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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Chloride Grp. | LSE:CHLD | London | Ordinary Share | GB0001952075 | ORD 25P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 374.60 | 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 No 0119c
CHLORIDE GROUP PLC
24rd November 1998
UNAUDITED INTERIM RESULTS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 1998
AND
CONDITIONAL ACQUISITION OF ONEAC CORPORATION
Chloride is an international electronics Group operating primarily in Power
Protection and Safety Systems. The strengths of these businesses derive from
the application of innovative technologies, strong positions in growth markets
and the continued achievement of ever higher standards of quality and customer
service.
HIGHLIGHTS
Interim results for the six months ended 30 September 1998
- Turnover on continuing operations up 3% to #55.9 million (1997: #54.3
million), despite a 2.5% adverse exchange impact totalling #1.4 million.
- Operating profit on continuing operations up 12% to #4.3 million (1997:
#3.8
million) after a 3.1% adverse exchange rate impact of #0.1 million.
- Group operating margin up to 7.7% (1997: 7.1%).
- Profit before tax (adjusted for disposal gains) increased by 20% to #5.1
million (1997: #4.2 million).
- Adjusted EPS up by 24% to 1.66p (1997: 1.34p).
- In order to maximise the temporary benefit of foreign income dividend
legislation, an enhanced ordinary interim dividend of 0.60p per share is
payable (1997: 0.28p).
- Strong cash inflow from operating activities at 101% of operating profit.
Acquisition
- Agreements have been exchanged for the acquisition of Oneac Corporation, a
Chicago-based company with a leading position in the US markets for
uninterruptible power supplies ("UPS") and power conditioning. The
consideration is US$30 million plus up to a further US$5 million, depending
on Oneac's earnings for the period to 30 November 1999.
Ray Horrocks, Chairman, commented: "We recognise that there is considerable
economic uncertainty at the current time but are reassured by the resilience
of our markets. This is reflected in the fact that our order book at the
period end was more than 30% ahead of the level at the end of the last financial
year. This strong position underpins our immediate prospects and reflects the
consistent growth of the sectors on which we have focused.
We look forward to further good progress in the second half.
The acquisition of Oneac is in line with our stated strategy of expansion in
the USA, the world's largest Power Protection market.
We will continue to seek further acquisitions in our core businesses."
Enquiries:
Chloride Group PLC All day on 24 November 1998
Keith Hodgkinson (Chief Executive) Tel: 0171 796 4133
Neil Warner (Finance Director) (Hudson Sandler)
Thereafter, tel: 0171 834 5500
Hudson Sandler
Andrew Hayes 0171 796 4133
CHAIRMAN'S STATEMENT
Results
The results for the six months to 30 September 1998 demonstrate the robust
nature of the markets in which Chloride operates. Good growth has been
achieved in volume and margins in both the Power Protection Systems (formerly
UPS) and Safety Systems Divisions.
Group turnover on continuing operations of #55.9 million (1997: #54.3 million)
increased by 3% after a 2.5% adverse exchange rate impact amounting to #1.4
million.
Operating profit on continuing operations was increased by 12% to #4.3 million
(1997: #3.8 million) after a 3.1% adverse exchange rate impact amounting to
#0.1 million. Operating margins grew in both Power Protection Systems and
Safety Systems Divisions as the Group operating margin rose to 7.7%
(1997: 7.1%).
Profit before tax (excluding exceptional disposal gains) increased by 20% to
#5.1 million (1997: #4.2 million) reflecting both the growth in operating
profits and the benefit of returns on increased cash balances.
Adjusted earnings per share rose by 24% to 1.66p (1997: 1.34p).
Financial position
The Group continues to be strongly cash generative, with cash flow from
operating activities at 101% of operating profit. Net funds in the balance
sheet were #28.9 million at the period end.
We also now have available #40 million of committed facilities.
Deputy Chairman
We feel it appropriate that, in accordance with current best practice, a
Deputy Chairman should be appointed. Accordingly I am delighted to announce
the appointment of Bill Foreman in that capacity with immediate effect.
Bill has been a non-executive director of Chloride since 1988 and his
knowledge and experience will be invaluable as the Group grows.
Business segments
Power Protection Systems
We have changed the name of Chloride UPS Division to Chloride Power Protection
Systems Division in order better to reflect the increasingly wider scope of
its activities.
At prior year exchange rates, sales increased by 13% but reported sales of
#33.5 million (1997: #30.6 million) were 9% higher after allowing for an
adverse exchange rate impact of 4%. Operating margins were increased by
nearly 1% to 8.2% as our mid-range Computer Room products and related service
revenues continued to grow in European markets. Economic conditions in the
Far East and Latin America slowed our progress in the first half.
The market for power protection products continues to grow at a rate in excess
of 10% per annum as the exposure to power interruption and power failure is
increasingly recognised by customers who are critically dependent upon
sophisticated electronic systems. Particular growth sectors include
communications, information technology support services, transportation and
retail. These are all areas in which Chloride is increasingly focused and
which continue to grow in both the UK and overseas, despite current economic
uncertainties.
In the first half, important contracts were secured from Mitsubishi for a
major power station system in Syria; NTL UK for digital television transmission
systems; Telecom Italia for a major call centre; the RATP Metro Meteor Line
in Paris; SEEBOARD for London Underground Systems; the new racecourse at
Kranji, Singapore and Expo 98 in Portugal.
Safety Systems
The progress achieved last year has continued in both the UK and the USA.
Turnover at #16.3 million (1997: #15.9 million) was increased by 3% against
the background of a difficult market for emergency lighting in the UK and lost
sales in the USA due to business interruption from the effects of Hurricane
Bonnie at our manufacturing operation in North Carolina.
Operating margins again showed a healthy increase of 1.3% to 7.3%, reflecting
the benefits of new products and careful cost control.
The demand for our Fire Protection, Emergency Lighting and Security products
has increased, driven by increasingly stringent Health and Safety regulations.
This has been aided in the UK by our introduction of easy-to-install
products, such as a new fire control panel and the Ledlite exit sign and the
addition of complementary products such as closed circuit TV.
In the USA, renewed impetus for growth has come from recruitment of better
quality agents, the signing of further own-brand deals and new product
introductions.
Power Conversion
In the early part of the year, we completed the previously announced disposal
of the small Powerline power supplies distribution business in the UK.
Turnover in the remaining CEN business was 22% down at #6.1 million (1997:
#7.8 million) and margins fell to 6.4% (1997: 8.4%). Performance declined
compared with last year owing to anticipated margin pressures and to
substantially reduced business from one of CEN's major customers.
We continue to pursue a strategy to achieve better margins in this business by
increasing focus on battery chargers and magnetics. It is unlikely, however,
that the actions being taken will improve this division's results in the
second half.
Dividend
Given the change in the advance corporation tax and foreign income dividend
regimes to be effected as of next tax year, we are paying an enhanced interim
dividend of 0.60p per share (1997: 0.28p) in order to optimise our corporation
tax position. Our dividend policy will be subject to review later in the year
but we anticipate at this point in time that we shall follow our recent trend
of increasing the full year dividend in line with earnings growth while
maintaining a prudent dividend cover.
The interim dividend will be paid as a foreign income dividend on 29 January
1999 to shareholders on the register at the close of business on
4 December 1998.
Acquisition
We are pleased to announce conditional agreement to acquire Oneac Corporation,
a leading Chicago-based UPS and power conditioning company. This is in line
with our stated strategy of expansion in the USA, the world's largest power
protection market. The consideration is US$30 million, payable in cash on
completion, plus cash of up to a further US$5 million depending on performance
to 30 November 1999.
It is expected that, for the 12 months to 30 November 1998, Oneac will have
sales of US$34 million and a profit before tax of approximately US$3 million
before exceptional costs of US$1.4 million (1997: break even at the profit
before tax level after exceptional costs of US$0.9 million on sales of US$28.4
million). At 30 November 1997, Oneac had net assets of US$5.1 million. The
business, which is privately owned, has approximately 200 employees in the USA
and a further 20 in a UK subsidiary.
The acquisition, which is conditional on clearance under US competition
legislation and on approval by Oneac's shareholders, is expected to be
completed by the end of January 1999.
Outlook
We recognise that there is considerable economic uncertainty at the current
time but are reassured by the resilience of our markets. This is reflected in
the fact that our order book at the period end was more than 30% ahead of the
level at the end of the last financial year. This strong position underpins
our immediate prospects and reflects the consistent growth of the sectors on
which we have focused.
To ensure the continuing development of Chloride in the longer term, we will
continue to invest in our people, processes and systems to support our
customer care programmes. This is designed to position the Group as the
supplier of choice in each of our markets.
Also we will continue to seek further acquisitions in our core businesses.
We look forward to further good progress in the second half.
The half year report for the six months to 30 September 1998 is being issued
to shareholders and will be available to the public at the company's registered
office at Abford House, 15 Wilton Road, London, SW1V 1LT (Tel: 0171 834 5500;
fax: 0171 630 0563; e-mail: enquiries@chloridegroup.com).
SUMMARISED CONSOLIDATED PROFIT AND LOSS ACCOUNT (UNAUDITED)
Year to Six months to Six months to
31 March 1998 30 September 1998 30 September 1997
(as restated)
#000 #000 #000 #000 #000 #000
Turnover
111,234 Continuing operations 55,850 54,290
4,630 Discontinued operations 315 3,304
_______ ______ ______
115,864 56,165
57,594
_______ ______
______
Operating profit/(loss)
8,798 Continuing operations 4,317 3,847
(49) Discontinued operations 31 (73)
_______ _____ _____
8,749 4,348 3,774
Profit on disposal of
100 discontinued operations 800 100
_____ _____ _____
Profit on ordinary
8,849 activities before interest 5,148 3,874
1,153 Net interest receivable 740 460
______ _____ _____
Profit on ordinary
10,002 activities before taxation 5,888 4,334
Tax on profit on ordinary
2,277 activities 1,170 967
______ _____ _____
Profit on ordinary
7,725 activities after taxation 4,718 3,367
2,348 Dividends 1,417 663
_____ _____ _____
5,377 Retained profit 3,301 2,704
_____ _____ _____
Earnings per 25p ordinary share
3.24p Basic 2.00p 1.38p
3.23p Diluted 1.98p 1.38p
3.20p Adjusted 1.66p 1.34p
SUMMARISED CONSOLIDATED BALANCE SHEET (UNAUDITED)
At At At
31 March 1998 30 September 1998 30 September 1997
#000 #000 #000
13,782 Fixed assets 14,356 14,086
______ ______ ______
16,838 Stock 17,740 16,902
32,241 Debtors 30,806 31,291
31,055 Cash at bank and in hand 31,908 26,429
______ ______ ______
80,134 Current assets 80,454 74,622
Creditors: amounts falling due
37,130 within one year 35,576 31,006
______ ______ ______
43,004 Net current assets 44,878 43,616
______ ______ ______
Total assets less current
56,786 liabilities 59,234 57,702
Creditors: amounts falling due
832 after one year 369 710
Provisions for liabilities and
5,177 charges 4,512 7,172
______ ______ ______
50,777 Net assets 54,353 49,820
______ ______ ______
50,777 Shareholders' funds 54,353 49,820
______ ______ ______
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES AND
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS (UNAUDITED)
Year to Six months to Six months to
31 March 1998 30 September 1998 30 September 1997
#000 #000 #000
7,725 Profit for the period 4,718 3,367
Currency translation
differences on foreign
(1,819) currency net investments 202 (525)
______ ______ ______
Total recognised gains for
5,906 the period 4,920 2,842
(2,348) Dividends (1,417) (663)
78 New share capital and premium 73 13
(425) Goodwill written off - -
(62) Redemption of preference stock - -
______ ______ ______
Net increase in shareholders'
3,149 funds 3,576 2,192
47,628 Opening shareholders' funds 50,777 47,628
______ ______ ______
50,777 Closing shareholders' funds 54,353 49,820
______ ______ ______
SUMMARISED CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED)
Year to Six months to Six months to
31 March 1998 30 September 1998 30 September 1997
#000 #000 #000
Cash flow from operating
activities
8,749 Operating profit 4,348 3,774
Depreciation and goodwill
2,447 amortisation 1,201 1,255
Profit on sale of tangible
(91) assets (7) -
(759) Working capital increase (1,134) (2,927)
______ ______ ______
Net cash inflow from
10,346 operating activities 4,408 2,102
Returns on investments and
1,151 servicing of finance 740 460
(1,381) Taxation (403) 175
(2,007) Capital expenditure (1,584) (838)
(2,089) Purchase of own shares (398) (2,110)
1,373 Acquisitions and disposals 1,300 1,723
(1,786) Dividends paid (1,710) (1,144)
Management of liquid resources
Net (increase)/decrease in
(1,031) short-term deposits (2,227) 1,811
Financing
Net cash outflow from
(1,584) financing (74) (1,250)
______ ______ ______
2,992 Increase in cash 52 929
______ ______ ______
Reconciliation of net cash flow to movement in net funds
Year to Six months to Six months to
31 March 1998 30 September 1998 30 September 1997
#000 #000 #000
2,992 Increase in cash in the period 52 929
Net cash outflow from decrease
1,600 in debt and lease financing 147 1,263
Cash outflow/(inflow) from
1,031 movement in liquid resources 2,227 (1,811)
(56) New finance leases - -
505 Exchange translation differences (336) 247
______ ______ ______
Increase in net funds in the
6,072 period 2,090 628
20,782 Opening net funds 26,854 20,782
______ ______ ______
26,854 Closing net funds 28,944 21,410
______ ______ ______
NOTES TO THE INTERIM FINANCIAL STATEMENTS (UNAUDITED)
1 Segmental analysis
Year to Six months to Six months to
31 March 1998 30 September 1998 30 September 1997
(as restated)
Profit Profit
/(loss) Profit /(loss)
before before before
Turnover interest Turnover interest Turnover interest
#000 #000 #000 #000 #000 #000
64,275 5,280 Power Protection Systems 33,454 2,742 30,605 2,242
32,135 2,302 Safety Systems 16,317 1,184 15,876 946
14,824 1,216 Power Conversion 6,079 391 7,809 659
_______ ______ ______ ______ ______ ______
111,234 8,798 Continuing operations 55,850 4,317 54,290 3,847
Discontinued operations
4,630 (49) Operating activities 315 31 3,304 (73)
- 100 Net exceptional gains - 800 - 100
_______ ______ ______ ______ ______ ______
115,864 8,849 56,165 5,148 57,594 3,874
_______ ______ ______ ______ ______ ______
2 Preparation of the interim financial statements
The interim financial statements, which are unaudited, have been prepared
on the basis of the accounting policies set out in the Group's 1998 annual
report, except as noted below.
The Group has adopted Financial Reporting Standards ("FRS") 10, "Goodwill and
Intangible Assets", and 11, "Impairment of Fixed Assets and Goodwill". As a
consequence, goodwill acquired in the future will be capitalised and its
subsequent measurement (via annual impairment review or annual amortisation
charge) will be determined based on the individual circumstances of each
business acquired. Goodwill written off to reserves prior to 31 March 1998 is
not recorded in the Group balance sheet.
The Group has also adopted FRS12, "Provisions, Contingent Liabilities and
Contingent Assets" and FRS14, "Earnings per share".
The comparative figures for the year ended 31 March 1998 do not comprise full
financial statements and have been extracted from the Group's 1998 statutory
accounts which have been filed with the Registrar of Companies. The auditors'
opinion on those accounts was unqualified and did not include any statement
under section 237 of the Companies Act 1985.
3 Taxation
The tax charge provided at the half year is based on the estimated effective
tax rate for each undertaking in the Group applicable to the year to 31 March
1999 as applied to the taxable profits for the period. No tax charge is
expected to arise in respect of the profit on the disposal of the Powerline
division of Chloride Electronics Limited (note 4).
4 Discontinued operations
The profit before interest of #31,000 shown under discontinued operations in
the segmental analysis (note 1) relates to the profit from operating
activities earned by the Powerline division of Chloride Electronics Limited
prior to its disposal on 1 May 1998. The exceptional gain of #800,000 also
relates to the disposal of Powerline. The comparative figures for the six
months to 30 September 1997 have been restated to include the results of
Powerline along with the results of Chloride Security Distribution Limited in
that period.
5 Earnings per share
Six months to
Year to 30 September
31 March 1998 1998 1997
Weighted average number of
ordinary shares - basic and
238.2m adjusted 236.2m 243.2m
0.8m Shares under option 1.5m 0.6m
Weighted average number of
239.0m ordinary shares - diluted 237.7m 243.8m
#000 #000 #000
Profit after preference
dividends for basic and
diluted earnings per share
7,723 calculations 4,718 3,367
_____ _____ _____
100 Exceptional items 800 100
Profit for adjusted earnings per
7,623 share calculation 3,918 3,267
_____ _____ _____
3.24p Earnings per share - basic 2.00p 1.38p
3.23p - diluted 1.98p 1.38p
3.20p - adjusted 1.66p 1.34p
The calculation of diluted earnings per share has been carried out in
accordance with FRS14 and assumes that exercises of current options will be
met by the issue of new shares. The company has established an Employee
Benefit Trust which holds shares purchased in the market at prices which, on
average, match the option prices. As the weighted average number of shares
excludes shares held by the Employee Benefit Trust (note 6), these purchases
have been non-dilutive.
6 Fixed assets
Fixed assets include #2,967,000 of goodwill and #2,487,000 in respect of a
holding, at 30 September 1998, of 7,521,920 of the company's ordinary shares.
These shares, held by the Employee Benefit Trust established to purchase
shares in the market to satisfy the potential exercise of certain executive
share options, had a market value in excess of #3,000,000 at the half-year.
7 Analysis of net funds
Closing net funds comprise the following:
At At At
31 March 1998 30 September 1998 30 September 1997
#000 #000 #000
5,955 Cash 4,690 4,169
25,100 Short-term deposits 27,218 22,260
______ ______ ______
31,055 Cash at bank and in hand 31,908 26,429
______ ______ ______
Due within one year:
(2,899) Overdrafts (1,720) (3,337)
(127) Other borrowings/debt (226) -
(440) Discounted trade bills (350) (629)
(235) Finance lease obligations (151) (343)
______ ______ ______
(3,701) (2,447) (4,309)
______ ______ ______
Due after more than one year:
(200) Other borrowings/debt (218) (221)
(300) Finance lease obligations (299) (489)
______ ______ ______
(500) (517) (710)
______ ______ ______
26,854 Net funds 28,944 21,410
______ ______ ______
3,056 Net cash 2,970 832
25,100 Liquid resources 27,218 22,260
(1,302) Financing (1,244) (1,682)
______ ______ ______
26,854 28,944 21,410
______ ______ ______
END
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