REG - LPA Group PLC - Half-year Report <Origin Href="QuoteRef">LPA.L</Origin>

LPAAnnouncement

26/06/2017 07:05

RNS Number : 0668J
LPA Group PLC
26 June 2017
LPA GROUP PLC
Half-Yearly Report for the six months to 31 March 2017
LPA Group PLC ("LPA" or "the Group"), the LED lighting and electro-mechanical system manufacturer and distributor, announces a strong performance for the six months to 31 March 2017.
KEY POINTS
 Revenue increased 3.1% to 10.81m (2016: 10.48m)
 Operating profit before exceptional items 772,000 (2016: 782,000)
 Net exceptional gain 226,000 (2016: 14,000)
 Profit before tax increased to 976,000 (2016: 782,000)
 Diluted earnings per share substantially increased to 6.81p (2016: 5.34p)
 Interim dividend increased 5.0% to 1.05p (2016: 1.00p)
 Order entry increased 7.7% to 14.85m (2016: 13.78m)
 Order book stands at 22m (2016: 22m)
 Lighting operation successfully relocated in the period
Michael Rusch, Chairman, comments: 
"In my comments at the Annual General Meeting, I reported that the Group had established itself on a new trading level and that this was being sustained with excellent levels of orders and sales. I am delighted to report that this remains the case.
"Our new manufacturing facilities give us the capacity and improved productivity to continue to grow and prosper. 
"Our current order book underpins expected progress in the remainder of this financial year and in the medium term.
"As a measure of our continued confidence, the interim dividend has been increased by 5.0% to 1.05p."
26 June 2017
ENQUIRIES:
LPA Group plc 
Peter Pollock, Chief Executive   Tel: 07881 626123 or 01799 512844
Steve Brett, Finance Director    Tel: 07881 626127 or 01799 512860
Cairn Financial (Nominated Adviser)  Tel: 020 7213 0880 
James Caithie / Tony Rawlinson
WH Ireland (Broker) Tel: 0113 394 6600 
Tim Feather / Ed Allsopp
Instinctif Partners (PR Adviser)    Tel: 020 7457 2020
Mark Garraway / Helen Tarbet 
CHAIRMAN'S STATEMENT
In my comments to the Annual General Meeting on 14 March 2017, I reported that the Group had established itself on a new trading level and that this was being sustained with excellent levels of orders and sales. I am delighted to report that this remains the case.
Order entry increased 7.7% to a new record of 14.85m (2016: 13.78m) and sales increased 3.1% to 10.81m, also a record (2016: 10.48m). Despite the previously reported lower margin due to a change of product mix (higher proportion of project work, reduced aerospace & defence activity), operating profit before exceptional items exceeded our internal forecasts at 772,000 (2016: 782,000). The period includes a net exceptional gain of 226,000 comprising a property disposal gain on the sale of our former lighting factory in Yorkshire of 341,000 (2016: 14,000) less 115,000 of relocation and other nonrecurring costs. Profit before tax amounted to 976,000 (2016: 782,000) and diluted earnings per share were 6.81p (2016: 5.34p).
Electro-mechanical, and, in particular, Transport+, performed well during the period. Lighting suffered the failure of a large oil and gas customer and relocated its factory during the first half, but still performed well. Engineered component distribution faced reduced demand from the aerospace and defence sector and some delayed projects in the rail sector, but delivered a satisfactory result.
The order book at the end of the period was unchanged at 22m (2016: 22m). There are a number of project orders in the pipe-line for which we have been selected but which remain un-entered because we have not yet received confirmed delivery schedules: these amount to approximately 4.6m (2016: 4.4m). Interest in our LED lighting, ethernet backbone, USB outlet charging technology and Transport+ remains strong: our efforts in export markets will continue.
With the relocation of our lighting activity in March, the Group has completed the reorganisation of its two manufacturing operations (that for electro-mechanical was completed in 2015). Substantial investments in new buildings and plant have been made, in large part funded from the sale of former properties, which provide the Group with expanded capacity, improved productivity and excellent facilities for the future.
The loss of a working majority for the Government, coupled with the Brexit negotiations may prolong a period of uncertainty. However we trust that the Government will continue with its investment in the rail sector and that the Group will continue to enjoy success in exports to Europe, the Middle East and Asia.
Following the significant investment in facilities and a working capital build to fund growth over the year, gearing amounted to 31.6% as compared to 29.2% at the start of the financial year. Cash flow is expected to be increasingly positive through the second half and beyond. 
We are continuing to follow a progressive dividend policy: the interim dividend will be increased by 5.0% to 1.05p (2016: 1.00p) which will be paid on 22 September 2017 to those shareholders registered at the close of business on 1 September 2017.
We expect good progress in orders and sales through the remainder of this year and the current order book underpins the situation for the medium term. The future looks encouraging.
MICHAEL RUSCH
Chairman
26 June 2017
LPA GROUP PLC
Interim Unaudited Group Results for the Six Months ended 31 March 2017
CONSOLIDATED INCOME STATEMENT
6 months to
31 March 2017
Unaudited
000's
Period to
1 April 2016
Unaudited
000's
Year to 
30 Sept 2016
Audited
000's
Revenue
10,807
10,483
21,422
Operating profit before exceptional items
772
782
1,533
Gain on sale of property
341
14
14
Relocation and other nonrecurring costs 
(115)
-
-
Operating profit
998
796
1,547
Finance costs
(32)
(40)
(85)
Finance income
10
26
54
Profit before tax 
976
782
1,516
Taxation
(78)
(100)
(54)
Profit for the period
898
682
1,462
Attributable to: 
- Equity holders of the parent
898
682
1,462
Earnings per share (see note 2)
- Basic
7.37p
5.75p
12.30p
- Diluted
6.81p
5.34p
11.35p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 months to
31 March 2017
Unaudited
000's
Period to
1 April 2016
Unaudited
000's
Year to 
30 Sept 2016
Audited
000's
Profit for the period
898
682
1,462
Other comprehensive income / (expense)
Items that will not be reclassified to profit or loss
Actuarial gain / (loss) on pension scheme
294
64
(692)
Tax on actuarial gain / (loss)
(57)
(23)
119
Other comprehensive income / (expense) net of tax
237
41
(573)
Total comprehensive income for the period
1,135
723
889
Attributable to: 
- Equity holders of the parent
1,135
723
889
LPA GROUP PLC
Interim Unaudited Group Results for the Six Months ended 31 March 2017
CONSOLIDATED BALANCE SHEET
As at 
31 March 2017
Unaudited
000's
As at 
1 April 2016
Unaudited
000's
As at 
30 Sept 2016
Audited
000's
Non-current assets
Intangible assets
1,190
1,204
1,194
Property, plant and equipment
6,686
4,722
5,624
Retirement benefits
1,195
1,519
841
9,071
7,445
7,659
Current assets
Inventories
3,593
2,866
3,030
Trade and other receivables
4,721
4,502
4,678
Cash and cash equivalents
138
4
149
8,452
7,372
7,857
Total assets
17,523
14,817
15,516
Current liabilities
Bank overdraft
(640)
(384)
(138)
Bank loans and other borrowings
(265)
(246)
(247)
Current tax payable
(199)
(134)
(122)
Trade and other payables
(4,061)
(3,582)
(3,803)
(5,165)
(4,346)
(4,310)
Non-current liabilities
Bank loans and other borrowings
(2,327)
(1,471)
(2,305)
Deferred tax liabilities
(251)
(369)
(193)
Other payables
-
(20)
(19)
(2,578)
(1,860)
(2,517)
Total liabilities
(7,743)
(6,206)
(6,827)
Net assets
9,780
8,611
8,689
Equity
Share capital
1,231
1,189
1,196
Share premium account
610
480
504
Un-issued shares reserve
183
191
183
Merger reserve
230
230
230
Retained earnings
7,526
6,521
6,576
Equity attributable to shareholders of the parent
9,780
8,611
8,689
LPA GROUP PLC
Interim Unaudited Group Results for the Six Months ended 31 March 2017
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
6 months to
31 March 2017
Unaudited
000's
Period to
1 April 2016
Unaudited
000's
Year to 
30 Sept 2016
Audited
000's
Opening equity
8,689
7,987
7,987
Total comprehensive income
1,135
723
889
Transactions with owners: 
Dividends
(185)
(119)
(238)
Proceeds from issue of shares
141
20
51
Closing equity
9,780
8,611
8,689
LPA GROUP PLC
Interim Unaudited Group Results for the Six Months ended 31 March 2017
CONSOLIDATED CASH FLOW STATEMENT
6 months to
31 March 2017
Unaudited
000's
Period to
1 April 2016
Unaudited
000's
Year to 
30 Sept 2016
Audited
000's
Profit before tax
976
782
1,516
Finance costs
32
40
85
Finance income
(10)
(26)
(54)
Operating profit
998
796
1,547
Adjustments for:
Depreciation
230
224
442
Amortisation of intangible assets
17
19
39
Gain on sale of property, plant and equipment
(341)
(14)
(14)
Loan arrangement fees
4
-
19
908
1,025
2,033
Movements in working capital:
Change in inventories
(563)
(208)
(372)
Change in trade and other receivables
(43)
(1,036)
(1,212)
Change in trade and other payables
259
617
873
Cash generated from operations
561
398
1,322
Retirement benefits
(50)
(50)
(100)
Net cash from operating activities
511
348
1,222
Purchase of property, plant and equipment
(1,354)
(174)
(1,294)
Proceeds from sale of property, plant and equipment
524
637
601
Capitalised development expenditure
(13)
(1)
(11)
Net cash (used in) / from investing activities
(843)
462
(704)
Drawdown of bank loans
500
-
2,475
Repayment of bank loans
(603)
(100)
(1,750)
Repayment of obligations under finance leases
(27)
(18)
(40)
Interest paid
(7)
(40)
(72)
Proceeds from issue of share capital
141
20
51
Dividends paid
(185)
(119)
(238)
Net cash (used in) / from financing activities
(181)
(257)
426
Net (decrease) / increase in cash and cash equivalents
(513)
553
944
Cash and cash equivalents at start of the period
11
(933)
(933)
Cash and cash equivalents at end of the period
(502)
(380)
11
Reconciliation of cash and cash equivalents
6 months to
31 March 2017
Unaudited
000's
Period to
1 April 2016
Unaudited
000's
Year to 
30 Sept 2016
Audited
000's
Cash and cash equivalents in current assets
138
4
149
Bank overdraft in current liabilities
(640)
(384)
(138)
Cash and cash equivalents at end of the period
(502)
(380)
11
NOTES
1 - BASIS OF PREPARATION
These interim consolidated financial statements are for the six months ended 31 March 2017. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 30 September 2016. 
They have been prepared in accordance with International Financial Reporting Standards as adopted by the EU and applicable law (IFRS) and in accordance with the provisions of the Companies Act 2006 applicable to companies applying IFRS. These financial statements have been prepared under the historical cost convention with the exception of certain items which are measured at fair value. 
These consolidated interim financial statements have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year to 30 September 2016. The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these interim financial statements and are expected to be followed throughout the year ended 30 September 2017. 
2 - EARNINGS PER SHARE
The calculations of earnings per share are based upon the profit after tax attributable to ordinary equity shareholders and the weighted average number of ordinary shares in issue during the period. Details are as follows:
Six months to
31 March 2017
Unaudited
Period to
1 April 2016
Unaudited 
Year to 
30 Sept 2016
Audited
Profit for the period - 000's
898
682
1,462
Weighted average number of ordinary shares in issue during the period
12.186m
11.856m
11.884m
Dilutive effect of share options
0.995m
0.924m
1.003m
Number of shares for diluted earnings per share
13.181m
12.780m
12.887m
Basic earnings per share
7.37p
5.75p
12.30p
Diluted earnings per share
6.81p
5.34p
11.35p
3 - ANALYSIS OF NET DEBT
Bank loans
000's
Finance lease obligations
000's
Cash and cash equivalents
000's
Net debt
000's
At 1 October 2016
2,457
95
(11)
2,541
New finance lease obligations
-
141
-
141
Draw down of bank loans
500
-
(500)
-
Interest and arrangement fees
29
-
-
29
Repayment of borrowings
(603)
(27)
630
-
Cash absorbed
-
-
383
383
At 31 March 2017
2,383
209
502
3,094
4 - INFORMATION
LPA Group plc is the Group's ultimate parent company. It is incorporated in England and Wales and domiciled in Great Britain. The address of LPA Group plc's registered office, which is also its principal place of business, is Light & Power House, Shire Hill, Saffron Walden, Essex, CB11 3AQ. LPA Group plc's shares are quoted on the AIM market of the London Stock Exchange. 
LPA Group plc's consolidated interim financial statements are presented in Pounds Sterling ('000), which is also the functional currency of the parent company. These consolidated interim financial statements have been approved for issue by the Board of Directors on 26 June 2017. The financial information for the year ended 30 September 2016 set out in this interim report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The Group's statutory financial statements for the year ended 30 September 2016 have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain statements under Section 498(2) or Section 498(3) of the Companies Act 2006. 
Summarised copies of this Interim Report are being sent to shareholders. Copies are also available from the Company's registered office at the above address and will be made available on the Company's website (www.lpa-group.com). 

This information is provided by RNS
The company news service from the London Stock Exchange
  END
IR EASKDADDXEFF