RNS Number:1394D
MTL Instruments Group PLC
03 September 2007
3 September 2007
The MTL Instruments Group plc
Interim Results for the six months ended 30 June 2007
The MTL Instruments Group plc is recognised as a world leader in the development
and supply of Intrinsic Safety, Process Control and Surge Protection products
aimed at the process control and telecommunications industries. Many of the
world's safety-critical processes are monitored, controlled or protected by MTL
products and the Group is distinguished by its global network of sales and
support centres and by its acknowledged position as a thought leader in this
high technology marketplace.
MTL has developed solutions which enable process control systems to be devolved
from the control room onto the process plant itself giving benefits of improved
control, integrity and cost savings. This has involved the combination of the
Group's four core technologies - Intrinsic Safety, Surge Protection,
Visualisation and Open Control Platforms.
Performance Summary
#m 1H07 1H06 Growth Growth
(at constant
currency)
--------------------------------------------------------------------------------
Orders 45.7 45.4 +1% +6%
Sales 43.9 41.4 +6% +12%
Profit before tax 4.1 3.6 +14% +35%
Basic EPS* 14.0 12.6 +11% +31%
Dividend per share (p) 3.2 2.9 +10% +10%
Highlights
*Hazardous Area - record order book in continuing strong market conditions
*Surge Technologies - continued growth in Industrial through the MTL
International Sales Channel
*Corporate activity - the three acquisitions made to date this year will
enhance expected organic growth
*Dividend increased in line with earnings
*Full year delivery remains on track
Malcolm Coster, Chairman of The MTL Instruments Group plc, commented: "We are
pleased to report good progress in the first half of 2007. Despite the
continuing weakness in the US dollar which gives unfavourable comparisons with
2006, the strength of our end user markets together with our recently broadened
product range should ensure further growth in the second half of the year."
- Ends -
For Further Information:
Graeme Philp 01582 407250
Chief Executive, The MTL Instruments Group plc
Terry Garrett / Stephanie Badjonat / Hannah Marwood 020 7067 0700
Weber Shandwick Financial
Please see the company website: www.mtl-group.com
Financial results
We are pleased to report that the Group continued to make good progress, both
financially and strategically, in the first half of 2007.
Revenue and profit before tax for the period increased by 6% and 14%
respectively despite the strong currency headwind particularly in relation to
the weakness of the US dollar. At constant currency sales increased by 12% and
profit before tax by 35%.
Operating profit increased to #4.4m (#5.2m at constant currency) compared with
#3.8m in the first half of 2006. First time contribution from RTK Instruments
Limited and Elpro Technologies PTY accounted for #0.4m of this improvement.
Operating review
The strong level of investment in our main industrial markets has continued
through the first half of 2007. This has enabled all of our businesses to make
progress. In addition to the organic growth that has been achieved we have made
three acquisitions, two of which have made a small contribution to the first
half results.
Project activity in our Hazardous Area business remained strong driven by
continued investment particularly in the Oil and Gas industry. Sales grew by 18
% to #24.7m, and by 22% at constant currency. The sales growth will be enhanced
in the second half of 2007 by the inclusion of our three new acquisitions.
The Surge business had a strong first half with order intake up 12% to #7.8m,
with growth at constant currency of 21%. This strong order growth enabled the
business to carry forward, into the second half, a record order backlog of
#2.6m. It is encouraging that much of this growth has come through the MTL sales
channel and is an early tangible benefit of our investment in sales channel
development.
The MOST business also had strong order intake of #10.3m up 2%, and up 12% at
constant currency. These reported numbers mask strong growth of the MATRIX/IO
business, where order intake grew by 35%, and 46% at constant currency.
Wonderware distribution order intake declined by 8%, due to the weakness of the
US dollar, with the business growing at constant currency by 2%.
Acquisitions
In May 2007, MTL announced the acquisition of Elpro Technologies PTY, which is a
well respected provider of wireless networking and telemetry equipment to the
automation industry. Wireless instrumentation is a rapidly growing branch of the
process control industry and many of our larger customers are looking to MTL to
provide this technology in the future.
RTK Instruments Limited has established a strong reputation as a provider of
alarm handling equipment in industries such as power generation where MTL
intends to strengthen its position. The acquisition of RTK announced in early
July 2007 is a natural fit with the Group, with MTL equally enhancing RTK's
access to key markets such as oil and gas and pharmaceutical.
Ocean Technical Systems Limited was acquired towards the end of July 2007 and is
a successful niche provider of tanker berthing equipment and sub-sea data
acquisition in the oil and gas transportation industry. Its products are highly
specialised and utilise hazardous area technology similar to MTL's core
competence.
The three acquisitions made in 2007 bring both operational and strategic
benefits to the Group. The Company looks forward to updating the market on
progress in due course.
Dividend
The interim dividend is to be increased by 10% to 3.2p, and will be payable on
12 October 2007 to all shareholders on the register as at 14 September 2007.
Outlook
Despite the continuing weakness in the US dollar which gives unfavourable
comparisons with 2006, the strength of our end user markets together with our
recently broadened product range should ensure further growth in the second half
of the year.
Malcolm Coster
Chairman
3 September 2007
Independent auditors' review report
Introduction
We have been instructed by the company to review the financial information for
the six months ended 30 June 2007 which comprises of the condensed consolidated
income statement, the condensed consolidated statement of recognised income and
expense, the condensed consolidated balance sheet, the condensed consolidated
cash flow statement and the related notes. We have read the other information
contained in the interim report and considered whether it contains any apparent
misstatements or material inconsistencies with the financial information.
This report is made solely to the company in accordance with the terms of our
engagement to assist the company in meeting the requirements of the Listing
Rules of the Financial Services Authority. Our review has been undertaken so
that we might state to the company those matters we are required to state to it
in this report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the company for
our review work, for this report, or for the conclusions we have reached.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where they
are to be changed in the next annual accounts in which case any changes, and the
reasons for them, are to be disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4:
Review of interim financial information issued by the Auditing Practices Board
for use in the United Kingdom. A review consists principally of making enquiries
of group management and applying analytical procedures to the financial
information and underlying financial data and, based thereon, assessing whether
the accounting policies and presentation have been consistently applied unless
otherwise disclosed. A review excludes audit procedures such as tests of
contents and verification of assets, liabilities and transactions. It is
substantially less in scope than an audit performed in accordance with
International Statements on Auditing (UK and Ireland) and therefore provides a
lower level of assurance than an audit. Accordingly, we do not express an audit
opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2007.
KPMG Audit Plc
Chartered Accountants
St Albans
3 September 2007
Condensed consolidated income statement -
for the period ended 30 June 2007
Unaudited
Six months ended
30 June 30 June
2007 2006
Note #000 #000
--------------------------------------------------------------------------------
Continuing operations
Revenue 11 43,913 41,384
Cost of sales (24,056) (22,354)
--------------------------------------------------------------------------------
Gross profit 19,857 19,030
Selling & marketing costs (9,837) (9,420)
Administrative expenses (3,333) (3,380)
Research, design and development costs (2,253) (2,445)
--------------------------------------------------------------------------------
Operating profit 11 4,434 3,785
Financial income 63 49
Finance costs (304) (177)
Financial income relating to pension liability 631 513
Finance costs relating to pension liability (686) (579)
--------------------------------------------------------------------------------
Profit before tax 4,138 3,591
Tax - UK 3 (150) (191)
Overseas tax (1,257) (980)
--------------------------------------------------------------------------------
Profit for the period attributable to
shareholders 2,731 2,420
--------------------------------------------------------------------------------
Earnings per share 4
From continuing operations
Basic 14.0p 12.6p
--------------------------------------------------------------------------------
Diluted 13.5p 12.4p
--------------------------------------------------------------------------------
Condensed consolidated statement of recognised income and expense -
for the period ended 30 June 2007
Unaudited
Six months ended
30 June 30 June
2007 2006
#000 #000
--------------------------------------------------------------------------------
Gains on cash flow hedges 39 141
Exchange differences on translation of foreign
operations 133 (155)
Actuarial gains on defined benefit pension schemes 3,728 502
Tax on items taken directly to equity (1,205) (151)
Transferred to profit and loss on cash flow hedges (7) (29)
--------------------------------------------------------------------------------
Net income recognised directly in equity 2,688 308
--------------------------------------------------------------------------------
Profit for the period 2,731 2,420
--------------------------------------------------------------------------------
Total recognised income and expense for the period
attributable to shareholders 5,419 2,728
--------------------------------------------------------------------------------
Condensed consolidated balance sheet -
at 30 June 2007
Unaudited Audited Unaudited
30 June 31 December 30 June
2007 2006 2006
#000 #000 #000
--------------------------------------------------------------------------------
Note
Non-current assets
Goodwill 6 31,329 18,394 18,486
Other intangible assets 1,725 564 407
Property, plant and equipment 9,165 7,651 7,812
Deferred tax assets 3,086 3,986 3,421
--------------------------------------------------------------------------------
45,305 30,595 30,126
--------------------------------------------------------------------------------
Current assets
Inventories 12,446 10,906 10,185
Trade and other receivables 24,097 22,017 21,024
Current tax receivable 1,231 987 -
Cash and cash equivalents 2,244 1,919 2,686
--------------------------------------------------------------------------------
40,018 35,829 33,895
--------------------------------------------------------------------------------
Total assets 85,323 66,424 64,021
--------------------------------------------------------------------------------
Current liabilities
Trade and other payables (14,598) (14,963) (11,740)
Current tax liabilities (1,788) (1,258) (1,457)
Provisions (1,679) (1,910) -
Bank overdrafts and loans 7 (963) - (3,514)
--------------------------------------------------------------------------------
(19,028) (18,131) (16,711)
--------------------------------------------------------------------------------
Net current assets 20,990 17,698 17,184
--------------------------------------------------------------------------------
Non-current liabilities
Other non-current payables (1,217) (1,217) (1,216)
Deferred tax liabilities (1,347) (1,086) (787)
Provisions (568) - (2,162)
Bank overdrafts and loans 7 (16,000) - -
Retirement benefit obligation (4,370) (8,005) (6,141)
--------------------------------------------------------------------------------
(23,502) (10,308) (10,306)
--------------------------------------------------------------------------------
Total liabilities (42,530) (28,439) (27,017)
--------------------------------------------------------------------------------
Net assets 42,793 37,985 37,004
--------------------------------------------------------------------------------
30 June 31 December 30 June
2007 2006 2006
#000 #000 #000
--------------------------------------------------------------------------------
Equity
Share capital 8 1,946 1,946 1,925
Share premium account 3,742 3,742 3,296
Reserves 9 (788) (953) (89)
Non-distributable reserve 9 332 188 170
Retained earnings 10 37,561 33,062 31,702
--------------------------------------------------------------------------------
Total equity attributable to
shareholders 42,793 37,985 37,004
--------------------------------------------------------------------------------
Condensed consolidated cash flow statement -
for the period ended 30 June 2007
Unaudited
Six months ended
30 June 30 June
2007 2006
Note #000 #000
--------------------------------------------------------------------------------
Cash flow from operating activities
Profit before taxation 4,138 3,591
Adjustments for:
Depreciation of property, plant and equipment 639 584
Amortisation of intangible assets 135 36
(Gain) on disposal of property, plant
and equipment (15) -
Financial income (63) (49)
Finance costs 304 177
Net finance costs relating to pension
liabilities 55 66
Equity settled share-based transactions 140 124
--------------------------------------------------------------------------------
5,333 4,529
(Increase) in trade and other receivables (734) (2,280)
Decrease/(Increase) in inventories 128 (242)
(Decrease)/increase in trade and other
payables, pension reserve and provisions (2,318) (1,392)
Fair value of currency exchange contracts (39) (141)
--------------------------------------------------------------------------------
Cash generated from operations 2,370 474
Interest paid (177) (177)
Income taxes paid (1,201) (1,875)
--------------------------------------------------------------------------------
Net cash from operating activities 992 (1,578)
--------------------------------------------------------------------------------
Interest received 63 49
Purchases of property, plant and equipment (1,077) (777)
Expenditure on product development (488) (210)
Acquisition of subsidiaries 6 (15,396) -
--------------------------------------------------------------------------------
Net cash used in investing activities (16,898) (938)
--------------------------------------------------------------------------------
Cash flows from financing activities
Dividends paid (895) (827)
Issue of share capital - 59
New loans 7 16,963 -
Repayments of borrowings - (280)
--------------------------------------------------------------------------------
Net cash used in financing activities 16,068 (1,048)
--------------------------------------------------------------------------------
Net increase/(decrease) in cash and cash
equivalents 162 (3,564)
Effect of foreign exchange rate changes 163 531
Cash and cash equivalents at 1 January 1,919 5,719
--------------------------------------------------------------------------------
Cash and cash equivalents at 30 June 2,244 2,686
--------------------------------------------------------------------------------
Notes to the condensed consolidated financial statements -
for the period ended 30 June 2007
1 Basis of preparation
These interim condensed consolidated financial statements of The MTL Instruments
Group plc are for the six months ended 30 June 2007 and comprises the Company
and its subsidiaries (together referred to as the 'Group'). The information
included within this document has been prepared on the basis of the recognition
and measurement requirements of IFRS and IFRIC interpretations in issue that are
endorsed by the European Commission and effective (or available for early
adoption) at 30 June 2007.
The results for each half year are unaudited. The comparative figures for the
year to 31 December2006 have been abridged from the Group's financial statements
for that year, which have been delivered to the Registrar of Companies. The
auditors have reported on those financial statements; their report was
unqualified, did not include a reference to any matters which the auditors drew
attention by way of emphasis without qualifying their report and did not contain
statements under section 237(2) or (3) of the Companies Act 1985.
2 Significant accounting policies
These financial statements should be read in conjunction with the Group's Annual
Report and Accounts 2006 and have been prepared using the accounting policies
set out in that report. These policies have been consistently applied to all the
periods presented.
3 Tax
Interim period income tax is accrued based on the estimated average annual
effective income tax rate of 34% (6 months ended 30 June 2006: 33%).
4 Earnings per share
From continuing and discontinued operations
The calculation of the basic and diluted earnings per share is based on the
following data:
Earnings
Six months ended
30 June 30 June
2007 2006
#000 #000
--------------------------------------------------------------------------------
Earnings for the purposes of basic earnings per
share being net profit attributable to equity
holders of the parent 2,731 2,420
--------------------------------------------------------------------------------
Earnings for the purposes of diluted earnings
per share 2,731 2,420
--------------------------------------------------------------------------------
Number of shares
30 June 30 June
2007 2006
Number Number
Weighted average number of ordinary shares for
the purposes of basic earnings per share 19,455,277 19,232,275
--------------------------------------------------------------------------------
Effect of dilutive potential ordinary shares:
Share options 721,376 348,481
--------------------------------------------------------------------------------
Weighted average number of ordinary shares for
the purposes of diluted earnings per share 20,176,653 19,580,756
--------------------------------------------------------------------------------
5 Dividends
During the interim period, a dividend of 4.6p (2006: 4.3p) per share was paid to
the shareholders.
Interim dividends are only recognised in the financial statements when paid. The
interim dividend will increase to 3.2p (2006: 2.9p) and will be payable on 12
October 2007 to all shareholders registered as at 14 September 2007.
6 Goodwill
Elpro International PTY Ltd
On 17 May 2007, the Group acquired 100% of the issued share capital of Elpro
International PTY Ltd for cash consideration of #12million. Elpro is a developer
and supplier of wireless solutions, for applications in the process control,
manufacturing and utility markets. This transaction has been accounted for by
the purchase method of accounting. From the date of acquisition to 30 June 2007
contribution (profit after tax) to the Group was #134,000.
RTK Instruments Ltd
On 31 May 2007, the Group acquired 90% of the issued share capital of RTK
Instruments Ltd for cash consideration of #3.7million. RTK are specialists in
the design and manufacture of process alarm equipment, displays and interface
products. This transaction has been accounted for by the purchase method of
accounting. A put and call option has been agreed for the Group to purchase the
10% minority interest. From the date of acquisition to 30 June 2007 contribution
(profit after tax) to the Group was #112,000.
7 Borrowings
A bank loan of #10,000,000 was taken out on 15 May 2007 and at the period end
#10,000,000 was outstanding. Quarterly repayments of #250,000 commence on 30
September 2007 and continue until 31 March 2012 with a final repayment of
#5,250,000 due on 30 June 2012. Interest is charged at a variable rate between
0.75% to 1.25% above LIBOR per annum. The interest rate varies according to an
agreed formula based on a comparison of net debt to EBITDA.
A revolving loan of #7,000,000 was taken out on 10 May 2007 and at the period
end #7,000,000 was outstanding. Interest is charged at a variable rate between
0.75% to 1.25% above LIBOR per annum. The interest rate varies according to an
agreed formula based on a comparison of net debt to EBITDA. The limit of the
revolving loan is #8,000,000 and runs for three years to 17 May 2010.
The bank loans are secured by debentures and company guarantees.
Analysis of debt:
2007 2006
Debt can be analysed as falling due: #000 #000
--------------------------------------------------------------------------------
In less than one year 1,000 -
Between one and two years 1,000 -
Between two and five years 15,000 -
--------------------------------------------------------------------------------
17,000 -
Less issue costs (37) -
--------------------------------------------------------------------------------
Net debt 16,963 -
--------------------------------------------------------------------------------
8 Share capital
The number of shares allotted, called up and fully paid as at 30 June 2007 was
19,455,277 (2006: 19,455,277). No shares were issued in the period.
9 Reserves
--------------------------------------------------------------------------------
Non-distributable Hedging Translation
Reserve Reserve Reserve Total
#000 #000 #000 #000
--------------------------------------------------------------------------------
Balance at 1 January 2006 119 (72) 26 73
Exchange differences on translation of
overseas operations - - (155) (155)
Unreceived gain on tax of
share options 51 - - 51
Increase in fair value of
hedging derivatives - 141 - 141
Transfer to income statement - (29) - (29)
--------------------------------------------------------------------------------
Balance at 30 June 2006 170 40 (129) 81
--------------------------------------------------------------------------------
Exchange differences on translation of
overseas operations - - (804) (804)
Unreceived gain on tax of
share options 18 - - 18
Increase in fair value of
hedging derivatives - 55 - 55
Transfer to income statement - (115) - (115)
--------------------------------------------------------------------------------
Balance at 1 January 2007 188 (20) (933) (765)
--------------------------------------------------------------------------------
Exchange differences on translation of
overseas operations - - 133 133
Unreceived gain on tax of
share options 144 - - 144
Increase in fair value of
hedging derivatives - 39 - 39
Transfer to income statement - (7) - (7)
--------------------------------------------------------------------------------
Balance at 30 June 2007 332 12 (800) (456)
--------------------------------------------------------------------------------
10 Retained earnings
#000
--------------------------------------------------------------------------------
Balance at 1 January 2006 29,634
Net profit for the period 2,420
Dividends paid (827)
Pension scheme net actuarial losses 351
Share options expensed 124
--------------------------------------------------------------------------------
Balance at 30 June 2006 31,702
--------------------------------------------------------------------------------
Net profit for the period 3,114
Dividends paid (558)
Pension scheme net actuarial losses (1,249)
Share options expensed 53
--------------------------------------------------------------------------------
Balance at 1 January 2007 33,062
--------------------------------------------------------------------------------
Net profit for the period 2,731
Dividends paid (895)
Pension scheme net actuarial gains 2,523
Share options expensed 140
--------------------------------------------------------------------------------
Balance at 30 June 2007 37,561
--------------------------------------------------------------------------------
11 Segment information
The following is an analysis of the revenue and results for the period analysed
by business segment, which is the Group's primary basis of segmentation.
The Group comprises the following business segments:
Hazardous Area - the design, manufacture and sale of IS interfaces, remote I/O,
displays and fieldbus components.
MOST (MTL Open System Technologies) - the design, manufacture and sale of open
control platforms and remote I/O products, and the resale of Wonderware HMI
visualisation software.
Surge - the design, manufacture and sale of surge protection equipment.
Visualisation - the design, manufacture and sale of visualisation PC terminals
and embedded PC's.
Gas - the design, manufacture and sale of gas analysis equipment.
Revenue from external customers Segment result
Six months ended Six months ended
30 June 30 June 30 June 30 June
2007 2006 2007 2006
#000 #000 #000 #000
--------------------------------------------------------------------------------
Hazardous Area 24,661 20,921 4,498 3,280
MOST 9,638 10,540 22 78
Surge 5,527 6,003 772 1,068
Visualisation 2,837 2,926 349 565
Gas 1,250 994 178 150
--------------------------------------------------------------------------------
43,913 41,384 5,819 5,141
Unallocated corporate
expenses (1,385) (1,356)
--------------------------------------------------------------------------------
Operating profit 4,434 3,785
--------------------------------------------------------------------------------
12 Post balance sheet events
On 9 July 2007, the Group acquired Ocean Technical systems Ltd ('OTS') for #3.0
million in cash. OTS is a UK-based specialist in SCADA (Supervisory control and
Data Acquisition) solutions for the oil and gas industries.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PBMRTMMTJBPR
Mtl Instruments (LSE:MTI)
Graphique Historique de l'Action
De Jan 2025 à Fév 2025
Mtl Instruments (LSE:MTI)
Graphique Historique de l'Action
De Fév 2024 à Fév 2025
