PRELIMINARY RESULTS Year ended 31 March 2010 2 June 2010
Agenda � Introduction Richard Moon � Operational review Nick Jefferies � Financial review Paul Neville � Strategy and current trading Nick Jefferies 2
A year of change and progress � Trading improves with return to profitability and growth in order book � Acquisition of BFi Optilas completed and will achieve > £4.4m p.a. (€5m) operational savings � Specialisation strategy progressively implemented across Electronics division and repositions the Group � Supply Chain stable following acquisition of SSE � Strong net cash position of £13.9m at end of March 2010 � Maintained full year dividend of 7.0p (final 4.67p) 3
Agenda � Introduction Richard Moon � Operational review Nick Jefferies � Financial review Paul Neville � Strategy and current trading Nick Jefferies 4
Highlights � Second half much better than first half, return to profitability � Improving sales trends � Significant operational improvements � Positive operating cash flow, strong net cash position � BFi Optilas trading profitably from day one, integration proceeding well � Specialisation strategy making good progress � Continued trading improvement since the year end 5
Improved operating performance Op Profit /Loss £m Sales £m � Return to profitability in second half � Recovery in volumes – 11% sequential (excluding BFi) � Benefit of cost savings made in H1 0.7 � Return to year on year growth � Group Orders increased 16% in March � Group Sales increased 6% in March � Customer order pipeline up 22% (Electronics) � BFi Optilas included for 4 months H2 2010 H1 2009 H2 2009 H1 2010 � Profitable from day one (£0.7m) � Sales of £30.5m Increasing sales, combined with decisive action to reduce operating expenses and working capital and increased gross margins, returns Group to profitability. Enhanced by BFi acquisition. 6
Improved gross margins � Gross margin increased 1.1% points year-on- year � Underlying margin stable in second half � BFi enhances Group gross margin by c.0.2% � c.0.4% annualised � Specialisation strategy focuses on higher margin products 7
Reduced operating expenses £m � Operating expenses reduced by 12% on comparable basis, £5.9m year-on-year � £1.1m associated exceptional cost � H2 operating expenses maintained at H1 level despite increased volumes � Further cost reductions underway in Supply Chain � BFi expenses of £8m for the 4 months � 13% reduction year-on-year 8 Note: Operating Expenses (adjusted) are at constant exchange rates and include SSE for comparable periods
BFi Optilas integration proceeding to plan � Mid way through integration � Plan to complete by March 2011 � On track to achieve synergies p.a. > £4.4m (€5m), c.10% of combined cost base � Maintaining separate trading divisions � Acal Technology and BFi Optilas � Common warehouses, IT, F&A � Opportunities for additional revenue � Selective cross selling of product offer � Increased attractiveness to new suppliers 9 Includes BFi on a like for like basis
Lower working capital £m � Working capital reduced by £10.1m, 38% since 31 March ’09 � Reduced to 12.7% as a percentage of sales (including acquisitions) � Operating cash flow before exceptional and pension payments positive £9.5m � Specialisation strategy reduces requirements for uncommitted inventory 10 Working capital defined as net inventory, trade debtors plus other receivables less trade payables and other payable
Agenda � Introduction Richard Moon � Operational review Nick Jefferies � Financial review Paul Neville � Strategy and current trading Nick Jefferies 11
Profit and Loss Account £m H1 FY10 H2 FY10 FY 10 FY09 Change � Operating performance (H2) Revenue - Sales improvement (+11%) - Existing 71.5 79.6 151.1 165.4 -8.6% - Gross margin improvement (+0.2pts) - Acquisition – BFi 30.5 30.5 71.5 110.1 181.6 165.4 +9.8% - Operating expense reduction Gross Margin 27.4% 27.6% 27.6% 26.5% +1.1% � Interest charge Operating (loss) / profit - H2 reduced to zero (1.7) 1.2 (0.5) 0.4 (adjusted) Exceptional items (0.4) (4.3) (4.7) (33.1) � Tax charge Finance (cost)/income - Small charge reflects profits in UK and (0.2) - (0.2) 0.5 (excluding IAS19) unrelieved losses in mainland Europe. (Loss) / profit before tax (1.9) 1.2 (0.7) 0.8 - £24m losses to c/fwd (adjusted) Loss before tax (2.7) (3.6) (6.3) (32.6) � EPS H2 to profit of 1.3p per share Taxation (0.1) (0.2) (0.3) (4.4) reducing loss for year to 8.2p per share � Dividend maintained at 7p per share Basic loss per share (9.5p) 1.3p (8.2p) (3.8p) excluding exceptional items Dividends per share relating 2.33p 4.67p 7.0p 7.0p to period 12
Divisional results - sales � H2 on H1 sales increase excl BFi of 11.3% - Electronics 8% excl BFi £m H1 H2 Absolute Underlying FY10 FY10 FY10 FY09 Change Change - Supply Chain 12% - Medical 48% Electronics (Acal) 39.4 42.5 81.9 103.7 -21.0% -23.5% � Year on year underlying decline 16.3% BFi 30.5 30.5 Absolute decline 8.6% Electronics Total 39.4 73.0 112.4 103.7 FX impact 2.5% Supply Chain 29.2 32.8 62.0 54.2 14.4% -5.6% SSE acq’n in Jan 09 5.2% Medical 2.9 4.3 7.2 7.5 -4.0% -7.7% Underlying decline 16.3% Revenue 71.5 110.1 181.6 165.4 9.8% � Underlying revenue reflects: (reported) Electronics Revenue (exc. 71.5 79.6 151.1 165.4 -8.6% -16.3% - Market decline 16% BFi) H2 on H1 increase 11.3% - Loss of Linear Tech franchise 8% Supply Chain 6% Medical 8% 13
Divisional results – adjusted operating profit £m H1 FY10 H2 FY10 FY10 FY09 � H2 operating profit of £1.2m reduces full year Electronics (Acal) (1.5) 0.6 (0.9) 0.9 operating loss to £0.5m - All divisions profitable in H2 BFi 0.7 0.7 Electronics Total (1.5) 1.3 (0.2) 0.9 � Electronics profit in H2 of £1.3m includes £0.7m BFi for 4 months - Sales in H2 increased 8% on H1 Supply Chain 0.6 0.6 1.2 1.1 - Opex reduced during year by £4.7m (18%) Medical 0.3 0.5 0.8 1.0 � Supply Chain profit up £0.1m - Underlying sales 6% down after adj for SSE acquisition in prior year Unallocated costs (1.1) (1.2) (2.3) (2.6) � Medical H2 improvement on H1 but delayed NHS expenditure gives lower full year result than prior year Adjusted operating (loss)/ profit (1.7) 1.2 (0.5) 0.4 14 Adjusted operating profit – operating profit before share-based payments, amortisation of intangible assets and exceptional items
Exceptional operating items £m FY FY 2010 2009 Integration restructuring costs 2.4 - Other restructuring costs 1.9 2.6 Goodwill impairment 0.3 41.8 Sale of investment in MessageLabs 0.1 (15.9) Other - (0.8) Operating exceptionals 4.7 27.7 � Integration restructuring costs primarily relate to provision for closure of Netherlands warehouse and other office closures as well as certain termination costs -Total synergy savings forecast p.a. > £4.4m (€5m) � Other restructuring costs relate to; - Expense reductions £1.1m - Director terminations /other £0.8m � Goodwill relates to impairment of ATM Parts Company Ltd in Supply Chain division 15
Balance sheet £m 31 March 31 March Var � Movements in net assets: £’m 2010 2009 Prop, plant & equip 3.9 4.7 (0.8) � Loss after tax (6.6) Intangible assets 16.5 15.0 1.5 � Translation differences (0.6) Working capital 30.8 26.7 4.1 � IAS 19 / LTIP (0.2) Tax (including deferred) (0.2) (2.6) 2.4 � Purchase of MI (0.4) Provisions (7.5) (4.0) (3.5) � New share capital 2.7 Pensions (5.5) (5.7) 0.2 � Dividends (1.6) Net cash 13.9 24.5 (10.6) (6.7) Net assets 51.9 58.6 (6.7) • Balance sheet reflects BFi acquisition and maintains strong net cash balance of £13.9m • Working capital – underlying reduction (31 March 2010 includes £14m for BFi) • Provisions include certain synergy provisions for exceptional costs 16
Pension Update � IAS 19 pension liability £5.5 million (31 March 09: £5.7 million) � Update on Fund Actuarial Valuation � Triennial actuarial valuation at Dec 2009 agreed at £11.2m deficit (previous estimate £15m) � New funding from 1 April 2010 - for two years at reduced 50% rate of £0.65m from 1 April 2010 - followed by further 10 years starting at £1.5m indexed by 3% p.a. to £2.0m for y/e 2022 17
Working capital balances � Working capital - Underlying reduction of £8.6m (32%) Working Capital as % of sales � Inventories - £8.0m (32%) reduction since 31 March 09 - Electronics reduced by 48% since 1 Jan 09 - Turns increased from 5.3 to 7.5 � Receivables - Group Days Sales Outstanding maintained at 51 days -Excluding BFi reduced by 5 days to 46 days � Working capital as % of sales - Including BFi annualised is12.7% due to larger European debtors 18
Movement in net cash Underlying £m FY10 FY10 FY09 Operational cash flow 5.2 8.2 (2.4) Capital expenditure less disposals 0.3 (0.8) (1.2) Proceeds from sale of investments 1.0 - 15.1 Acquisitions (11.7) - (4.4) Interest (net)/associate dividends (0.2) (0.2) 0.8 Dividends paid (1.6) (2.0) (4.8) Tax (3.1) (0.7) (3.4) Net cash flow (10.1) 4.5 (0.3) Exchange /other 0.5 (0.8) Debt acquired (1.0) - Net cash movement (10.6) (1.1) Opening cash 24.5 25.8 Net cash at 31 March 13.9 24.5 � Underlying net cash flow before exceptionals positive of £4.5m 19
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