Trading Statement

24 January 2017

LAIRD PLC (the "Company")

FULL YEAR UPDATE ON TRADING AND FINANCIAL POSITION

Laird plc, the global technology company, today announces a trading update and notice of results for its financial year ended 31 December 2016.

Overview

Overall trading for the year has been consistent with the statements issued on 19 October and 2 December 2016. We continue to expect full year underlying profit before tax to be around £50 million and the year-end net debt to EBITDA to be within the Group's pre-existing covenant of 3.5x.

We are on track to announce a proposed rights issue with our full year results to raise up to £185 million, underwritten on a standby basis by JP Morgan Cazenove (as announced on 2 December 2016).

Debt facilities and covenants

Discussions with our debt providers were successfully completed in December 2016. Whilst we expect year end net debt to EBITDA to be within our pre-existing covenant limit of 3.5x, we agreed a one-time extension of the covenant to 4.0x net debt to EBITDA for the period ended December 2016 as a precaution.

Group Performance

Revenue for the year grew 27% to £802m (2015: £630m). On an organic basis at constant currency1, revenue was down by 0.4%.

Revenue in sterling for the fourth quarter grew by 38% to £227m (Q4 2015: £164m). On an organic basis at constant currency1, revenue was up 9%.

Revenue growth in the fourth quarter was underpinned by continued growth in Wireless Systems and improved performance from Performance Materials, as the ramp up in production normally seen earlier in the second half came through later in the year.

The operational improvement programme remains on track. As previously stated, the programme will deliver annualised savings of at least $20m from 2018, with $15m expected in 2017. The total P&L cash cost of the project remains at c.$60m, much of which was provided for in 2015, with c.$30m paid by the end of 2016 and the balance of c.$30m to be invested in 2017.

Divisional Performance

Wireless Systems

Wireless Systems revenue for the year grew 59% to £373m (2015: £235m). On an organic basis at constant currency1, revenue grew 4%.

Revenue in the fourth quarter grew 67% to £105m (Q4 2015: £63m). On an organic basis at constant currency1, revenue grew by 8%.

Revenue growth for the full year and the quarter was driven by continued good performance in both Connected Vehicle Solutions (CVS) and Connectivity Solutions (CS), partially offset by the trading challenges in our Wireless Automation and Controls business (WACS). Actions taken in Novero, the business acquired in January 2016 and which forms part of CVS, have now stabilised the business and we continue to expect to deliver modest profitability at Novero in 2017.

Performance Materials

Performance Materials revenue for the year grew 9% to £429m (2015: £395m). On an organic basis at constant currency1, revenue was lower by 3%.

Revenue in the final quarter was 21% higher, year on year, at £122m (Q4 2015: £101m). On an organic basis at constant currency1, revenue was 10% higher. 

The Division performed in line with expectations in the quarter having had a weaker Q3, with slightly improved margins in Precision Metals. Actions have been taken to improve performance in Precision Metals and with our new Divisional President Carmen Chua joining in February 2017 the review of this business will continue.

Commenting on today's announcement Tony Quinlan, Chief Executive, said:

"We are pleased to confirm that trading for 2016 was in line with our revised expectations, albeit substantially reduced. We have taken decisive actions to address the issues affecting profitability in 2016 and the proposed rights issue to strengthen the balance sheet remains on track.

Laird remains well positioned to take advantage of strong market trends for many of its products and is investing to benefit from these in the future. At the same time, we will maintain a resolute focus on improving the financial performance of the business and the operational improvement programme will help drive efficiencies and more closely align Laird with customers."

 Notice of Full Year Results

The Group's full year results for 2016 will be announced on Tuesday, 28th February 2017.

1Organic constant currency growth is calculated by eliminating the revenue from acquisitions made for a period of twelve months from the acquisition date, and applying prior year exchange rates to convert current year revenues to GBP. The Directors believe that this measure provides investors with information regarding the underlying revenue performance of the Group as it eliminates the effect of acquisitions and the translation effect of currency exchange movements from period to period. Reconciliations to IFRS measures will be provided with the full year results.

This announcement contains inside information 

About Laird:

Laird is a global technology company providing systems, components and solutions that protect electronics from electromagnetic interference and heat, and that enable connectivity in mission-critical wireless applications and antennae systems. Laird is a global leader in the field of innovative radio frequency ("RF") engineering.

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