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27 June 2007 - Interim Results

INTERIM ANNOUNCEMENT OF UNAUDITED RESULTS
FOR THE SIX MONTHS ENDED 31 MARCH 2007

LPA Group Plc, the electrical and electronic equipment manufacturer and distributor, announces a return to profit in the six months ended 31 March 2007.

 

KEY POINTS

  • Turnover up 29% to £8.6m (2006: £6.7m)
  • Profit before tax £156,000 (2006: loss of £149,000)
  • Basic earnings per share of 1.05p (2006: loss 1.19p)
  • Increase in interim dividend to 0.20p (2006: 0.15p)
  • Positive cash flow despite rapid growth - reduction in gearing to 37.8% (2006: 39.2%)
  • Order intake up 11%
  • Major prospects for LED lighting
  • Strong trading continuing in second half

Peter Pollock, Chief Executive, commented

 

We have enjoyed a much improved performance, which has nothing to do with the intervention of third parties and everything to do with the hard work the team have put in, rebuilding the Group from the grave situation that existed in 2003. The second half is looking good too. There are challenges in the longer term to be addressed, but we have the strategy to deal with them. The Group is in robust shape and we are looking forward to the future with improved confidence.

 

27 June 2007

 

LPA Group plc
Peter Pollock, Chief Executive


Tel:  01799 512844

College Hill
Gareth David

 

 

Tel: 020 7457 2020

Teather & Greenwood Limited
Thilo Hoffmann
James Glancy

 

Tel: 020 7426 9000

 

Interim Unaudited Group Results for the Six Months ended 31 March 2007

 

CHAIRMAN'S STATEMENT

 

In my remarks to the Annual General Meeting held in February, I commented that the start to the new financial year had been strong. I am pleased to report that this has continued into the second half and that the year as a whole should be satisfactory.

 

Some of this present strength is due to customers bringing forward projects from the first half of next financial year. While this has had a welcome effect on this year, the next financial year will be a challenge until already secured rail projects come online in the fourth quarter. This presents opportunities to adjust our UK capacity to better reflect the base load going forward, with additional activity being satisfied from offshore.

 

Sales output increased 29% to £8.6m (2006: £6.7m), and order intake increased by 11% to £7.2m but this continues to exclude the full value of projects for which we have been selected but orders not placed. Profit before tax in the first half amounted to £156,000 an increase of £305,000 over the loss of £149,000 in the corresponding period last year.

 

I should mention that this improvement reflects the work of all our staff in facing and overcoming the severe challenges of the last five years, and was achieved despite including costs of £52,000 spent in protecting shareholders from tendering their shares to Andrew Perloff at an unacceptably low price, and in ensuring that the Annual General Meeting was, as usual, conducted in the interests of all shareholders.

 

All business units have contributed to the improvement in profitability, but the progress at Haswell Engineers is particularly pleasing since the operation has overcome significant difficulties to achieve a much stronger market position and become a solid performer.

 

The net cash inflow before financing remained positive at £22,000 (2006: £86,000) despite the investment in working capital to support the sharply increased level of activity. Cash flow has been stronger at the beginning of the second half, reflecting the sustained profitability and more modest growth.

 

The rail vehicle equipment market remains challenging worldwide. Concentration on builders supplying the UK market has resulted in contracts from UK, Germany, Sweden, France and Japan. A greater footprint in markets in Asia and Australasia has also been achieved. Immediate opportunities include extra coaches for West Coast Mainline which, if the order is placed, would have a significant impact on the final quarter of next financial year and subsequent periods.

 

Our LED lighting technology for rail vehicles is increasingly recognised as world class with initial opportunities in Europe, which have the potential to result in major contracts. This technology has potential beyond rail vehicles in the areas of infrastructure, aerospace and defence. 

 

Given the strong trading in the current year the directors intend to pay an increased interim dividend of 0.20p (2006: 0.15p) on 28 September 2007 to shareholders registered at the close of business on 7 September 2007.

 

Your Board expects strong progress during the remainder of this year, which will however be tempered by the preparation needed to meet the challenges of next financial year, when the load will not be so strong, and appropriately structure the Group for the improved load already on hand for subsequent periods. 

 

The Group will develop low cost country sourcing and manufacture as a major priority, while maintaining its centres of sales and engineering excellence in the UK.

 

Michael Rusch

Chairman

 

27 June 2007

LPA GROUP PLC

 

Interim Unaudited Group Results for the Six Months ended 31 March 2007

 

CONSOLIDATED PROFIT AND LOSS ACCOUNT

 

 

6 months to

31 March 2007

Unaudited

£000's

6 months to

31 March 2006

Unaudited

£000's

Year to

30 Sept 2006

Audited

£000's

 

 

 

 

Turnover

8,602

6,668

13,737

 

 

 

 

 

 

 

 

Operating profit / (loss)

128

(181)

(205)

 

 

 

 

Net finance income (see note 3)

28

32

62

 

 

 

 

Profit / (loss) on ordinary activities before taxation

156

(149)

(143)

 

 

 

 

Tax on profit / (loss) on ordinary activities

(41)

19

6

 

 

 

 

Profit / (loss) on ordinary activities after taxation

115

(130)

(137)

 

 

 

 

Earnings per share (see note 2)

 

 

 

 - Basic earnings / (loss) per share

1.05p

(1.19p)

(1.26p)

 - Diluted earnings / (loss) per share

1.04p

(1.19p)

(1.26p)

 

 

 

 

STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES

 

6 months to

31 March 2007

Unaudited

£000's

6 months to

31 March 2006

Unaudited

£000's

Year to

30 Sept 2006

Audited

£000's

 

 

 

 

Profit / (loss) on ordinary activities after taxation

115

(130)

(137)

 

 

 

 

Actuarial gain recognised in the pension scheme

79

546

144

Deferred tax attributable to actuarial gain

(24)

(171)

(43)

 

 

 

 

Total recognised gains / (losses)

170

245

(36)

 

 

 

 

LPA GROUP PLC

 

Interim Unaudited Group Results for the Six Months ended 31 March 2007

          CONSOLIDATED BALANCE SHEET

 

 

As at

31 March 2007

Unaudited

£000's

As at

31 March 2006

Unaudited

£000's

As at

30 Sept 2006

Audited

£000's

                Fixed assets

 

 

 

                Intangible assets

1,187

1,281

1,234

                Tangible assets

1,984

2,183

2,100

 

3,171

3,464

3,334

 

 

 

 

                Current assets

 

 

 

                 Stocks

2,569

2,383

2,632

Debtors

3,531

2,996

3,114

                Cash at bank and in hand

3

3

4

 

6,103

5,382

5,750

 

 

 

 

Creditors: Amounts falling due with           in one year

(3,801)

(3,708)

(4,143)

                

 

 

 

                Net current assets

2,302

1,674

1,607

 

 

 

 

                Total assets less          current liabilities

5,473

5,138

4,941

 

 

 

 

Creditors: Amounts falling due           after more than one           year

(1,423)

(1,083)

(956)

 

 

 

 

                Provisions for liabilities and charges

(26)

(31)

(5)

 

 

 

 

                Net assets excluding pension asset

4,024

4,024

3.980

 

 

 

 

                Pension asset

1,839

1,996

1,743

 

 

 

 

                Net assets

5,863

6,020

5,723

 

 

 

 

 

 

 

 

                Capital and reserves

 

 

 

                Called up share capital

1,096

1,090

1,090

                Share premium account

256

254

254

                Revaluation reserve

312

313

313

                Merger reserve

230

230

230

                Profit and loss account

3,969

4,133

3,836

 

 

 

 

               Equity shareholder's

               fund

5,863

6,020

5,723

 

LPA GROUP PLC

 

Interim Unaudited Group Results for the Six Months ended 31 March 2007

 

         CONSOLIDATED CASH FLOW STATEMENT

 

6 months to

31 March 2007

Unaudited

£000's

6 months to

31 March 2006

Unaudited

£000's

Year to

30 Sept 2006

Audited

£000's

 

 

 

 

Net cash inflow from operating activities

186

301

648

Returns on investments and servicing of finance

(92)

(86)

(171)

Taxation

-

-

(8)

Capital expenditure

(34)

(90)

(137)

Equity dividends paid

(38)

(39)

(55)

 

 

 

 

Net cash inflow before financing

22

86

277

 

 

 

 

Financing

442

(214)

(385)

 

 

 

 

Increase / (decrease) in cash

464

(128)

(108)

RECONCILIATION OF OPERATING PROFIT / (LOSS) TO

 NET CASH INFLOW FROM OPERATING ACTIVITIES

Operating profit / (loss)

128

(181)

(205)

Depreciation and amortisation

215

228

455

Changes in working capital and other non cash items

(224)

197

275

Adjustment for pension funding

67

57

123

 

 

 

 

Net cash inflow from operating activities

186

301

648

RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT

Increase / (decrease) in cash in the period

464

(128)

(108)

Cash (inflow) / outflow from debt and lease financing

(434)

214

385

Change in debt resulting from cash flows

30

86

277

 

 

 

 

New hire purchase agreements

(18)

(38)

(84)

Amortisation of loan costs

(5)

(5)

(10)

 

 

 

 

Movement in net debt in the period

7

43

183

 

 

 

 

Opening net debt

(2,221)

(2,404)

(2,404)

 

 

 

 

Closing net debt

(2,214)

(2,361)

(2,221)

 

LPA GROUP PLC

 

NOTES

 

1 - ACCOUNTING POLICIES

 

The interim financial information has been prepared on the basis of the accounting policies set out in the Group's statutory accounts for the year ended 30 September 2006, except that FRS20 "Share Based Payments" will be adopted for the first time in the accounts to the year ended 30 September 2007.

 

receive share options, is determined by reference to the fair value at the date of grant. The cost is recognised in the profit and loss account over the vesting period. Comparative figures have not been restated as there is not a material impact on either net assets at September 2006 and March 2006 or earnings in the year to September 2006 and the half year to 31 March 2006 arising from the adoption of FRS20.

 

2 - EARNINGS PER SHARE

 

The calculation of basic earnings per share is based upon the profit after tax of £115,000 (2006: loss of £130,000) and the weighted average number of ordinary shares in issue during the period of 10.945m (2006: 10.903m).

 

The weighted average number of ordinary shares diluted for the effect of outstanding share options was 11.046m.

 

Due to losses in the prior year no dilution arises and diluted earnings per share is therefore shown as the same as basic earnings per share. Adjusted earnings per share, which is disclosed to reflect the underlying performance of the Company, has been calculated on a profit of £162,000 (2006: loss of £84,000) being the profit after tax for the year before the amortisation of goodwill.

 

Details are as follows:

 

 

6 months to

31 March 2007

Unaudited

6 months to

31 March 2006

Unaudited

Year to

30 September 2006

Audited

 

 

 

 

£'000

Basic pence per share

Diluted pence per share

 

 

 

£'000

Basic pence per share

 

 

 

£'000

Basic pence

 per

 share

 

 

 

 

 

 

 

 

Basic earnings

115

1.05

1.04

(130)

(1.19)

(137)

(1.26)

Goodwill amortisation

47

0.43

0.43

46

0.42

93

0.86

 

 

 

 

 

 

 

 

Adjusted earnings

162

1.48

1.47

(84)

(0.77)

(44)

(0.40)

               

 

3 - NET FINANCE INCOME

 

 

6 months to

31 March 2007

Unaudited

£000's

6 months to

31 March 2006

Unaudited

£000's

Year to

30 Sept 2006

Audited

£000's

 

 

 

 

Interest payable

(97)

(91)

(181)

Net return on pension scheme

125

123

243

 

 

 

 

Net finance income

28

32

62

 

 

 

 

LPA

 

 

4 - INFORMATION

 

The financial information contained in this interim statement does not constitute statutory accounts as defined in section 240 of the Companies Act 1985.

 

The financial information for the full preceding year is based on the statutory accounts for the financial year ended 30 September 2006. Those accounts, upon which the auditors issued an unqualified opinion, have been delivered to the Registrar of Companies.


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