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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Armour Grp | LSE:AMR | London | Ordinary Share | GB0000496611 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 3.25 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:6265A
Armour Group PLC
30 March 2006
Armour Group Plc
Interim Results for the six months ended 28 February 2006
CHAIRMAN'S STATEMENT
RESULTS AND DIVIDEND
The Group's results for the six months to 28 February 2006 have been mixed, with
good growth in Armour Home Electronics being overshadowed by a slowdown in
Armour Automotive.
Sales in the six months to 28 February 2006 were #18.5 million (28 February
2005: #17.6 million). Operating profit before amortisation of goodwill, interest
and tax was #1.7 million (28 February 2005: #2.0 million). Basic underlying
earnings per share were 2.1p (28 February 2005: 2.4p).
The Board is not recommending an interim dividend.
ACQUISITION
On 3 February 2006, the Group acquired Alphason Designs Limited ("Alphason").
Alphason is the UK's market leader in the design, manufacture and distribution
of specialist furniture for audio visual entertainment equipment, which is
predominantly marketed under the Alphason brand. It has very strong and
established distribution channels across the whole of the UK consumer
electronics market serving over 2,500 retail outlets. Taken together with our
existing customer base, the Group will have unprecedented access into the UK's
retail consumer electronics market. Alphason will continue to be run as a
separate operating unit within the products business of the Armour Home
Electronics division.
Consideration
The initial consideration of #10 million was paid on completion, #9.5 million in
cash and #0.5 million in new ordinary shares in the Group. At completion
Alphason had #3.7 million of net cash on its balance sheet, which is for the
benefit of the Group.
If Alphason meets certain challenging profit targets, a deferred consideration
payment of up to #10 million will be payable, primarily in cash, twelve months
after completion.
There will be a further #0.75 million payable in the second 12 months subject to
Alphason achieving an operating profit in excess of #3 million.
Placing
To fund the initial consideration, 12 million new ordinary shares in the Group
were placed at 50p per share raising #5.8 million net of expenses.
OPERATIONS
Armour Automotive
Armour Automotive has continued to experience challenging market conditions in
the first six months.
In the non-retail channel, the slowdown in the wider automotive market has been
significant with orders deferred or scaled back which has affected sales of
Autoleads, RM Audio and Veba. However, we do expect to see some improvement in
the second half of the year with deliveries scheduled to BMW following their
#400,000 order in January 2006 and further repeat business with our other OEM
customers.
We continue to pursue a number of new OEM opportunities that cover a range of
products from in-car radio, CD and DVD players to complex connectivity solutions
for the navigation market. We are confident that we are well positioned to
secure such new business, the difficulty at the current time is in predicting
the timing of the customer's requirements.
In the retail market our sales are in line with last year, though margins have
come under pressure. Mutant continues to perform well with further new products
from the range being listed with Halfords and Motorworld. There is also good
demand for the Autoleads range of MP3 adapter leads, which enable portable
digital music players to plug directly into the in-car entertainment system, and
the Veba range of reversing sensors. Both these product ranges are selling
through both the retail and non-retail channels with customers ranging from the
small independents through to large vehicle distributors, such as Arnold Clark.
We have increased our investment in new product development focusing on
in-vehicle connectivity solutions. The next generation of adapter leads that are
being designed will interface with CANbus, a serial communication system that is
increasingly being incorporated into many new motor vehicles. New products
scheduled for launch in the second half of the year include new ranges of
intelligent interconnect leads for the in-car mobile phone and navigation
markets.
Armour Home Electronics
Armour Home Electronics has had a good six months with like for like sales
growth in both our domestic and export markets as well as across all the key
product categories. In addition, we completed the acquisition of Alphason and
our services business opened its new showroom in Hampstead.
Products
There has been strong sales growth in the core proprietary brands of QED cables,
Systemline multiroom and Soundstyle furniture. Of the third party brands, the
two newcomers, being Universal Electronics' Nevo remote control and Audica's
speakers, have both had an encouraging first six months.
Sales of Systemline Modular, our multi-room entertainment system, have
out-performed our expectations. The adoption of the system by new home builders
as part of their build programme, either as an option or as a standard fit, is
ongoing. Of the top ten home builders in the UK who account for approximately
45% of all new home builds, nine have now adopted Systemline Modular and offer
it as their preferred multi-room entertainment system in one or more of their
regions. The home builders typically offer the system as an option with the
house purchase, though there are an increasing number of new home builds that
are including the system as standard, particularly with the smaller regional
home builders. There are now over 850 standard fit builds scheduled over the
next 12 months.
In the first six months of the year we have launched a number of new products
including the new Goldring range of headphones, QED's highly successful HDMI
interconnect, the Systemline learning remote control and most recently, the Q
Acoustics speaker range. Our programme of product innovation and development
continues apace, with three new Myryad products scheduled for launch in the next
6 months as well as the Systemline Modular touchscreen keypad and music sound
server.
Services
Our custom install service business is performing well and in line with our
expectations. The value of both our order book and outstanding proposals is at
record levels and the conversion rate from proposal to order is above last year.
The business extended its operations in February 2006 opening a new Hi-End
showroom in Hampstead. The initial indications are encouraging for the new
showroom with a number of orders already placed.
OUTLOOK
Market conditions are challenging, particularly in our automotive business where
we do not expect conditions to improve significantly in the near term. Our home
division is performing well and we believe that this will continue, enhanced by
the recent acquisition of Alphason and the opportunities presented by the
forthcoming football World Cup. The Group has a well balanced portfolio of
products, brands and target markets, with both divisions making a healthy return
on sales. This gives the Group a good platform for future growth.
Bob Morton
Chairman
30 March 2006
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE SIX MONTHS TO 28 FEBRUARY 2006
---------- ---------- ----------
Notes Six months to Re-presented* Re-presented*
28 February Six months to Twelve months
to
2006 28 February 31 August
(Unaudited) 2005 2005
#000 (Unaudited) (Audited)
#000 #000
---------- ---------- ----------
Turnover
Continuing operations 17,570 17,610 35,452
Acquisitions 3 961 - -
---------- ---------- ----------
2 18,531 17,610 35,452
========== ========== ==========
Operating profit
Continuing operations 1,525 2,020 4,267
Acquisitions 3 191 - -
---------- ---------- ----------
Operating profit
before amortisation of
goodwill 1,716 2,020 4,267
Amortisation of
goodwill (451) (399) (808)
---------- ---------- ----------
Profit on ordinary
activities before
interest 1,265 1,621 3,459
---------- ---------- ----------
Net interest (235) (225) (470)
---------- ---------- ----------
Profit on ordinary
activities before
taxation 1,030 1,396 2,989
Taxation on profit on
ordinary activities 4 (324) (534) (864)
---------- ---------- ----------
Profit for the
financial period 5 706 862 2,125
========== ========== ==========
Earnings per ordinary
share 7
Basic 1.3p 1.6p 4.0p
Diluted 1.2p 1.5p 3.8p
========== ========== ==========
* See Note 1
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
FOR THE SIX MONTHS TO 28 FEBRUARY 2006
---------- ---------- ----------
Six months to Six months to Twelve months
to
28 February 28 February 31 August
2006 2005 2005
(Unaudited) (Unaudited) (Audited)
#000 #000 #000
---------- ---------- ----------
Profit for the financial
period 706 862 2,125
Currency translation
differences on foreign - (1) (2)
currency net investments
---------- ---------- ----------
Total recognised gains and losses
relating
to the financial period 706 861 2,123
========== ========== ==========
CONSOLIDATED BALANCE SHEET
AT 28 FEBRUARY 2006
---------- ---------- ----------
Notes 28 February 28 February Restated*
2006 2005 31 August
(Unaudited) (Unaudited) 2005
#000 #000 (Audited)
#000
---------- ---------- ----------
Fixed assets
Intangible assets 24,741 14,742 14,533
Tangible assets 2,188 1,869 1,714
---------- ---------- ----------
26,929 16,611 16,247
========== ========== ==========
Current assets
Stocks 10,400 6,309 7,648
Debtors 8,309 6,273 6,937
Cash at bank and in hand 86 85 116
---------- ---------- ----------
18,795 12,667 14,701
========== ========== ==========
Creditors: Amounts falling due
within one year
Creditors (12,801) (5,423) (6,882)
Borrowings (2,216) (3,538) (2,553)
---------- ---------- ----------
(15,017) (8,961) (9,435)
========== ========== ==========
Net current assets 3,778 3,706 5,266
========== ========== ==========
Total assets less current
liabilities 30,707 20,317 21,513
========== ========== ==========
Creditors: Amounts falling due
after more than one year
Creditors (877) (192) (192)
Borrowings (4,180) (2,777) (2,502)
---------- ---------- ----------
(5,057) (2,969) (2,694)
---------- ---------- ----------
Net assets 25,650 17,348 18,819
========== ========== ==========
Capital and reserves
Called up share capital 6,841 5,374 5,482
Share premium account 8,496 3,760 3,861
Other reserves 871 444 444
Profit and Loss Account 9,642 7,970 9,232
Share trust reserve (200) (200) (200)
---------- ---------- ----------
Equity shareholders' funds 5 25,650 17,348 18,819
========== ========== ==========
* See Note 1
CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS TO 28 FEBRUARY 2006
----------- ---------- ----------
Notes Six months to Six months to Twelve months
to
28 February 28 February 31 August
2006 2005 2005
(Unaudited) (Unaudited) (Audited)
#000 #000 #000
----------- ---------- ----------
Net cash inflow
from operating
activities 6(a) 29 1,465 3,650
Returns on investment and
servicing of finance
Interest received 10 8 12
Interest paid (242) (161) (395)
Bank loan
arrangement costs (125) (13) (13)
Interest element of
finance lease
rentals (6) (4) (9)
----------- ---------- ----------
Net cash outflow from returns
on investment
and servicing of
finance (363) (170) (405)
Corporate taxation
paid (132) (922) (1,427)
Capital expenditure and
financial investment
Payments to acquire
tangible fixed
assets (339) (477) (885)
Sale of tangible
fixed assets 22 65 127
----------- ---------- ----------
Net cash outflow
from capital
expenditure (317) (412) (758)
and financial investment
Acquisitions and disposals
Purchase of
subsidiary
undertakings (9,840) (3,590) (3,587)
Net cash acquired
with subsidiary
undertakings 3,659 140 142
----------- ---------- ----------
Net cash outflow from
acquisitions
and disposals (6,181) (3,450) (3,445)
Dividend paid (296) (237) (237)
=========== ========== ==========
Net cash outflow
before financing (7,260) (3,726) (2,622)
Financing
Issue of ordinary
share capital 5,892 70 279
New bank loans 5,000 - -
Repayment of bank
loans (3,143) (285) (571)
Capital element of
finance lease
rental repayments (17) (24) (35)
=========== ========== ==========
Net cash
inflow/(outflow)
from financing 7,732 (239) (327)
=========== ========== ==========
Net cash inflow/(outflow)
after financing, being
the
increase/(decrease)
in cash in the
period 6(b) 472 (3,965) (2,949)
=========== ========== ==========
NOTES TO THE FINANCIAL STATEMENTS
1. BASIS OF PREPARATION
The interim financial statements have been prepared on the basis of accounting
policies consistent with those set out in the Group's Annual Report and
financial statements for the twelve months to 31 August 2005, except that during
the period the Group has adopted FRS 21: Events after the Balance Sheet Date and
FRS 22: Earnings per Share.
Under FRS 21, dividends are only recognised in the period in which a binding
obligation for payment arises.
Consequently, dividends declared after the balance sheet date are no longer
accrued but are appropriated from reserves in the period the declaration takes
place. The prior year comparative figures have been restated to reflect the
adoption of FRS 21 and the effect is set out in note 5: Reconciliation of
Movement in Equity Shareholders' Funds. The Consolidated Profit and Loss Account
has been re-presented to reflect the appropriation of dividends from equity
shareholders' funds.
Implementation of FRS 21 has had no effect on the Consolidated Balance Sheet as
at 28 February 2005. However, the Consolidated Balance Sheet as at 31 August
2005 has been restated to remove the #296,000 dividend accrual declared at the
Annual General Meeting on 9 December 2005. Consequently, at 31 August 2005,
equity shareholders' funds are increased, and creditors falling due within one
year are decreased, by #296,000 from the figures previously reported. This
dividend of #296,000 has been appropriated from shareholders' funds during the
six month period to 28 February 2006.
FRS 22 relates to the calculation of earnings per share but this has had no
material impact on the results.
The results of the Group for the six months to 28 February 2006, and the
comparative figures for the six months to 28 February 2005, are unaudited. The
financial information contained herein does not constitute statutory accounts
within the meaning of Section 240 of the Companies Act 1985.
The statutory accounts for the twelve months to 31 August 2005, which were
approved by the shareholders at the Annual General Meeting and which have been
delivered to the Registrar of Companies, carry an unqualified Auditor's Report.
They do not contain a statement under Section 237(2) or 237(3) of the Companies
Act 1985.
2. TURNOVER
----------- ----------- -----------
Six months to Six months to Twelve months
to
28 February 28 February 31 August
2006 2005 2005
(Unaudited) (Unaudited) (Audited)
#000 #000 #000
----------- ----------- -----------
Group sales by business segment
Armour Automotive 7,674 8,842 18,213
Armour Home Electronics 10,857 8,768 17,239
----------- ----------- -----------
18,531 17,610 35,452
=========== =========== ===========
Group sales by country of operation
United Kingdom 18,348 17,416 34,984
Sweden 381 324 811
Inter-area eliminations (198) (130) (343)
----------- ----------- -----------
18,531 17,610 35,452
=========== =========== ===========
Group sales by country of
destination
United Kingdom 15,023 13,828 27,753
Rest of Europe 2,651 3,298 6,498
Rest of world 857 484 1,201
----------- ----------- -----------
18,531 17,610 35,452
=========== =========== ===========
3. ACQUISITIONS
On 3 February 2006, the Group acquired Alphason Designs Limited, the UK's brand
leading specialist designer and supplier of audio visual furniture to the
consumer electronics market.
4. TAXATION ON PROFIT ON ORDINARY ACTIVITIES
The taxation charge for the six months to 28 February 2006 is based on the
effective taxation rate, which is estimated will apply to earnings for the full
year.
5. RECONCILIATION OF MOVEMENTS IN EQUITY SHAREHOLDERS' FUNDS
----------- ----------- -----------
Six months to Six months to Twelve months
to
28 February 28 February 31 August
2006 2005 2005
(Unaudited) (Unaudited) (Audited)
#000 #000 #000
----------- ----------- -----------
Profit for the financial
period 706 862 2,125
Dividend (296) (237) (237)
----------- ----------- -----------
Profit for the financial
period retained 410 625 1,888
New share capital
subscribed (net of issue
expenses) 5,892 70 279
Ordinary shares issued as
consideration for
acquisitions 529 - -
Currency translation differences on
foreign
currency investments - (1) (2)
----------- ----------- -----------
Net movement in equity
shareholders' funds 6,831 694 2,165
----------- ----------- -----------
Opening equity
shareholders' funds 18,819 16,417 16,417
Prior year adjustment (Note
1) - 237 237
----------- ----------- -----------
Opening equity
shareholders' funds
restated 18,819 16,654 16,654
=========== =========== ===========
Closing equity
shareholders' funds 25,650 17,348 18,819
=========== =========== ===========
6(a). RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING A
CTIVITIES
----------- ----------- -----------
Six months to Six months to Twelve months
to
28 February 29 February 31 August
2006 2005 2005
(Unaudited) (Unaudited) (Audited)
#000 #000 #000
----------- ----------- -----------
Operating profit 1,265 1,621 3,459
Depreciation of tangible
fixed assets 404 379 792
Amortisation of goodwill 451 399 808
(Increase)/decrease in
stocks (1,099) 178 (1,320)
Decrease in debtors 1,382 1,184 341
Decrease in creditors (2,374) (2,289) (503)
(Profit)/loss on disposal
of tangible fixed assets - (7) 73
----------- ----------- -----------
Net cash inflow from
operating activities 29 1,465 3,650
=========== =========== ===========
6(b). RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
----------- ----------- -----------
Six months to Six months to Twelve months
to
28 February 28 February 31 August
2006 2005 2005
(Unaudited) (Unaudited) (Audited)
#000 #000 #000
----------- ----------- -----------
Increase/(decrease) in cash 472 (3,965) (2,949)
New bank loans (5,000) - -
Repayment of bank loans 3,143 285 571
Cash outflow from finance
leases 17 24 35
----------- ----------- -----------
Change in net debt
resulting from cash flows (1,368) (3,656) (2,343)
New finance leases (114) (1) (2)
Bank loan arrangement costs 125 13 13
Bank loan arrangement costs
expensed (14) (20) (39)
Exchange adjustments - - (2)
----------- ----------- -----------
Movement in net debt in the
period (1,371) (3,664) (2,373)
Opening net debt (4,939) (2,566) (2,566)
=========== =========== ===========
Closing net debt (6,310) (6,230) (4,939)
=========== =========== ===========
6(c). ANALYSIS OF NET DEBT MOVEMENT
--------- -------- --------- -------- --------
31 August Cash Other non-cash Acquisitions 28 February
2005 Flow changes #000 2006
#000 #000 #000 #000
--------- -------- --------- -------- --------
Cash 116 (30) - - 86
Overdraft (1,986) 502 - - (1,484)
--------- -------- --------- -------- --------
(1,870) 472 - - (1,398)
--------- -------- --------- -------- --------
Loans: Due
within one
year (555) 215 (330) - (670)
Loans: Due
after more
than one year (2,502) (2,072) 441 - (4,133)
Finance leases (12) 17 - (114) (109)
--------- -------- --------- -------- --------
Net debt (4,939) (1,368) 111 (114) (6,310)
========= ======== ========= ======== ========
7. EARNINGS PER ORDINARY SHARE
Basic earnings per share is calculated using the weighted average number of
shares in issue during the period of 55,789,760 (28 February 2005: 52,638,710
and 31 August 2005: 52,981,021).
Underlying earnings per share is also shown calculated by reference to earnings
before amortisation of goodwill. The Directors consider that this information
gives a useful additional indication of underlying performance.
Six months to Six months to Twelve months to
28 February 28 February 31 August
2006 2005 2005
(Unaudited) (Unaudited) (Audited)
Basic earnings per
ordinary #000 p #000 p #000 p
share ------- ------- ------- ------- ------- -------
Profit for the financial
period 706 1.3 862 1.6 2,125 4.0
Amortisation of goodwill 451 0.8 399 0.8 808 1.5
------- ------- ------- ------- ------- -------
Underlying earnings 1,157 2.1 1,261 2.4 2,933 5.5
======= ======= ======= ======= ======= =======
Diluted earnings per share is calculated with reference to 57,477,692 (28
February 2005: 56,037,243 and 31 August 2005: 55,747,383) ordinary shares.
Six months to Six months to Twelve months to
28 February 28 February 31 August
2006 2005 2005
(Unaudited) (Unaudited) (Audited)
Diluted earnings per
ordinary share #000 p #000 p #000 p
------- ------- ------- ------- ------- -------
Profit for the financial
period 706 1.2 862 1.5 2,125 3.8
Amortisation of goodwill 451 0.8 399 0.8 808 1.5
------- ------- ------- ------- ------- -------
Underlying earnings 1,157 2.0 1,261 2.3 2,933 5.3
======= ======= ======= ======= ======= =======
8. COPIES OF INTERIM REPORT
Copies of this interim report are being sent to shareholders and will also be
made available upon request to members of the public at the Company's Registered
Office, Lonsdale House, 7-9 Lonsdale Gardens, Tunbridge Wells, Kent TN1 1NU.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UKVNRNVROUAR
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