Interim Results 2008 Belgium Denmark Finland France - - PowerPoint PPT Presentation

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Interim Results 2008 Belgium Denmark Finland France - - PowerPoint PPT Presentation

Sep 16, 2023 226 likes •498 views

Interim Results 2008 Belgium Denmark Finland France Germany Iberia Italy Netherlands Norway Sweden UK Richard Moon Chairman 2 Belgium Denmark Finland France Germany

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Interim Results 2008

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Richard Moon Chairman

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Agenda Chairman – Introduction and Overview Finance Director – Financial review Executive Directors – Q&A

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Overview

Restructured Board, new Chief Executive Net cash of £16.9 million Post half-year end consideration of £16.2 million from sale of MessageLabs Group - £15.1 million received November 2008 subject to tax at 28% Sales resilient, margins under pressure Rebased interim dividend of 3.5 pence per share Impairments Westech, goodwill

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Management Team

Nick Jefferies Chief Executive Officer Malcolm Cooper Finance Director Stephen Sydes Electronics Divisional MD

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Malcolm Cooper Financial review

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Westech Electronics

  • Associate listed on Singapore stock exchange
  • $35 million bad debt - 54% of trade receivables
  • Attempting to negotiate standstill arrangement
  • Balance sheet value £5.0 million at September 2008
  • Goodwill associated with investment £0.03m
  • Investment fully impaired and disclosed as an exceptional item

in half year results

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MessageLabs Group (MLG)

  • 3.95% investment held at cost - £0.3 million
  • Sale to Symantec completed November 2008 for c £400 million
  • £15.1million received 14 November 2008
  • £1.15m held in escrow against warranty claims
  • Gain subject to tax at prevailing rate of 28%
  • Disclosed as post balance sheet event
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Exceptional Items

£m Write back of unutilised provision for retained

  • bligations

0.8 Costs of termination of Board Director contracts (0.8) Impairment of goodwill (4.2) Impairment of associate investment (5.0) Exceptional Items (9.2)

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Interim results

Continuing operations Half year to 30 September Year to 31 March £m 2008 2007 2008 Sales 79.8 77.6 159.5 Operating profit 1.0 2.8 6.1 Associates (post-tax)

  • 0.5

0.7 Net finance revenue/(cost) 0.2 (0.7) (0.8) Profit before exceptional items 1.2 2.6 6.1 Exceptional items (9.2)

  • (3.5)

(Loss)/profit before tax - continuing

  • perations

(8.0) 2.6 2.6 (Loss)/profit after tax (8.0) 1.8 0.5 Basic earnings per share excluding exceptional items 2.4p 6.7p 14.5p Dividends per share relating to period 3.5p 7.2p 21.9p

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Divisional results

£m

30-Sep-08 30-Sep-07 31-Mar-08

Electronics 51.3 50.1 103.1 Parts 25.1 23.9 48.3 Medical & Scientific 3.4 3.6 8.1 Revenue 79.8 77.6 159.5 Electronics 1.4 1.7 3.2 Parts 0.5 1.7 3.3 Medical & Scientific 0.5 0.6 1.3 Unallocated Costs (1.4) (1.2) (1.7) Operating Profit 1.0 2.8 6.1

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Change in revenue

2007 70.0 72.0 74.0 76.0 78.0 80.0 82.0 84.0 2007 Exchange Rates Electronics Parts Scientific & Medical 2008

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Change in Operating Profit

Exchange Rates Electronics Parts Medical & ScientificHead Office 2008 £2.8m

  • 0.5

1.0 1.5 2.0 2.5 3.0 2007 Exchange Rates Electronics Parts Medical & Scientific Head Office 2008

  • 0.5

1.0 1.5 2.0 2.5 3.0 2007 Exchange Rates Electronics Parts Medical & Scientific Head Office 2008

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Income Statement highlights

Gross Margin

  • Decrease from 29.7% to 27.2% for half year
  • Reflects margin pressure in Electronics & Parts Services divisions

Overheads (excluding exceptional items)

  • Net Operating Expenses £20.7m compared to £20.3m last year
  • Electronics employees reduced from 379 to 348 over half year
  • Electronics centralisation largely complete
  • Parts Services employee numbers stable
  • Continuing focus on controlling overheads

Taxation (ongoing activities excluding associates)

  • Effective Tax Rate of 45.3% compared to 38.9% last year
  • Rate affected by unrelieved losses in Continental Europe
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Balance Sheet Highlights

30 September 31 March 2008 2007 2008

Equity Shareholders’ Funds £89.3m £75.2m £100.7m Net Cash/(Debt) £16.9m £(11.1)m £25.6m

  • Reduction in shareholders’ funds:

Impairment of Associate investment £(5.0) million, Impairment of goodwill £(4.2) million Dividend £(3.9) million

  • Excludes valuation of MessageLabs Group – additional £15.9 million
  • IAS 19 pension liability £3.3m (March 2008: £3.8m) reflects contributions paid

Triennial actuarial valuation March 2009

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Net trading assets

Continuing operations 30 Sept 2008 31 March 2008 30 Sept 2007 Current Assets Stock Debtors 23.0 36.5 19.3 36.0 18.8 28.2 Current Liabilities Creditors (35.0) (34.2) (23.2) Net Trading Assets 24.5 21.1 23.8

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Consolidated cash flow

£m Half year to 30 September Year to 31 March 2008 2007 2008 Cash (expended)/generated from

  • perations

(2.9) 0.9 6.7 Capital expenditure less disposals (0.7) (0.3) (0.9) Proceeds from sale of businesses

  • 38.5

Tax (1.6) (1.7) (5.7) Interest 0.2 (0.8) (1.2) Dividends paid (3.9) (3.9) (5.8) Other 0.2 (0.1) (0.8) Net cash (outflow)/inflow (8.7) (5.7) 31.0 Net Cash/(Debt) at period end 16.9 (11.1) 25.6 Net cash increased by Message Labs proceeds of £15.1 m in November 2008 Cash flows include disposed activities

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Cash generated from operations

£m Half year to 30 September Year to 31 March 2008 2007 2008 Operating profit – continuing – disposed 1.0

  • 2.8

1.9 2.6 2.0 Depreciation and amortisation 0.9 1.3 4.6 Increase in working capital (2.9) (4.3) (1.4) Pension scheme funding (0.6) (0.6) (1.6) Movement in provisions (1.3) (0.3) 0.3 Other

  • 0.1

0.2 Cash generated from operations (2.9) 0.9 6.7 Net Cash/(Debt) at period end 16.9 (11.1) 25.6

Prior period cash flows include disposed activities

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Businesses

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Acal’s Businesses

Electronics

Design in and Production fulfilment of a range of complementary technology products comprising semiconductors, power solutions, system components (boards and assemblies), microwave & wireless devices, passive, timing/frequency control and electromechanical components

Parts Services

Supply and management of parts primarily for the IT industry, product support for service organisations and third party maintenance companies servicing PC’s, printers, servers, mainframes , ATM’s and EPOS

Medical & Scientific

Vertec Scientific is a supplier of medical and scientific equipment to the healthcare marketplace including as the UK's No.1 supplier of Osteoporosis Diagnosis equipment (DEXA scanners) as well as the UK's largest supplier of mini surgical c-arms

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Electronics

Sales £m

2007 2008 2007 2008

50.1

Half Year to 30 September

  • Market weak, volatile, no consistency in industry forecasts
  • Increasing market share, product profile developing
  • Organisational changes in Germany & Nordic showing positive

results

  • Benelux, France suffering this year
  • Margin pressure through mix changes, exchange rate volatility &

supplier policy changes

  • Centralisation of support functions completed, overhead

reduction programme executed

EBIT % of Sales: 3.4% 2.7% Change: 2.4% 1.7 51.3 1.4

EBIT £m

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Parts Services

Half Year to 30 September

Sales £m

2008

23.9 25.1

2007

  • Weak demand and pricing pressures have led to year-on-year

reduction in sales and margins from existing business

  • Costs associated with major new contract started in May 2008

higher than anticipated

  • Actively progressing initiatives to enhance division’s performance

Change: 5.0%

EBIT £m

2007 2008

1.7

EBIT % of Sales: 5.2% 5.9%

0.5

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Medical & Scientific

Half Year to 30 September

Sales £m

2008

3.6 3.4

2007

  • A very well established supplier to the UK and recently South

African healthcare marketplace

  • Economic downturn has affected the business, but to a lesser

extent than many competitors

  • Margins have remained stable
  • South African focus moving to the public sector, as the private

marketplace is feeling the impact of the recession.

Change: (5.6)%

EBIT £m

2007 2008

EBIT % of Sales: 16.7% 14.7%

0.5 0.6

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Current trading & outlook

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Current trading and outlook

  • Recent market trauma, exchange & interest rate volatility - difficult to accurately

project short-term performance

  • Significant strain on electronics margins in short-term due to exchange rate

movements

  • Parts Services sales/margins remain under pressure
  • Vertec business maintaining sound performance
  • Businesses prepared for more difficult trading conditions
  • Strong cash position provides opportunity for selective acquisition opportunities

that may present themselves