Interim results
| INTERIM ANNOUNCEMENT OF UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2007 |
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| 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
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
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
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
LPA GROUP PLC
Interim Unaudited Group Results for the Six Months ended 31 March 2007 CONSOLIDATED BALANCE SHEET
LPA GROUP PLC
Interim Unaudited Group Results for the Six Months ended 31 March 2007
CONSOLIDATED CASH FLOW STATEMENT
RECONCILIATION OF OPERATING PROFIT / (LOSS) TO NET CASH INFLOW FROM OPERATING ACTIVITIES
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
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:
3 – NET FINANCE INCOME
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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