note 3) |
412 |
|||||
|
Finance income |
(684) |
|||||
|
Adjusted operating profit |
27,440 |
|||||
|
Total assets |
21,421 |
27,667 |
111,493 |
19,909 |
97,233 |
277,723 |
|
Revenue by geographic location |
||||||
|
United Kingdom |
Europe |
North America |
Asia Pacific |
Other |
Total |
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
|
Revenue from external customers |
||||||
|
6 months ended 30 September 2009 |
20,061 |
31,245 |
32,408 |
11,332 |
1,114 |
96,160 |
|
6 months ended 30 September 2008 |
20,229 |
39,505 |
35,514 |
10,026 |
1,711 |
106,985 |
|
Year ended 31 March 2009 |
44,409 |
83,639 |
79,953 |
22,150 |
3,042 |
233,193 |
The Group operates in various locations around the world. The Group's country of domicile is the United Kingdom.
Revenue by location is based on the country the Group's customer is located in.
|
Non-current assets by location (excluding deferred tax asset) |
||||||
|
United Kingdom |
Europe |
North America |
Asia Pacific |
Other |
Total |
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
|
Non-current assets (excluding deferred tax asset) |
||||||
|
6 months ended 30 September 2009 |
39,489 |
66,828 |
37,621 |
41 |
- |
143,979 |
|
6 months ended 30 September 2008 |
47,703 |
79,425 |
320 |
60 |
- |
127,508 |
|
Year ended 31 March 2009 |
40,590 |
75,745 |
43,052 |
63 |
- |
159,450 |
Non-current assets are allocated to the country of operation, based on the location of the statutory entity that owns the assets.
|
Total assets by location |
||||||
|
United Kingdom |
Europe |
North America |
Asia Pacific |
Other |
Total |
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
|
Total assets |
||||||
|
6 months ended 30 September 2009 |
93,592 |
101,422 |
54,505 |
196 |
- |
249,715 |
|
6 months ended 30 September 2008 |
102,092 |
115,985 |
14,382 |
227 |
- |
232,686 |
|
Year ended 31 March 2009 |
92,410 |
117,477 |
67,638 |
198 |
- |
277,723 |
Total assets by location is additional information to that required for compliance with IFRS8.
3. Finance costs and finance income
|
6 months ended |
6 months ended |
Year ended |
|
|
30 September 2009 |
30 September 2008 |
31 March 2009 |
|
|
£000 |
£000 |
£000 |
|
|
Finance costs |
|||
|
Bank loan interest |
1,913 |
3,182 |
7,323 |
|
Amortisation of debt issue costs |
228 |
184 |
412 |
|
Fair value adjustments to interest rate swaps |
- |
- |
1,819 |
|
2,141 |
3,366 |
9,554 |
|
|
Finance income |
|||
|
Bank interest |
120 |
254 |
684 |
|
Fair value adjustments to interest rate swaps |
246 |
391 |
- |
|
Realised exchange gains on re-denomination of Euro borrowings |
2,604 |
- |
- |
|
2,970 |
645 |
684 |
4. Income tax
The tax charge for the period has been calculated on the basis of the Directors' best estimate of the underlying annual effective tax rate for the year of 20.0% (2008: 14.8%). The increase in the rate is due to the increase in the proportion of profits generated in the USA compared to the prior year.
The 2008 rate of 14.8% was before taking account of a one-off deferred tax charge in the period of £983,000 in respect of an increase in the UK deferred tax liability arising on the abolition of Industrial Buildings Allowances. The impact of this change was to increase the tax rate for the six months ended 30 September 2008 to 46.1%.
5. Earnings per share
The calculated basic and diluted earnings per share are based on the following:
|
6 months ended |
6 months ended |
Year ended |
|
|
30 September 2009 |
30 September 2008 |
31 March 2009 |
|
|
£000 |
£000 |
£000 |
|
|
Profit/(loss) for the period |
2,656 |
1,690 |
(21,299) |
Adjusted earnings per share is arrived at using the following earnings and share numbers:
|
6 months ended |
6 months ended |
Year ended |
|
|
30 September 2009 |
30 September 2008 |
31 March 2009 |
|
|
£000 |
£000 |
£000 |
|
|
Profit/(loss) for the period |
2,656 |
1,690 |
(21,299) |
|
Amortisation of acquired intangible assets |
4,469 |
3,609 |
8,628 |
|
Impairment of acquired intangible assets |
- |
- |
26,127 |
|
Impairment of plant and equipment |
- |
- |
2,500 |
|
Business improvement programme costs |
- |
1,388 |
6,826 |
|
Fair value (gains)/losses on financial instruments |
(2,940) |
383 |
4,713 |
|
Exchange gains on re-denomination of borrowings |
(2,604) |
- |
- |
|
Impact of abolition of Industrial Buildings Allowances |
- |
983 |
983 |
|
Tax impact of the above |
357 |
(1,688) |
(9,793) |
|
1,938 |
6,365 |
18,685 |
|
|
Weighted average number of ordinary shares |
No. 000 |
No. 000 |
No. 000 |
|
For basic and adjusted earnings per share |
62,051 |
61,694 |
61,871 |
|
Effect of dilution: |
|||
|
Share options |
- |
233 |
90 |
|
For diluted earnings per share |
62,051 |
61,927 |
61,961 |
The adjusted earnings per share is considered to more appropriately reflect the underlying performance of the business. This reflects that the costs highlighted above are expected to be either non-recurring or not comparable between periods.
6. Dividends
|
6 months ended |
6 months ended |
Year ended |
|
|
30 September 2009 |
30 September 2008 |
31 March 2009 |
|
|
£000 |
£000 |
£000 |
|
|
Interim dividend for 2009: 2.70p |
- |
- |
1,679 |
|
Final dividend for 2009: nil (2008: 5.25p) per share |
- |
3,237 |
3,234 |
|
- |
3,237 |
4,913 |
The number of shares owned by the Employee Benefit Trust is 518,856 (518,856 at 30 September 2008 and 31 March 2009). The Employee Benefit Trust has waived its right to receive dividends. No final dividend for the year ended 31 March 2009 (2008: 5.25p) was proposed for shareholders approval at the Annual General Meeting and no interim dividend has been declared to date for the year ended 31 March 2010 (2008: 2.70p).
7. Property, plant and equipment
|
6 months ended |
6 months ended |
Year ended |
|
|
30 September 2009 |
30 September 2008 |
31 March 2009 |
|
|
£000 |
£000 |
£000 |
|
|
Opening net book value |
40,251 |
40,191 |
40,191 |
|
Additions |
1,769 |
4,043 |
9,221 |
|
Acquisition of subsidiary |
- |
- |
988 |
|
Impairments |
- |
- |
(2,500) |
|
Disposals |
- |
(44) |
(201) |
|
Depreciation |
(5,333) |
(4,512) |
(10,204) |
|
Exchange difference |
(623) |
(935) |
2,756 |
|
Closing net book value |
36,064 |
38,743 |
40,251 |
8. Capital commitments
At 30 September 2009, the Group had capital commitments of £1,463,000 (30 September 2008: £2,864,000; 31 March 2009 £2,035,000) principally relating to the acquisition of new plant and machinery.
9. Goodwill
|
6 months ended |
6 months ended |
Year ended |
|
|
30 September 2009 |
30 September 2008 |
31 March 2009 |
|
|
£000 |
£000 |
£000 |
|
|
Opening net book value |
78,076 |
58,416 |
58,416 |
|
Acquisition of subsidiary (see note) |
634 |
- |
26,027 |
|
Impairments |
- |
- |
(19,171) |
|
Exchange adjustment |
(3,643) |
(319) |
12,804 |
|
Closing net book value |
75,067 |
58,097 |
78,076 |
The acquisition costs in the six months arise due to a restatement of the fair value on acquisition of QP Semiconductor Inc. in 2008/09.
10. Net borrowings
|
6 months ended |
6 months ended |
Year ended |
|
|
30 September 2009 |
30 September 2008 |
31 March 2009 |
|
|
£000 |
£000 |
£000 |
|
|
Cash at beginning of period |
6,373 |
5,806 |
5,806 |
|
Loans at beginning of period |
(143,664) |
(100,217) |
(100,217) |
|
Net borrowings at beginning of period |
(137,291) |
(94,411) |
(94,411) |
|
Increase/(decrease) in cash |
12,445 |
628 |
(853) |
|
Proceeds from borrowings |
- |
- |
(38,152) |
|
Repayment of borrowings |
10,939 |
5,097 |
15,451 |
|
Exchange differences - cash |
578 |
112 |
1,420 |
|
Exchange differences - loans |
8,161 |
534 |
(20,746) |
|
Total movement in net borrowings |
32,123 |
6,371 |
(42,880) |
|
Cash at end of period |
19,396 |
6,546 |
6,373 |
|
Loans at end of period |
(124,564) |
(94,586) |
(143,664) |
|
Net borrowings at end of period |
(105,168) |
(88,040) |
(137,291) |
Net borrowings exclude capitalised borrowings costs which amounted to £1,960,000 at 30 September 2009, £1,029,000 at 30 September 2008 and £1,092,000 at 31 March 2009.
11. Retirement benefit obligations
Defined contribution plans
The Group has defined contribution plans in the UK and North America, covering substantially all of its employees, which require contributions to be made to a separately administered fund. The Group contributes to state schemes for European activities. Such schemes are defined contribution schemes and there is no Group exposure to any scheme liabilities.
Retirement benefit plan
In addition to the state pension scheme, the French overseas subsidiary based in Grenoble has a defined benefit retirement plan where there is an obligation to provide termination allowances and benefits called 'Medailles du Travail'. This is an unfunded plan and the actuarial liability has been calculated at 30 September 2009 by a qualified actuary using the projected unit credit method. The cost of providing these benefits is charged to the income statement in the period in which those benefits have been earned by the employees. Actuarial gains and losses are recognised in full in the period in which they arise and are recognised in the statement of comprehensive income.
12. Share based payments
Full details regarding share based award schemes operated by the Group are disclosed in the Group's annual financial statements as at 31 March 2009. During the period, under the 'Long Term Incentive Plan' 179,200 awards lapsed and 540,600 awards were granted, under the 'Executive Share Option Plan'149,500 awards lapsed and there were no awards granted. A new 'Sharesave Scheme' was launched on 17 July 2009, with a scheme contract commencement date of 1 November 2009, at 57p per share.
13. Related party disclosure
Transactions between Group subsidiaries have been eliminated on consolidation. A list of subsidiaries can be found in the notes to e2v technologies plc, the parent company, financial statements in the Group's 2009 Annual Report
14. Events after the end of the reporting period
Since the end of the reporting period the Group has announced:
The potential accelerated restructuring programme, whose cost is anticipated to be approximately £33m and is anticipated to realise annual cost savings of approximately £26m after completion.
A firm placing and rights issue to raise £55.8m of equity in order to reduce borrowings and strengthen the Group's balance sheet. This is subject to shareholder approval.
A new three year banking facility that becomes available on completion of the firm placing and rights issue.
NOTES FOR EDITORS
e2v
e2v's objective is to be a global leader in the design and supply of specialised components and sub-systems that enable the world's leading systems companies to deliver innovative solutions for medical & science, aerospace & defence, and commercial & industrial markets.
e2v is organised into four divisions:
High performance electron devices and subsystems for applications including defence electronic countermeasures, radiotherapy cancer treatment, radar systems, industrial heating, satellite communications amplifiers and digital television transmitters.
Advanced CCD and CMOS imaging sensors and cameras for applications including space, science and life science imaging, industrial process control, intra-oral and panoramic dental X-ray systems, military surveillance and automotive imaging.
Specialist Semiconductors - including logic, memory and microprocessors for high reliability microprocessor and MRAM requirements, in partnership with Freescale Semiconductor and Everspin, mission-critical avionics and defence programs requiring high reliability integrated circuits, high speed data converters and sensor data acquisition utilising mixed signal application specific devices.
A range of professional sensing products for applications including environmental safety, x-ray spectroscopy, automotive alarm and security systems, microwave radar and safety and arming devices, fire rescue and security thermal imaging.
For the year ended 31 March 2009, e2v achieved sales of £233m and is listed on the London Stock Exchange. In October 2008 e2v acquired QP semiconductor, a leading US-based designer and supplier of specialty semiconductor components used in military and aerospace applications, establishing e2v's first US manufacturing base.
The Company is headquartered in the United Kingdom and has approximately 1700 employees in six production facilities across Europe and North America. e2v also operates a global network of sales and technical support offices, supported by local distributors and resellers.
Further information is available from www.e2v.com
Related Shares:
E2V.L