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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 Number:4968G
Chloride Group PLC
29 October 2007
29 October 2007
CHLORIDE GROUP PLC
INTERIM RESULTS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2007
Chloride Group PLC, a leading specialist provider of secure power solutions,
today announces its interim results for the six months ended 30 September 2007.
HIGHLIGHTS
2007 2006 Change
Sales (# million) 121.8 93.3 +31%
Adjusted operating profit* (# million) 14.6 10.3 +43%
Adjusted profit before tax* (# million) 13.2 9.5 +39%
Profit before tax 12.2 9.4 +30%
Operating margin** 12% 11% +1pt
Adjusted earnings per share* (pence) 3.86 2.91 +33%
Interim dividend (pence) 1.60 1.30 +23%
*Profit/earnings per share from operations before amortisation of acquired
intangibles (see note 5 to the financial statements)
**Profit from operations before amortisation of acquired intangibles as a % of
sales
* Strong sales growth, with product sales up 34% and service
revenue up 23%
* Orders well ahead of sales with significant growth in IT
services and oil and gas
* Adjusted operating profit up 43% at #14.6 million (2006:
#10.3 million)
* Continued improvement in the operating margin - up 1 point
to 12% (2006: 11%)
* Further investment in DB Power Electronics, India
increases shareholding to 32% of share capital
* Manufacturing joint venture with Phoenixtec Power Company
in China
* Strong order book for products and services as we enter
the second half
Commenting on these results, Keith Hodgkinson, Chief Executive said:
"Chloride has achieved an excellent first half, with significant increases in
product and service revenue. Our successful strategy as a total solutions
provider has been a major factor in winning orders for large systems in our
markets around the world. Market conditions remain buoyant and we expect
further progress in the second half."
Enquiries:
Chloride Group PLC All day on 29 October 2007
Keith Hodgkinson (Chief Executive) Tel: 020 7796 4133 (Hudson Sandler)
Neil Warner (Finance Director) Thereafter, tel: 020 7881 1440
Hudson Sandler Tel: 020 7796 4133
Andrew Hayes/Kate Hough
CHIEF EXECUTIVE'S REVIEW
The Board is pleased to announce results for the first half year significantly
ahead of last year. Continuing the trend of 2006/07, sales have increased
substantially, both in the core European market and in the Middle East and Asia
Pacific where we are achieving excellent momentum. The rapid pace of growth was
particularly evident in the IT services, oil and gas and energy market sectors,
where Chloride's secure power solutions provide significant competitive
advantage.
We continued to make strategic investments to further accelerate growth,
extending our capabilities in chosen sectors and in geographic markets where
there is strong demand for our secure power solutions.
Key Financials
During the period sales were up 31% at #121.8 million (2006: #93.3 million),
with product sales up 34% at #83.3 million and service revenue up 23% at #38.5
million, demonstrating the importance to our customers of lifetime support for
their critical power systems.
Adjusted operating profit was up by 43% at #14.6 million (2006: #10.3 million).
Adjusted profit before tax increased by 39% to #13.2 million (2006: #9.5
million), reflecting the higher interest charge resulting from increased
borrowings required to complete the acquisitions and support the increase in
working capital required to support the growth in the business. Profit before
tax increased by 30% to #12.2 million (2006: #9.4 million).
Adjusted earnings per share was up 33% at 3.86p (2006: 2.91p), with basic EPS up
22% at 3.51p (2006: 2.87p), following an increase in the effective tax rate on
adjusted profit before tax to 28% (2006: 26%).
Cash generated by operations was circa 60% of adjusted operating profit,
reflecting the increase in working capital needed to support the strong growth
in orders and sales. Gearing remained low with net debt at 30 September 2007 of
#31.3 million (March 2007: #21.3 million). The net debt reflected, in addition
to the growth in working capital, the acquisition of AST Electronique Services
SARL (ASTE) and Ascor Power Systems Pte Limited, (Ascor); the increase in our
investment in DB Power Electronics Pvt Limited (DB Power) to 20% of the share
capital; and the purchase of #1.5 million of own shares by the Employee Benefit
Trust. Interest cover was 10 times.
The operating margin was increased by 1 point to 12% (2006: 11%), as the Company
continued its focus on improving efficiencies throughout the business.
At the period end we held a record order book for both products and services,
which provides a strong platform for further growth as we enter the second half.
Markets
The world market for UPS products is expected to continue its consistent growth
trend. The latest forecast from independent market researchers Frost & Sullivan
is for the world UPS market to grow to $10 billion by 2011 - an increase of
close to $3 billion in the period from 2007, giving a compound annual growth
rate of 8.6%.
We believe that increasing demand for secure electrical power in an environment
of degrading power quality, where development of the power infrastructure fails
to keep pace with economic expansion, will continue to drive growth in our
markets. Chloride's strategic positioning as a secure power solutions provider
is directly focused on the needs of growing markets, particularly IT services,
with tailored solutions for data centres and other IT services applications
which enable us to exploit the positive momentum of the digital economy. We
also enjoy strong positions in fast-growing market segments such as oil and gas,
energy, government, transport and retail.
Worldwide focus on secure power solutions
Western Europe
Western Europe remains our largest geographic market, accounting for 62% of
sales. Sales were up 28%, with particularly good progress in the UK, Spain and
Germany. We continued to invest in our capabilities and facilities in Europe:
* In the UK, Masterpower Electronics, acquired in March 2007, performed in
line with expectations and is an excellent platform for Chloride to build
its business in offshore and onshore projects in the UK. Chloride Harath
moved into a custom-built facility, improving operational efficiency and
providing leading edge training facilities for our employees and customers.
* In Spain, the integration of Cener and Chloride Espana was completed,
forming a single business with a reduced cost base and a consistent,
highly-focused approach to the market.
* In France, we acquired ASTE to enhance our sales and service
capabilities.
Eastern Europe
Sales in Eastern Europe increased by 32%, with especially good performances in
Turkey and neighbouring Central Asian territories, which have fast-growing
energy and oil and gas industries. Our recently-established business in
Kazakhstan has exceeded expectations. The enhanced technical and logistics
support for the region has resulted in rapid market acceptance of Chloride's
solutions. Our recently-formed subsidiary in Poland also performed well
achieving strong growth in products and services.
Middle East
As anticipated, Chloride achieved outstanding growth in the Middle East with
sales up 81%. This was due to success in major airport projects in Dubai and
Qatar and particularly good progress in important oil and gas and energy
projects in the UAE and Saudi Arabia.
Asia Pacific
Excellent performances were achieved in India, Australia, and China, with sales
in the Asia Pacific region up 58% overall. Our partnership with DB Power
continues to generate accelerated growth for large systems in the dynamic Indian
market, where we are securing major projects from companies such as Dell, IBM
and Microsoft. We were therefore pleased to increase our stake in DB Power to
20% of the share capital in July 2007, followed by a further increase to 32% in
October.
In Singapore, the strategic acquisition in May 2007 of Ascor will provide a
platform to grow our sales in the buoyant Singapore and SE Asia markets. This
development has been welcomed by our customers there and we are immediately
investing in new facilities to improve customer service and testing facilities
in this important region.
In October 2007, a joint venture agreement was signed with Phoenixtec Power
Company to set up a jointly-owned manufacturing facility in China, to produce
large systems to Chloride's specification. Production will commence in the
fourth quarter 2007/2008 and will give us access to a high-quality, low-cost
manufacturing facility in China.
The Americas
In North America modest sales growth (6% in US dollar terms) was achieved in the
first half. This was a substantial improvement over the second half of last
year. The new management has focused on new sales strategies which are now
delivering improved orders, sales and profits. New large systems have been well
received by the market and we anticipate further improved performance in the
second half.
Our small business in Latin America performed well with good sales growth in
Brazil, Peru and Mexico.
Investment in solutions and people development
We continued to invest in improving our technology and skills base, to support
our strategy for growth.
Technology
We introduced new static transfer switches to improve our capabilities in tier 4
data centre projects, a new 90-net 750 kva UPS system, to extend the range for
the US market and a range of Power Lan models with increased energy efficiency.
Enhancements were also made to our industry-leading remote diagnostic system -
LIFE.net, enabling internet communications, and extending the range of equipment
served by LIFE.net.
Demonstrating our commitment to the Indian market, we took the decision to set
up a new R&D centre in Pune, India, with additional resources and
state-of-the-art equipment. Chloride will in due course have access to over 100
technology and software development engineers in the Pune facility.
Chloride Academy
The Chloride Academy, established last year to improve professional and
technical skills across the Group, completed its first training programmes,
focusing on pre-sales activities and technical support. The courses received
enthusiastic support from the participants who appreciate the benefits of
continuing education, both to their business performance and to their personal
development. The number of people attending courses will increase in the second
half, speeding up the availability of training across the Group.
Dividend
Based on its continuing confidence in the Company's prospects, the Board is
pleased to announce a 23% increase in the interim dividend to 1.60p per share
(2006: 1.30p). Payment will be made on 5 December 2007 to all shareholders on
the register on 9 November 2007.
Non-Executive Director
In September 2007, we announced the appointment of Paul Lester, Chief Executive
of VT Group plc, as a non-executive director. Paul brings to the Board
wide-ranging experience of managing international businesses, particularly in
the field of facilities management and service delivery. We are delighted that
he has joined the Company.
Outlook
Secure power is a vital part of business continuity planning and risk management
for international businesses, whose mission-critical systems rely on the quality
of the electrical power supply. We believe this will continue to drive the
growth of our markets, in an environment where the electrical power
infrastructure fails to keep pace with the increase in demand for clean,
reliable power. Chloride's strategic positioning as a secure power solutions
provider is directly focused on the needs of these growing markets, and we are
well placed to benefit from the increasing demand.
We enter the second half with a record order book, visibility of significant
opportunities in the second half and confidence in the positive outlook for our
markets. We are therefore well positioned for further progress in the second
half of the year.
Keith Hodgkinson
Chief Executive
FINANCIAL REVIEW
Total shareholder return
Total shareholder return has continued to grow ahead of the Small Cap Index over
the last six months reflecting the growth in the share price and dividends as
the market anticipated the strong results now reported and increased
expectations for the full year.
Cash generated by operations
Management remains committed to turning profits into cash to enable reinvestment
in the Group's businesses. After a controlled increase in inventory to support
strong sales growth, adjusted cash generated by operations was circa 60% of
adjusted operating profit. The seasonal nature of certain payments will have
the impact of helping to improve the conversion ratio in the second half year.
Capital expenditure
Capital expenditure on tangible fixed assets and software in the half year was
#2.1 million. This largely reflects facility improvements and further
investment in the IT infrastructure and information systems and upgrades to
witness testing capacity.
Interest/net debt
The net interest charge for the six months ended 30 September 2007 was #1.5
million. Net debt rose to #31.3 million (March 2007: #21.3 million), reflecting
the acquisitions of ASTE and Ascor, the increased investment in DB Power to 20%
of the share capital, the purchase of #1.5 million of own shares by the Employee
Benefit Trust and the inventory build up discussed above. Interest cover was 10
times.
Currency impact
The Company operates a central treasury function, and net exchange exposures
continue to be hedged at a transactional level using the forward foreign
exchange market. The majority of transactions relate to "fair value" hedges of
foreign currency receivables and payables with short-term maturity.
Additionally, the Company uses "cash flow" hedges, generally with regard to
forward purchases of components and finished goods. Receivables designated as
fair value and cash flow hedges are revalued at the period end date and recorded
in the balance sheet as assets or liabilities. The resultant gain or loss on
fair value derivatives is recorded in the income statement along with the gain
or loss arising from the revaluation of the underlying receivable or payable.
The gain or loss on cash flow derivatives is recorded as a movement in equity to
the degree that the hedge is deemed effective.
Apart from optimising expenses and interest on currency borrowings, the Company
does not believe, as an internationally-based business, that it is appropriate
to hedge other aspects of its profit and loss account translation exposure.
Non-sterling currencies of primary importance to the Group moved as follows in
the year:
30 Sept 2007 31 March
Period end 2007 H1 2007 Average H1 2006 Average
Year end Change Change
US $ 2.02 1.96 -3% 2.00 1.87 -7%
Euro 1.43 1.47 +3% 1.47 1.46 -1%
Taxation
The tax charge for 2007/08 is estimated at a rate on adjusted profit before tax
of 28% (2006/07: 26%), which is below the standard corporation tax rates for
most of the countries in which we operate, largely driven by the
utilisation/recognition of tax losses.
Pensions/post-employment benefits
The cost of defined benefit plans is recognised over the average remaining
service lives of the participating employees, but the amount recognised in each
period is dependent on the change during the period in the recognised defined
benefit liability or asset, with actuarial gains/losses on the assets and
liabilities (net of tax) taken to reserves through the Statement of Total
Recognised Income and Expense (SORIE). The defined benefit liability or asset
comprises the net total of the present value of the defined benefit obligation
at the balance sheet date, less any past service cost not recognised, less the
fair value of the plan assets, if any, at the balance sheet date.
The Company operates post-employment benefit schemes in the UK, Germany, Italy
and France. The largest scheme is in the UK, which has a surplus of #0.4 million
(March 2007: #0.3 million deficit). Changes in the valuation assumptions at the
half year (primarily the use of a higher discount rate as determined by the
increase in market bond yields) which have reduced the liability by #0.9 million
were offset by a lower than expected performance in asset returns of #0.2
million. This net adjustment is shown in the SORIE.
The Group net pension liability has decreased to #5.9 million (March 2007: #7.3
million).
Share-based payments
The cost of employee share schemes, including option schemes, is based on the
fair value of the awards that must be assessed using an option-pricing model
such as Black-Scholes. Generally, the fair value of the award is expensed on a
straight-line basis over the vesting period. Adjustments are made to reflect
expected and actual forfeitures during the vesting period due to failure to
satisfy either service conditions or non-market performance conditions, such as
EPS growth targets. In accordance with IFRS 2 the pre-tax charge to the income
statement of employee share schemes in the period is #0.6 million (2005: #0.4
million) reflecting the impact of the annual grant made in June 2007.
Risks and uncertainties
The principal risks and uncertainties affecting the business activities of the
Group remain those detailed on page 12 of the Annual Report and Accounts for the
year ended 31 March 2007, a copy of which is available on the Company's website
at www.chloridegroup.com. Those risks and uncertainties are expected to
continue to apply during the remaining six months of the financial year, and the
Chief Executive's Review sets out the primary issues affecting the Group's
businesses.
Neil Warner
Group Finance Director
Certain statements in this interim management report are forward looking.
Although the Company believes that the expectations contained in such statements
are reasonable, it can give no assurance that these expectations will prove to
be correct. Actual results may differ materially to those expressed or implied
in by these forward-looking statements.
CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2007
Six months Six months Year ended
ended 30 ended 30 31 March
Sept 2007 Sept 2006 2007
#000 #000 #000
Notes (Unaudited) (Unaudited) (Audited)
Sales 2 121,847 93,327 204,438
Cost of sales 68,270 52,050 115,439
Gross profit 53,577 41,277 88,999
Distribution costs 18,340 14,176 32,004
Administrative costs 20,602 16,839 33,510
Operating profit before amortisation of acquired
intangibles 14,635 10,262 23,485
Other operating costs :
Amortisation of acquired intangibles (934) (98) (700)
Operating profit 2 13,701 10,164 22,785
Finance costs 4 (2,816) (1,769) (4,196)
Investment income 4 1,336 989 2,410
Profit before tax 12,221 9,384 20,999
Income tax expense 6 (3,618) (2,463) (5,546)
Profit for the period attributable to equity 8,603 6,921 15,453
shareholders
Earnings per share 5
Basic 3.51p 2.87p 6.38p
Diluted 3.45p 2.81p 6.29p
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2007
Six months Six months Year ended
ended 30 ended 30 31 March
Sept 2007 Sept 2006 2007
#000 #000 #000
(Unaudited) (Unaudited) (Audited)
Exchange differences arising on translation of foreign 2,147 (4,548) (5,042)
operations
Profits/(losses) on cash flow hedges 152 (254) (594)
Actuarial gains /(losses) on post-employment employee 886 (473) 741
benefits
Tax on items recognised in equity (354) 109 54
Income and expense for the period recognised in equity 2,831 (5,166) (4,841)
Transfers (662) (78) 362
Profit for the period 8,603 6,921 15,453
Total recognised income and expense for the period 10,772 1,677 10,974
CONSOLIDATED BALANCE SHEET
AT 30 SEPTEMBER 2007
At 30 Sept At 30 Sept At 31 March
2007 2006 2007
Notes #000 #000 #000
(Unaudited) (Unaudited) (Audited)
Assets
Non-current assets
Goodwill 55,248 40,936 52,859
Other intangible assets 9,854 3,077 9,554
Property, plant and equipment 9 16,914 16,608 16,561
Interest in associate 10 2,148 - -
Investments - 634 638
Deferred tax assets 5,680 5,923 6,105
89,844 67,178 85,717
Current assets
Inventories 34,503 26,330 28,560
Trade and other receivables 74,433 59,628 73,829
Derivative financial instruments 484 - 266
Cash and cash equivalents 12 15,565 23,786 20,470
124,985 109,744 123,125
Total assets 214,829 176,922 208,842
Liabilities
Current liabilities
Bank overdrafts and other loans 12 2,386 9,664 5,338
Obligations under finance leases 25 22 27
Trade and other payables 69,616 51,530 72,013
Derivative financial instruments 660 128 238
Tax payable 10,358 12,623 14,847
Provisions 4,843 4,045 4,160
87,888 78,012 96,623
CONSOLIDATED BALANCE SHEET CONTINUED
AT 30 SEPTEMBER 2007
At 30 Sept At 30 Sept At 31 March
2007 2006 2007
Notes #000 #000 #000
(Unaudited) (Unaudited) (Audited)
Non-current liabilities
Bank and other loans 12 44,399 29,560 36,360
Obligations under finance leases 27 36 19
Other payables - - 31
Post-employment benefits 5,943 7,340 6,369
Deferred tax liabilities 2,060 1,457 2,247
Tax payable 1,016 374 879
Provisions 2,145 2,114 2,212
55,590 40,881 48,117
Total liabilities 143,478 118,893 144,740
Net assets 71,351 58,029 64,102
Equity
Issued capital 11 63,542 62,251 63,090
Share premium 4,380 3,015 3,882
Own shares (11,328) (8,198) (10,408)
Retained earnings 16,011 4,050 11,021
Foreign exchange reserve (1,303) (2,956) (3,450)
Hedge reserve account 49 (133) (33)
Equity attributable to equity holders of the parent 13 71,351 58,029 64,102
CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2007
Six months Six months Year ended
ended 30 ended 30 31 March
Sept 2007 Sept 2006 2007
#000 #000 #000
(Unaudited) (Unaudited) (Audited)
Operating activities
Operating profit 13,701 10,164 22,785
Intangible asset amortisation 1,212 265 1,233
Depreciation of property, plant and equipment 1,403 1,352 2,657
Book (gain)/ loss on sale of property, plant and equipment (64) 3 (8)
Non-cash charge for employee share schemes 613 438 885
Post-employment benefits 333 (2,391) (1,957)
Restructuring - (286) (508)
(Decrease)/increase in other provisions 504 (33) 7
Operating cash flow before working capital movements 17,702 9,512 25,094
Increase in inventories (4,853) (1,261) (2,396)
Decrease/(increase) in trade and other receivables 450 3,352 (9,075)
(Decrease)/increase in trade and other payables (4,626) (4,524) 10,709
Operating cash flow 8,673 7,079 24,332
Income taxes paid (6,764) (327) (2,228)
Finance costs paid (1,816) (1,018) (2,677)
Investment income 390 120 654
Net cash from operating activities 483 5,854 20,081
Investing activities
Purchase of property, plant and equipment (1,447) (1,080) (2,448)
Purchase of software (605) (475) (704)
Sale of property, plant and equipment 86 17 65
Purchase of businesses (2,596) - (15,093)
Purchase of investment (1,511) - -
Net cash used in investing activities (6,073) (1,538) (18,180)
CONSOLIDATED CASH FLOW STATEMENT CONTINUED
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2007
Six months Six months Year ended
ended 30 ended 30 31 March
Sept 2007 Sept 2006 2007
#000 #000 #000
(Unaudited) (Unaudited) (Audited)
Financing activities
Share capital issued 950 4 1,704
(Purchase)/Sale of own shares (1,511) 952 (1,258)
Capital element of finance lease repayments - (14) (27)
Decrease in short-term borrowings (2,926) (3,787) (7,958)
Increase in long-term borrowings 8,016 3,958 10,754
Equity dividends paid (4,166) (3,014) (6,181)
Net cash from/(used in) financing activities 363 (1,901) (2,966)
Net (decrease)/ increase in cash and cash equivalents (5,227) 2,415 (1,065)
Cash and cash equivalents at beginning of period 19,985 21,969 21,969
Net foreign exchange differences 636 (848) (919)
Cash and cash equivalents at period end 15,394 23,536 19,985
NOTES TO THE ACCOUNTS
1 Basis of accounting
The consolidated financial statements of Chloride Group PLC for the six-month
period ended 30 September 2007 were authorised in accordance with a resolution
of the directors of Chloride Group PLC on 29 October 2007.
The financial information for the period ended 30 September 2007 does not
constitute statutory accounts as defined in section 240 of the Companies Act
1985. Statutory accounts for the year ended 31 March 2007 have been reported on
by the Company's auditors and delivered to the Registrar of Companies. The
report of the auditors was unqualified and did not contain statements under
Section 237 of the Companies Act 1985. The results for the six months ended 30
September 2007 are neither audited nor reviewed by the Company's auditors.
The financial information included within the interim financial report has been
prepared in accordance with the Disclosure and Transparency Rules of the
Financial Services Authority and with IAS 34, ('Interim financial reporting') as
adopted by the European Union, using accounting policies consistent with
International Financial Reporting Standards (IFRS) as endorsed by the European
Union, which are the same as those set out in the Group's published accounts for
the period ended 31 March 2007.
Details of the Group's significant accounting policies are available from the
registered office and in the Group's annual report which is available at
www.chloridegroup.com. In the current financial year, the Group will adopt IFRS
7 Financial Instruments: Disclosures and the amendment to IAS 1 Presentation of
Financial Statements for the first time. As these are disclosure standards,
there is no impact on the interim financial statements.
2 Segmental information
The Company derives its revenue and profits from a single class of business,
secure power solutions.
Segment revenue Segment profit and loss
Six months Six months Year ended Six months Six months Year ended
to 30 Sept to 30 Sept 31 March to 30 Sept to 30 Sept 31 March
2007 2006 2007 2007 2006 2007
#000 #000 #000 #000 #000 #000
Europe 100,757 74,649 167,398 13,648 10,553 24,177
Americas 12,083 12,167 23,563 1,146 881 1,768
Asia and Australasia 9,007 6,511 13,477 930 545 988
Total 121,847 93,327 204,438 15,724 11,979 26,933
Corporate and other (2,023) (1,815) (4,148)
Operating profit 13,701 10,164 22,785
Finance costs (2,816) (1,769) (4,196)
Investment income 1,336 989 2,410
Profit before tax 12,221 9,384 20,999
3 Seasonality of results
Our major markets are subject to some seasonality in demand and are particularly
impacted by the slowdown associated with the summer season in Europe.
Consequently our results are normally more heavily weighted to the second half.
Finance income and expense
4
Six Six
months months Year ended
ended 30 ended 30 31 March
Sept 2007 Sept 2006 2007
#000 #000 #000
Investment income
Interest on short-term deposits 390 120 654
Expected return on post-employment plan assets 946 869 1,756
1,336 989 2,410
Finance costs
Interest on loans and other borrowing 1,982 1,018 2,676
Interest on post-employment plan liabilities 834 751 1,520
2,816 1,769 4,196
5 Earnings per share
a) Basic and adjusted EPS
The reconciliation between basic and adjusted EPS, and between the earnings figures used in calculating them,
is as follows:
----------Earnings---------- ----------EPS---------- Earnings EPS
Six Six Six Six
months months months months Year ended Year ended
ended 30 ended 30 ended 30 ended 30 31 March 31 March
Sept 2007 Sept 2006 Sept 2007 Sept 2006 2007 2007
#000 #000 pence pence #000 pence
Basic 8,603 6,921 3.51 2.87 15,453 6.38
Amortisation of acquired
intangibles 934 98 - - 700 -
Related tax (65) - - - (86) -
Adjusted 9,472 7,019 3.86 2.91 16,067 6.63
b) Diluted EPS
Diluted EPS has been calculated based on the basic and adjusted earnings amounts above. The diluted basic and
adjusted earnings are set out below:
Six Six
months months Year ended
ended 30 ended 30 31 March
Sept 2007 Sept 2006 2007
pence pence pence
Diluted 3.45 2.81 6.29
Diluted adjusted 3.80 2.85 6.54
A reconciliation between the shares used in calculating basic and diluted EPS is as follows:
Six Six
months months Year ended
ended 30 ended 30 31 March
Sept 2007 Sept 2006 2007
#million #million #million
Average shares used in basic EPS calculation 245.3 241.3 242.3
Dilutive share options outstanding 4.1 4.7 3.4
Shares used in diluted EPS calculation 249.4 246.0 245.7
6 Taxation
Six months Six months
ended 30 ended 30 Year ended
Sept 2007 Sept 2006 31 March
#000 #000 2007
#000
Current tax:
UK Corporation tax at statutory rate 413 95 2
Foreign tax 3,525 2,556 7,141
Adjustment in respect of prior years (47) - (102)
3,891 2,651 7,041
Deferred taxation (273) (188) (1,495)
Total tax expense 3,618 2,463 5,546
Corporation tax for the interim period is charged at 28% (2006: 26%)
representing the best estimate of the weighted average annual corporation tax
rate to adjusted profit before tax expected for the financial year.
7 Dividends
Six months Six months
ended 30 ended 30 Year ended
Sept 2007 Sept 2006 31 March
#000 #000 2007
#000
Final 2007 - 1.70p per share paid 30 July 2007 4,166 - -
Interim 2007 - 1.30p per share paid 5 December 2006 - - 3,167
Final 2006 - 1.25p per share paid 1 August 2006 - 3,014 3,014
4,166 3,014 6,181
An interim dividend of #3,939,000 representing 1.60p per share will be paid on
5th December 2007 to shareholders on the register on 9th November 2007.
The trustees of the Chloride Group Employee Benefit Trust have waived their
rights to receive dividends. Accordingly the amounts shown above are net of any
dividends which might otherwise have accrued to the Trust.
Acquisition of subsidiaries
8
a) On 25 April 2007 the Company acquired the entire share capital of AST
Electronique Services SARL (ASTE), a company specialising in third party
maintenance focusing on the uninterruptible power supply (UPS) service market in
France, for a cash consideration of #1.9 million. The purchase has given rise
to acquisition goodwill of #0.8 million and other intangibles (customer lists)
of #0.4 million.
Fair value
Book value adjustments Fair value
Net assets acquired #000 #000 #000
Property plant and equipment 14 - 14
Other intangible assets - customer - 410 410
lists
Other Investments 8 (8) -
Inventories 106 (9) 97
Trade and other receivables 430 (12) 418
Cash and cash equivalents 640 - 640
Trade creditors and other payables (295) - (295)
Current taxation (22) - (22)
Deferred tax liability - (123) (123)
Provisions - (41) (41)
881 217 1,098
Goodwill 828
Total consideration 1,926
Satisfied by :
Cash 1,868
Directly attributable costs 58
1,926
Less: cash acquired (640)
Cash flow on acquisition 1,286
Goodwill substantially represents the expertise and technical knowledge of the
company's staff together with synergistic benefits.
ASTE contributed #0.7 million of revenue and #0.1 million to the Group's profit
before tax for the period between the date of acquisition and the balance sheet
date.
b) On 23 May 2007 the Company acquired the entire share capital of Ascor Power
Systems PTE Limited ('Ascor'), supplier of critical power protection services in
Singapore for a cash consideration of #1.2 million. The purchase has given rise
to acquisition goodwill of #0.9 million and other intangibles (customer lists)
of #0.3 million.
Fair value
Book value adjustments Fair value
Net assets acquired #000 #000 #000
Property plant and equipment 32 - 32
Other intangible assets - customer - 346 346
lists
Inventories 53 (7) 46
Trade and other receivables 559 (39) 520
Trade creditors and other payables (422) - (422)
Current taxation (5) - (5)
Debt within 1 year (42) - (42)
Deferred taxation liability - (85) (85)
Provisions - (42) (42)
175 173 348
Goodwill 883
Total consideration 1,231
Satisfied by :
Cash 1,168
Directly attributable costs 63
1,231
Add: Debt acquired 42
Cash flow on acquisition 1,273
Goodwill substantially represents the expertise and technical knowledge of the
company's staff together with synergistic benefits.
Ascor contributed #0.8 million of revenue and #0.1 million to the Group's profit
before tax for the period between the date of acquisition and the balance sheet
date.
If the acquisitions had been made on 1 April 2007, Group revenue would have been
#122.3 million and Group profit attributable to equity holders of the parent
would have been #8.7 million.
9 Property, plant and equipment and software
During the period the Company spent #1.5 million on property, plant and
equipment mainly in relation to expenditure on facilities and IT infrastructure,
and a further #0.6 million on software.
Interests in associate
10
On 3 July 2007 the Company purchased a further 10% of the share capital of DB
Power Electronics Private Ltd for #1.5 million. This purchase brings the our
holding in the company to 20% and as of that date it has been accounted for as
an Interest in associate as required under IAS 28 ('Investments in
associates'). The Company's share of the post-acquisition results for the half
year is not material.
Share capital
11
The #452,000 increase in the issued share capital of the Company is due to the
exercise of executive share options over a total of 1.8 million shares.
12 Reconciliation of net decrease in cash and cash equivalents to the movement in net debt
Six months Six months Year ended
ended 30 Ended 30 31 March
Sept 2007 Sept 2006 2007
#000 #000 #000
(Decrease)/ increase in cash and cash equivalents (5,227) 2,415 (1,065)
(Increase) in debt and lease financing (5,090) (157) (2,769)
(Increase)/decrease in net debt resulting from cash flows (10,317) 2,258 (3,834)
Foreign currency translation differences 319 (829) (515)
(Increase)/decrease in net debt during the period (9,998) 1,429 (4,349)
Net debt at the beginning of the period (21,274) (16,925) (16,925)
Net debt at the end of the period (31,272) (15,496) (21,274)
30 Sept 30 Sept 31 March
2007 2006 2007
#000 #000 #000
Net debt comprises:
Cash and cash equivalents 15,565 23,786 20,470
Bank overdrafts (171) (250) (485)
Bank and other loans (46,614) (38,974) (41,213)
Obligations under finance leases (52) (58) (46)
(31,272) (15,496) (21,274)
During the period the Company had core bank facilities of #85 million. These
facilities are for fixed terms of three years and the unexpired element of them
varies between 2 and 26 months. Agreement in principle has been reached to
renew and extend the facility which falls due within 2 months.
13 Reconciliation of shareholders' funds
Share Share Own Hedging Exchange Retained
Capital Premium Shares Reserve Reserve Earnings Total
#000 #000 #000 #000 #000 #000 #000
At 1 April 2006 62,248 3,014 (9,150) 199 1,592 69 57,972
Exchange rate adjustments - - - (254) (4,548) - (4,802)
Profit for the year - - - (78) - 6,921 6,843
Dividends paid - - - - - (3,014) (3,014)
Shares issued 3 1 - - - - 4
Movements in respect of own
shares - - 952 - - - 952
Share-based payments - - - - - 438 438
Actuarial loss - - - - - (473) (473)
Tax on items recognised in - - - - - 109 109
equity
At 30 September 2006 62,251 3,015 (8,198) (133) (2,956) 4,050 58,029
At 1 April 2007 63,090 3,882 (10,408) (33) (3,450) 11,021 64,102
Exchange rate adjustments - - - 152 2,147 - 2,299
Profit for the year - - - (70) - 8,603 8,533
Dividends paid - - - - - (4,166) (4,166)
Shares issued 452 498 - - - - 950
Movements in respect of own - - (920) - - (592) (1,512)
shares
Share-based payments - - - - - 613 613
Actuarial gain - - - - - 886 886
Tax on items recognised in - - - - - (354) (354)
equity
At 30 September 2007 63,542 4,380 (11,328) 49 (1,303) 16,011 71,351
14 Post balance sheet events
As set out in the Chief Executive's review, the Company increased its share
holding in DB Power Electronics Private Ltd to 32% and entered into an agreement
to set up a manufacturing joint venture in China with Phoenixtec Power Company
after the period end.
RESPONSIBILITY STATEMENT
We confirm that to the best of our knowledge:
* The condensed set of financial statements has been prepared in
accordance with IAS 34 as adopted by the European Union;
* The interim management report includes a fair review of the
information required by:
a) DTR 4.2.7R (indication of important events during the first six months
and description of principal risks and uncertainties for the remaining six
months of the year); and
b) DTR 4.2.8R (disclosure of related party transactions and changes
therein).
By order of the Board
Keith Hodgkinson Neil Warner
Chief Executive Group Finance Director
29 October 2007
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR FEAESASWSEES
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