REG - LPA Group PLC - Half-year Report
22/06/2018 15:05
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RNS Number : 2936S
LPA Group PLC
22 June 2018
LPA GROUP PLC
Replacement - Half-Yearly Report for the six months ended 31 March 2018
The following amendment has been made to the 'Half-Yearly Report for the six
months ended 31 March 2018' announcement released on 21 June 2018 at 7.00am
under RNS No 0569S.
The dividend record date has been corrected to 7 September 2018 and the
payment date has been corrected to 28 September 2018.
All other details remain unchanged.
The full amended text is shown below.
LPA GROUP PLC
Half-Yearly Report for the six months ended 31 March 2018
LPA Group PLC ("LPA" or the "Group"), the high reliability LED lighting and
electro-mechanical system manufacturer and distributor, announces a strong
performance for the six months to 31 March 2018, £1.8m of LED Lighting and
power socket contracts from a new customer and board reorganisation.
KEY POINTS
· Revenue increased 28.9% to £13.93m (2017: £10.81m)
· Operating profit before exceptional items increased 45.4% to
£1.122m (2017: £0.77m).
· Exceptional costs £111,000 (2017: £115,000 costs less £341,000
of property gain; net £226,000 gain)
· Profit before tax increased 1.1% to £987,000 (2016: £976,000)
· Diluted earnings per share decreased 0.30p to 6.51p (2017: 6.81p)
due to increased profits chargeable to tax
· Interim dividend increased 0.05p to 1.10p (2017: 1.05p)
· Order entry decreased 43.4% to £8.40m (2017: £14.85m)
· Order book stands at £16m (2017: £22m)
· Gearing remains unchanged at 31.2% (2017: 31.6%) despite significant
increases in working capital and plant and equipment
Michael Rusch, Chairman, comments:
"In my comments at the Annual General Meeting, I reported that output was at
record levels and that this had been sustained during the first half. I am
pleased to report that operating profits have also been at record levels and
that this performance is continuing during the third quarter and should result
in an outstanding result for the year. All parts of the Group are performing
well.
However, as previously reported, the medium term maybe more challenging. Order
entry in Electro-Mechanical and to a lesser extent in LED Lighting has not
kept pace with sales and the Group order book has declined. Successive changes
in Government procurement policy have impacted domestic supply chains for both
new and refurbished trains and there is increased competition in our Asian
markets. Nevertheless, we are rising to this challenge and have been selected
for £1.8m of new LED Lighting and power socket export contracts for trains
being imported to the UK, for delivery commencing in the next financial year.
Following the appointment of Chris Buckenham as Chief Financial Officer and
Company Secretary in March 2018, we are continuing our board reorganisation.
Paul Curtis, Managing Director of LPA Channel Electric Equipment Limited ("LPA
Channel"), our highly successful distribution business is appointed Chief
Operating Officer with effect from 1(st) October 2018, subject to standard due
diligence. Paul was apprenticed at LPA Channel, achieved an MBA and had a
successful spell as Sales and Marketing Director of LPA Connection Systems
before returning to LPA Channel as Managing Director. At the same time, Peter
Pollock, our Chief Executive will become Chairman in succession to me, while I
become Group President, remaining a major shareholder and non-executive
director. Len Porter remains Senior Non-Executive Director. Once these board
appointments have bedded in, we expect to promote Paul to Chief Executive
Officer and to appoint a further non-executive director. We shall be adopting
the QCA Corporate Governance Code and a road map to compliance.
We have committed a further £1m to capital expenditure as a measure of our
confidence in the future and we are increasing the interim dividend by 0.05p
to 1.10p."
MICHAEL RUSCH - Chairman - 21 June 2018
ENQUIRIES: Tel:
LPA Group plc
Peter Pollock, Chief Executive 01799 512844
Chris Buckenham, Chief Financial Officer 01799 512859
Cairn Financial (Nominated Adviser) 020 7213 0880
James Caithie / Tony Rawlinson
WH Ireland (Broker) 0113 394 6600
Tim Feather / James Sinclair-Ford
Instinctif Partners (PR Advisors) 020 7457 2020
Mark Garraway / Helen Tarbet
CHAIRMAN'S STATEMENT
In my comments to the Annual General Meeting, I reported that output was at
record levels and that this had been sustained during the first half. I am
pleased to report that operating profits have also been at record levels and
that this performance is continuing during the third quarter and should result
in an outstanding result for the year.
During the first half, Sales increased 29% to a record £13.9m (2017: £10.8m)
reflecting the exceptionally strong order book at the start of the year and
Operating Profit increased 45% to £1.1m, also a new record, (2017: £0.8m).
Exceptional costs amounted to £0.1m (2017: Exceptional gain £0.2m). Profit
before tax amounted to £0.99m (2017 £0.98m) and diluted earnings per share
were 6.51p (2018: 6.81p). The dividend is increased by 0.05p to 1.10p. All
parts of the Group are performing well.
However, as previously indicated, the medium term maybe more challenging.
Order entry in Electro-Mechanical, and to a lesser extent in LED Lighting, has
not kept pace with sales and while Distribution is doing well, the Group order
book has declined. Government procurement policy has changed impacting
domestic supply chains for both new and refurbished trains. The "long term
through life" cost approach used on Cross Rail and London Overground, which
favoured our reliable, long lived sustainable products has changed to one
requiring only support for the franchise period, typically seven years. In
addition, the procurement of 7000 new trains, significantly more than the
running annual average of around 700 trains, has exceeded domestic capacity to
supply, necessitating import from overseas train builders who are not yet
existing customers, presenting us with the challenge of displacing existing
suppliers to achieve orders.
The flood of new trains has meant the early retirement of some existing trains
which would otherwise have required refurbishment and upgrade and provided us
with more routine orders. This has particularly impacted Transport+. Some of
our export markets, particularly Japan have suffered from increased
competition from China and Korea in their export markets and this has
presented us with additional challenges.
However, this scenario had been identified for some time and the Group has
acted to mitigate it. We have pursued other export opportunities created by
imported trains and have won £1.8m of orders for LED Lighting and power
sockets from a new entrant to the UK market for delivery in the next financial
year. We have identified other similar opportunities which we are pursuing. We
have invested in new products development and in opening new markets.
We are investing £1m in processes and automation to reduce manufacturing
costs.
We are continuing to follow a progressive dividend policy: the interim
dividend will be increased by 0.05p to 1.10p (2017: 1.05p) which will be paid
on 28 September 2018 to those shareholders registered at the close of business
on 7 September 2018.
Following the appointment of Chris Buckenham as Chief Financial Officer and
Company Secretary in March 2018, we are continuing our board reorganisation.
Paul Curtis, Managing Director of LPA Channel Electric Equipment Limited, our
highly successful distribution business is appointed Chief Operating Officer
with effect from 1st October 2018. Paul was apprenticed at LPA Channel
achieved an MBA and had a successful spell as Sales and Marketing Director of
LPA Connection Systems before returning to LPA Channel as Managing Director.
At the same time, Peter Pollock, our Chief Executive will become Chairman in
succession to me, while I become Group President, remaining a major
shareholder and Non-Executive Director. Len Porter remains Senior
Non-Executive Director. Once these board appointments have bedded in, we
expect to promote Paul to Chief Executive Officer and to appoint a further
non-executive director.
We shall be adopting the QCA Corporate Governance Code and a road map to full
compliance.
As previously reported the levels of sales and profits in the current year are
exceptional and may be under pressure next year, but the funnel of
opportunities, which leads to the pipeline of orders and order entry, is very
encouraging. The Group is in robust shape and we look forward to the future
with great confidence.
MICHAEL RUSCH
Chairman - 21 June 2018
CONSOLIDATED INCOME STATEMENT
6 months to 6 months to Year to
31 March 2018
31 March 2017
30 Sept 2017
Unaudited Unaudited Audited
£000 £000 £000
Revenue 13,929 10,807 22,482
Operating profit before exceptional items 1,122 772 1,895
Gain on sale of property - 341 341
Relocation and other nonrecurring costs (111) (115) (268)
Operating profit 1,012 998 1,968
Finance costs (43) (32) (75)
Finance income 18 10 21
Profit before tax 987 976 1,914
Taxation (127) (78) (146)
Profit for the period 860 898 1,768
Attributable to:
- Equity holders of the parent 860 898 1,768
Earnings per share (see note 2)
- Basic 6.95p 7.37p 14.40p
- Diluted 6.51p 6.81p 13.42p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 months to 6 months Year to
31 March 2018
to 31 March 2017
30 Sept 2017
Unaudited Unaudited Audited
£000 £000 £000
Profit for the period 860 898 1,768
Other comprehensive income / (expense)
Items that will not be reclassified to profit or loss - - -
Actuarial gain / (loss) on pension scheme (396) 294 349
Tax on actuarial gain / (loss) 65 (57) (77)
Other comprehensive income / (expense) net of tax (331) 237 272
Total comprehensive income for the period 529 1,135 2,040
Attributable to:
- Equity holders of the parent 529 1,135 2,040
CONSOLIDATED BALANCE SHEET
As at As at As at
31 March 18 31 March 17 30 Sept 17
Unaudited Unaudited Audited
£000 £000 £000
Non-current assets
Intangible assets 1,187 1,190 1,185
Property, plant and equipment 6,843 6,686 6,851
Retirement benefits 983 1,195 1,311
9,013 9,071 9,347
Current assets
Inventories 4,821 3,593 4,417
Trade and other receivables 6,041 4,721 5,054
Cash and cash equivalents 44 138 119
10,905 8,452 9,590
Total assets 19,917 17,523 18,937
Current liabilities
Bank overdraft (817) (640) (216)
Bank loans and other borrowings (251) (265) (277)
Current tax payable (188) (199) (64)
Trade and other payables (4,947) (4,061) (4,969)
(6,203) (5,165) (5,526)
Non-current liabilities
Bank loans and other borrowings (2,420) (2,327) (2,379)
Deferred tax liabilities (159) (251) (221)
Other payables (90) - (90)
(2,669) (2,578) (2,690)
Total liabilities (8,871) (7,743) (8,216)
Net assets 11,046 9,780 10,721
Equity
Share capital 1,238 1,231 1,238
Share premium account 628 610 628
Un-issued shares reserve 134 183 134
Merger reserve 230 230 230
Retained earnings 8,816 7,526 8,491
Equity attributable to shareholders of the parent 11,046 9,780 10,721
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
6 months to 6 months to Year to
31 March 2018
31 March 2017
30 Sept 2017
Unaudited Unaudited Audited
£000 £000 £000
Opening equity 10,721 8,689 8,689
Total comprehensive income 529 1,135 2,040
Transactions with owners:
Dividends (204) (185) (315)
Proceeds from issue of shares - 141 166
Tax benefit on share based payments - - 141
Closing equity 11,046 9,780 10,721
CONSOLIDATED CASH FLOW STATEMENT
6 months to 6 months to Year to
31 March 2018
31 March 2017
30 Sept 2017
Unaudited Unaudited Audited
£000 £000 £000
Profit before tax 987 976 1,914
Finance costs 43 32 75
Finance income (18) (10) (21)
Operating profit 1,012 998 1,968
Adjustments for:
Depreciation 319 230 543
Amortisation of intangible assets 6 17 36
(Gain) on sale of property, plant and equipment (8) (341) (321)
Loan arrangement fees - 4 4
1,329 908 2,230
Movements in working capital:
Change in inventories (404) (563) (1,387)
Change in trade and other receivables (987) (43) (376)
Change in trade and other payables (22) 259 1,237
Cash generated from operations (83) 561 1,704
Income taxes paid - - (112)
Retirement benefits (50) (50) (100)
Net cash from operating activities (133) 511 1,492
Purchase of property, plant and equipment (173) (1,354) (1,643)
Proceeds from sale of property, plant and equipment 8 524 525
Capitalised development expenditure (8) (13) (27)
Net cash (used in) / from investing activities (173) (843) (1,145)
Drawdown of bank loans - 500 500
Repayment of bank loans (98) (603) (702)
Repayment of obligations under finance leases (53) (27) (81)
Interest paid (15) (7) (23)
Proceeds from issue of share capital - 141 166
Dividends paid (204) (185) (315)
Net cash (used in) / from financing activities (370) (181) (455)
Net (decrease) / increase in cash and cash equivalents (676) (513) (108)
Cash and cash equivalents at start of the period (97) 11 11
Cash and cash equivalents at end of the period (773) (502) (97)
Reconciliation of cash and cash equivalents
6 months to 6 months to Year to
31 March 2018
31 March 2017
30 Sept 2017
Unaudited Unaudited Audited
£000 £000 £000
Cash and cash equivalents in current assets 44 138 119
Bank overdraft in current liabilities (817) (640) (216)
Cash and cash equivalents at end of the period (773) (502) (97)
NOTES
1 - BASIS OF PREPARATION
These interim consolidated financial statements are for the six months ended
31 March 2018. 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 2017.
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 2017. 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 ending 30 September 2018.
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:
6 months to 6 months to Year to
31 March 2018
31 March 2017
30 Sept 2017
Unaudited Unaudited Audited
Profit for the period - £000 860 898 1,768
Weighted average number of ordinary shares in issue during the period
(million)
12.377 12.186 12.276
Dilutive effect of share options 0.831 0.995 0.903
Number of shares for diluted earnings per share 13.208 13.181 13.179
Basic earnings per share 6.95p 7.37p 14.40p
Diluted earnings per share 6.51p 6.81p 13.42p
3 - ANALYSIS OF NET DEBT
Bank loans Finance lease obligations Cash and cash equivalents Net debt
£000 £000 £000 £000
At 1 October 2017 2,311 345 97 2,753
New finance lease obligations - 138 - 138
Draw down of bank loans - - - -
Interest and arrangement fees 28 - - 28
Repayment of borrowings (98) (53) 151 -
Cash absorbed - - 525 525
At 31 March 2018 2,241 430 773 3,444
4 - INFORMATION
LPA Group plc is the Group's ultimate parent company. It is incorporated in
England and Wales and domiciled in the UK. 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, 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 21 June 2018. The financial
information for the year ended 30 September 2017 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 2017 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 address as
above, or are available on the Company's website (www.lpa-group.com
(http://www.lpa-group.com) ).
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
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