RNS Number:6614S
Acal PLC
01 December 2003
FOR RELEASE 7:00AM 1 DECEMBER 2003
ACAL plc
(Leading pan-European, value added distributor providing specialist design-in,
sales and marketing services for international suppliers)
Unaudited Interim Results for the six months to 30 September 2003
2003 2002 Change
Turnover #127.1m #140.2m -9%
Group earnings before interest, taxes and goodwill #6.7m #8.1m -17%
amortisation
Profit before tax (pre goodwill amortisation) #5.9m #7.3m -19%
Earnings per share (pre goodwill amortisation) 14.1p 18.5p -24%
Dividend 7.0p 6.7p +41/2%
* Sound results in a demanding environment
* Gross margins increased in all divisions - over 2 percentage points
better overall
* Further growth in dividend: Up 41/2% to 7.0p
* Positive first-time contribution from Computer Parts International
acquired in May 2003
* Signs of improvement in order rate
* Well positioned to take advantage of growth opportunities
For further information:-
John Curry - Chairman 01483 544500
Jim Virdee - Finance Director 01483 544500
Brian Coleman-Smith/James Chandler 020 7398 3300
Beattie Financial
Notes to Editors:
1 The Acal Group is a leading European, value-added distributor providing
specialist design-in, sales and marketing services for international
suppliers in the fields of Electronic Components, Information Technology
Products, IT Parts Services and Industrial Controls. 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, Scandinavia and the USA.
CHAIRMAN'S STATEMENT
The demanding environment of the last two years has persisted throughout this
half year, with Continental Europe weaker than the UK. Recovery in our industry,
which has been seen in the USA and the Far East, has not as yet arrived in
Europe.
Our results are sound with a good return on capital employed, although below our
targets. In spite of the market pressures year-on-year, we have achieved an
increased gross margin in all divisions, giving an overall improvement from
23.6% to 26.4% which has partly compensated for the lower sales level.
Results
Headline sales fell 9% from #140.2m to #127.1m. However, excluding acquisitions
and disposals, the underlying fall was 6% (made up of a 2% fall in the UK and
10% in Continental Europe). This pattern of weaker trading in Continental Europe
was reflected broadly across all divisions.
Below is a table showing each of the divisions' half-year results.
2003/4 2002/3
Sales EBITA Sales EBITA
------ ------------------------ ------ -----------------------
#m #m % of sales #m #m % of sales
Electronic 43.7 1.6 3.7% 48.4 1.9 3.9%
Components
------ ----- ------- ------ ----- -------
Industrial 8.8 0.5 5.7% 9.6 0.5 5.2%
Controls
------ ----- ------- ------ ----- -------
Components 52.5 2.1 4.0% 58.0 2.4 4.1%
TOTAL
------ ----- ------- ------ ----- -------
IT Products 45.4 1.8 4.0% 53.4 3.0 5.6%
IT Parts
Services 29.2 2.6 8.9% 28.8 2.5 8.7%
------ ----- ------- ------ ----- -------
IT TOTAL 74.6 4.4 5.9% 82.2 5.5 6.7%
------ ----- ------- ------ ----- -------
127.1 6.5 5.1% 140.2 7.9 5.6%
Associates 0.2 0.2
------ ----- ------ -----
127.1 6.7 140.2 8.1
====== ===== ====== =====
Chairman's Statement
Continued. ....
It will be seen that the reduction in profit has occurred mainly in the IT
Division. In IT Products, the results for the previous year included sales of
#9.3m relating to the CISCO distribution business sold in October 2002. In the
ongoing business, sales and gross margins have been maintained but investments
made in people and infrastructure have not yet borne fruit, in hindsight
probably because they have been made too early in the cycle. We have had
satisfactory growth in the SAN/Fibre Channel part of the division, our
difficulties lie in networking and security.
HP/Compaq has changed its service strategy and as a result EAF, the original
part of the IT Parts Services division, has suffered a setback. We overcame a
similar setback a few years ago and plan to do so again. In the meantime the
reduction in like-for-like sales of 13% and profits of 20% have been balanced by
the acquisition of Computer Parts International.
On a positive note, UK Electronic Components profits year-on-year have improved
marginally in spite of a 5% reduction in sales, but a 14% fall in sales in the
same period in Continental Europe has resulted in a decline in profits. It is
pleasing to report that a number of major suppliers have either appointed us or
increased our geographical coverage across Europe since the beginning of this
year.
Dividend
The Board has declared an interim dividend of 7.0p net per share (6.7p), an
increase of 4.5%. This will be paid on 26 January 2004 to shareholders on the
register on 12 December 2003.
Board Appointment
I am pleased to announce the appointment of Graham Williams as a non-executive
director. His early career was entrepreneurially based in the private equity
market in the UK and France with Charterhouse and Barclays, followed by an
executive director role helping to build Hays plc, an international support
services group, into a FTSE 100 company. I know his experience will be
invaluable to Acal.
Current Trading
Distribution companies in our sectors with a presence in the USA and the Far
East have reported signs of growth in sales. Although not yet reflected in
sales, our current order rate is greater than in the early part of the year. At
the time of writing, the last quarter (September, October, November) shows signs
of monthly bookings being 10% greater than the average rate for the first five
months, and above the level for the corresponding quarter last year.
Though we do not expect a rapid increase in sales, these limited signs of
growth, together with the maintenance of increased gross margin should provide
benefits in the second half results.
The business remains financially strong, well positioned and able to take
advantage, as it has in the past, of the long term growth opportunities which
exist in our industry.
John Curry
1 December 2003
ACAL plc
Unaudited Summary Profit and Loss Account for
Six Months ended 30 September 2003
Six Months ended Year ended
30 September 31 March
2003 2002 2003
(audited)
#'000 #'000 #'000
Turnover
Continuing business
Ongoing activities 122,843 130,947 262,846
Activities sold (note 4) - 9,295 9,295
Acquisition 4,296 - -
-------- -------- --------
127,139 140,242 272,141
======== ======== ========
Operating Profit
Continuing business 5,878 7,910 16,710
Goodwill amortisation (1,400) (1,373) (2,774)
-------- -------- --------
4,478 6,537 13,936
-------- -------- --------
Acquisition 581 - -
Goodwill amortisation (89) - -
-------- -------- --------
492 - -
-------- -------- --------
Group Operating Profit 4,970 6,537 13,936
(excluding Associates)
Group Share of Operating 238 250 440
Profits of Associates
-------- -------- --------
Total Operating Profit
(including Associates)
Excluding goodwill 6,698 8,161 17,152
amortisation
Goodwill amortisation (1,490) (1,374) (2,776)
-------- -------- --------
5,208 6,787 14,376
Profit on disposal of - - 575
business
Net interest payable and (795) (778) (1,452)
similar charges - group
Net interest payable - (24) (62) (108)
associates
Profit before Taxation
Excluding goodwill amortisation
Continuing business 5,406 7,321 16,167
Acquisition 473 - -
-------- -------- --------
5,879 7,321 16,167
Goodwill amortisation (1,490) (1,374) (2,776)
-------- -------- --------
Profit on Ordinary Activities
before Taxation 4,389 5,947 13,391
Tax on Profit on Ordinary
Activities
United Kingdom (1,807) (1,535) (3,400)
Overseas (95) (903) (1,889)
Associates (98) (54) (73)
-------- -------- --------
(2,000) (2,492) (5,362)
-------- -------- --------
Profit after Taxation
Excluding goodwill
amortisation 3,879 4,829 10,805
Goodwill amortisation (1,490) (1,374) (2,776)
-------- -------- --------
Profit on Ordinary Activities 2,389 3,455 8,029
after Taxation
Minority Interest (169) - -
-------- -------- --------
Profit Attributable to Ordinary
Shareholders 2,220 3,455 8,029
Dividends on Ordinary Shares (1,844) (1,752) (5,262)
-------- -------- --------
Retained Profit for the Period 376 1,703 2,767
======== ======== ========
Earnings per Share 8.5p 13.2p 30.7p
======== ======== ========
Diluted Earnings per Share 8.4p 13.1p 30.6p
======== ======== ========
Earnings per Share Excluding 14.1p 18.5p 41.3p
Goodwill Amortisation ======== ======== ========
Dividends per share 7.0p 6.7p 20.1p
======== ======== ========
ACAL plc
Unaudited Balance Sheet
as at 30 September 2003
At 30 September At 31 March
2003 2002 2003
Restated (audited)
#'000 #'000 #'000
FIXED ASSETS
Intangible assets 49,047 47,681 46,287
Tangible assets 14,698 13,778 13,827
Investments 6,077 5,390 6,028
-------- -------- ---------
69,822 66,849 66,142
-------- -------- ---------
CURRENT ASSETS
Stocks 27,241 28,098 24,443
Debtors 48,180 50,504 53,242
Cash at bank and in hand 9,754 10,641 20,246
-------- -------- ---------
85,175 89,243 97,931
CREDITORS:
Amounts falling due within one year (58,366) (59,835) (65,413)
-------- -------- ---------
NET CURRENT ASSETS 26,809 29,408 32,518
-------- -------- ---------
TOTAL ASSETS LESS
CURRENT LIABILITIES 96,631 96,257 98,660
CREDITORS:
Amounts falling due after more than (20,420) (23,533) (22,487)
one year
PROVISIONS FOR LIABILITIES
AND CHARGES (595) (1,067) (2,279)
-------- -------- ---------
NET ASSETS - excluding pension 75,616 71,657 73,894
liability
Net pension liability (5,738) (1,223) (5,931)
-------- -------- ---------
NET ASSETS - including pension
liability 69,878 70,434 67,963
======== ======== =========
CAPITAL AND RESERVES
Called up share capital 1,317 1,308 1,309
Share premium account 37,668 37,009 37,109
Revaluation reserve 339 304 334
Profit and loss account and other
reserves 29,712 31,813 29,211
-------- -------- ---------
EQUITY SHAREHOLDERS' FUNDS 69,036 70,434 67,963
Minority interests (all equity) 842 - -
-------- -------- ---------
TOTAL CAPITAL EMPLOYED 69,878 70,434 67,963
======== ======== =========
ACAL plc
Unaudited Summary Cash flow Statement for
Six Months ended 30 September 2003
Six Months ended 30 September Year ended
31 March
2003 2002 2003
(audited)
#'000 #'000 #'000
OPERATING ACTIVITIES
Group operating profit 4,970 6,537 13,936
Depreciation and
amortisation 3,132 2,870 6,255
Profit on disposal of fixed
assets (25) (60) (110)
(Increase)/decrease in
working capital (2,127) (1,166) 3,493
-------- -------- --------
NET CASH INFLOW FROM
OPERATING ACTIVITIES 5,950 8,181 23,574
Dividends from associates 55 78 82
Net interest paid (795) (778) (1,527)
Tax paid (3,600) (3,193) (7,250)
Net expenditure on tangible
fixed assets and investments (2,007) (2,787) (4,869)
Net cash flow from acquisitions
and disposals (6,643) (6,405) (3,920)
Equity dividends paid (3,508) (3,181) (4,935)
-------- -------- ---------
NET CASH (OUTFLOW)/INFLOW
BEFORE FINANCING
(10,548) (8,085) 1,155
(Decrease)/ increase in
debt and finance leases (3,693) 7,045 6,570
Issue of share capital 567 227 328
-------- -------- ---------
NET (DECREASE)/INCREASE IN
CASH (13,674) (813) 8,053
======== ======== =========
Reconciliation of net cash flow to movement in net debt
NET (DECREASE)/INCREASE IN
CASH (13,674) (813) 8,053
-------- ---------
Cash outflow/(inflow) from
decrease/(increase) in debt
and lease financing
Issue of loan notes 3,693 (7,045) (6,570)
Debt acquired with - - (1,616)
subsidiary
New finance leases - (257) (257)
Translation differences - - (13)
(7) (123) (123)
-------- -------- ---------
MOVEMENT IN NET DEBT (9,988) (8,238) (526)
Net debt at beginning of
the period (13,404) (12,878) (12,878)
-------- -------- ---------
Net debt at end of the
period (23,392) (21,116) (13,404)
======== ======== =========
Unaudited Statement of Total Recognised Gains and Losses
For Six Months Ended 30 September
Six Months ended Year ended
30 September 31 March
2003 2002 2003
(audited)
#'000 #'000 #'000
Profit attributable to ordinary
shareholders 2,220 3,455 8,029
Actuarial loss on pension scheme - - (7,150)
Deferred tax relating to pension scheme - - 1,911
Net gain on currency translation 130 43 1,646
====== ======= =======
Total recognised gains and losses for the
financial period 2,350 3,498 4,436
====== ======= =======
NOTES:
1. The financial information set out above does not constitute the Company's
statutory accounts for the year ended 31 March 2003, but is derived from
those accounts. Statutory accounts for 2003 have been delivered to the
Registrar of Companies. The auditors have reported on those accounts; their
report was unqualified and did not contain a statement under section 237 (2)
or (3) of the Companies Act 1985.
2. These interim results have been prepared in accordance with the accounting
policies normally adopted by the Company and are consistent with those
adopted at 31 March 2003.
3. As disclosed in the 2003 Annual Report and Accounts, the Group now accounts
for pension costs and retirement benefits in accordance with FRS 17.
Accordingly the balance sheet at 30 September 2002 has been restated to
reflect a lower net pension liability, resulting in an increase in net
assets of #1,227,000. The effect on the Profit and Loss account for the 6
months then ended is not material. A #1,227,000 prior year adjustment was
recognised within the 31 March 2002 Statement of Total Recognised Gains and
Losses. FRS 17 requires an annual actuarial assessment of the defined
benefit pension schemes, which is carried out by independent actuarial
advisers. In the six months ended 30 September 2003 the Group has charged
the profit and loss account with #77,000 (period ended 30 September 2002:
#nil; year ended 31 March 2003: #75,000 credit) of notional interest in
respect of defined benefit schemes, all of which are closed schemes and
relate to the acquisition of Sedgemoor in 1999, on the basis of the 2003
actuarial assessment. This will be updated during the second half of the
year, and any actuarial gains and losses arising on pension assets and
liabilities in the balance sheet will be shown in the statement of total
recognised gains and losses for the year ending 31 March 2004.
4. Turnover of the Group's Cisco distribution business, which was sold in
October 2002, has been shown under "Activities sold".
5. The interim dividend is payable on 26 January 2004 to shareholders on the
register on 12 December 2003.
6. Earnings per share for the half year to 30 September 2003 have been
calculated on the profit attributable to ordinary shareholders of #2,220,000
using the weighted average number of ordinary shares in issue during the
period.
7. The company's interim report is being sent to shareholders by post. Copies
will 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
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