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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Mtl Instruments | LSE:MTI | London | Ordinary Share | GB0005507768 | ORD 10P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 705.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:1394D MTL Instruments Group PLC 03 September 2007 3 September 2007 The MTL Instruments Group plc Interim Results for the six months ended 30 June 2007 The MTL Instruments Group plc is recognised as a world leader in the development and supply of Intrinsic Safety, Process Control and Surge Protection products aimed at the process control and telecommunications industries. Many of the world's safety-critical processes are monitored, controlled or protected by MTL products and the Group is distinguished by its global network of sales and support centres and by its acknowledged position as a thought leader in this high technology marketplace. MTL has developed solutions which enable process control systems to be devolved from the control room onto the process plant itself giving benefits of improved control, integrity and cost savings. This has involved the combination of the Group's four core technologies - Intrinsic Safety, Surge Protection, Visualisation and Open Control Platforms. Performance Summary #m 1H07 1H06 Growth Growth (at constant currency) -------------------------------------------------------------------------------- Orders 45.7 45.4 +1% +6% Sales 43.9 41.4 +6% +12% Profit before tax 4.1 3.6 +14% +35% Basic EPS* 14.0 12.6 +11% +31% Dividend per share (p) 3.2 2.9 +10% +10% Highlights *Hazardous Area - record order book in continuing strong market conditions *Surge Technologies - continued growth in Industrial through the MTL International Sales Channel *Corporate activity - the three acquisitions made to date this year will enhance expected organic growth *Dividend increased in line with earnings *Full year delivery remains on track Malcolm Coster, Chairman of The MTL Instruments Group plc, commented: "We are pleased to report good progress in the first half of 2007. Despite the continuing weakness in the US dollar which gives unfavourable comparisons with 2006, the strength of our end user markets together with our recently broadened product range should ensure further growth in the second half of the year." - Ends - For Further Information: Graeme Philp 01582 407250 Chief Executive, The MTL Instruments Group plc Terry Garrett / Stephanie Badjonat / Hannah Marwood 020 7067 0700 Weber Shandwick Financial Please see the company website: www.mtl-group.com Financial results We are pleased to report that the Group continued to make good progress, both financially and strategically, in the first half of 2007. Revenue and profit before tax for the period increased by 6% and 14% respectively despite the strong currency headwind particularly in relation to the weakness of the US dollar. At constant currency sales increased by 12% and profit before tax by 35%. Operating profit increased to #4.4m (#5.2m at constant currency) compared with #3.8m in the first half of 2006. First time contribution from RTK Instruments Limited and Elpro Technologies PTY accounted for #0.4m of this improvement. Operating review The strong level of investment in our main industrial markets has continued through the first half of 2007. This has enabled all of our businesses to make progress. In addition to the organic growth that has been achieved we have made three acquisitions, two of which have made a small contribution to the first half results. Project activity in our Hazardous Area business remained strong driven by continued investment particularly in the Oil and Gas industry. Sales grew by 18 % to #24.7m, and by 22% at constant currency. The sales growth will be enhanced in the second half of 2007 by the inclusion of our three new acquisitions. The Surge business had a strong first half with order intake up 12% to #7.8m, with growth at constant currency of 21%. This strong order growth enabled the business to carry forward, into the second half, a record order backlog of #2.6m. It is encouraging that much of this growth has come through the MTL sales channel and is an early tangible benefit of our investment in sales channel development. The MOST business also had strong order intake of #10.3m up 2%, and up 12% at constant currency. These reported numbers mask strong growth of the MATRIX/IO business, where order intake grew by 35%, and 46% at constant currency. Wonderware distribution order intake declined by 8%, due to the weakness of the US dollar, with the business growing at constant currency by 2%. Acquisitions In May 2007, MTL announced the acquisition of Elpro Technologies PTY, which is a well respected provider of wireless networking and telemetry equipment to the automation industry. Wireless instrumentation is a rapidly growing branch of the process control industry and many of our larger customers are looking to MTL to provide this technology in the future. RTK Instruments Limited has established a strong reputation as a provider of alarm handling equipment in industries such as power generation where MTL intends to strengthen its position. The acquisition of RTK announced in early July 2007 is a natural fit with the Group, with MTL equally enhancing RTK's access to key markets such as oil and gas and pharmaceutical. Ocean Technical Systems Limited was acquired towards the end of July 2007 and is a successful niche provider of tanker berthing equipment and sub-sea data acquisition in the oil and gas transportation industry. Its products are highly specialised and utilise hazardous area technology similar to MTL's core competence. The three acquisitions made in 2007 bring both operational and strategic benefits to the Group. The Company looks forward to updating the market on progress in due course. Dividend The interim dividend is to be increased by 10% to 3.2p, and will be payable on 12 October 2007 to all shareholders on the register as at 14 September 2007. Outlook Despite the continuing weakness in the US dollar which gives unfavourable comparisons with 2006, the strength of our end user markets together with our recently broadened product range should ensure further growth in the second half of the year. Malcolm Coster Chairman 3 September 2007 Independent auditors' review report Introduction We have been instructed by the company to review the financial information for the six months ended 30 June 2007 which comprises of the condensed consolidated income statement, the condensed consolidated statement of recognised income and expense, the condensed consolidated balance sheet, the condensed consolidated cash flow statement and the related notes. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. This report is made solely to the company in accordance with the terms of our engagement to assist the company in meeting the requirements of the Listing Rules of the Financial Services Authority. Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim report in accordance with the Listing Rules of the Financial Services Authority which require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where they are to be changed in the next annual accounts in which case any changes, and the reasons for them, are to be disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4: Review of interim financial information issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data and, based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of contents and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with International Statements on Auditing (UK and Ireland) and therefore provides a lower level of assurance than an audit. Accordingly, we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 30 June 2007. KPMG Audit Plc Chartered Accountants St Albans 3 September 2007 Condensed consolidated income statement - for the period ended 30 June 2007 Unaudited Six months ended 30 June 30 June 2007 2006 Note #000 #000 -------------------------------------------------------------------------------- Continuing operations Revenue 11 43,913 41,384 Cost of sales (24,056) (22,354) -------------------------------------------------------------------------------- Gross profit 19,857 19,030 Selling & marketing costs (9,837) (9,420) Administrative expenses (3,333) (3,380) Research, design and development costs (2,253) (2,445) -------------------------------------------------------------------------------- Operating profit 11 4,434 3,785 Financial income 63 49 Finance costs (304) (177) Financial income relating to pension liability 631 513 Finance costs relating to pension liability (686) (579) -------------------------------------------------------------------------------- Profit before tax 4,138 3,591 Tax - UK 3 (150) (191) Overseas tax (1,257) (980) -------------------------------------------------------------------------------- Profit for the period attributable to shareholders 2,731 2,420 -------------------------------------------------------------------------------- Earnings per share 4 From continuing operations Basic 14.0p 12.6p -------------------------------------------------------------------------------- Diluted 13.5p 12.4p -------------------------------------------------------------------------------- Condensed consolidated statement of recognised income and expense - for the period ended 30 June 2007 Unaudited Six months ended 30 June 30 June 2007 2006 #000 #000 -------------------------------------------------------------------------------- Gains on cash flow hedges 39 141 Exchange differences on translation of foreign operations 133 (155) Actuarial gains on defined benefit pension schemes 3,728 502 Tax on items taken directly to equity (1,205) (151) Transferred to profit and loss on cash flow hedges (7) (29) -------------------------------------------------------------------------------- Net income recognised directly in equity 2,688 308 -------------------------------------------------------------------------------- Profit for the period 2,731 2,420 -------------------------------------------------------------------------------- Total recognised income and expense for the period attributable to shareholders 5,419 2,728 -------------------------------------------------------------------------------- Condensed consolidated balance sheet - at 30 June 2007 Unaudited Audited Unaudited 30 June 31 December 30 June 2007 2006 2006 #000 #000 #000 -------------------------------------------------------------------------------- Note Non-current assets Goodwill 6 31,329 18,394 18,486 Other intangible assets 1,725 564 407 Property, plant and equipment 9,165 7,651 7,812 Deferred tax assets 3,086 3,986 3,421 -------------------------------------------------------------------------------- 45,305 30,595 30,126 -------------------------------------------------------------------------------- Current assets Inventories 12,446 10,906 10,185 Trade and other receivables 24,097 22,017 21,024 Current tax receivable 1,231 987 - Cash and cash equivalents 2,244 1,919 2,686 -------------------------------------------------------------------------------- 40,018 35,829 33,895 -------------------------------------------------------------------------------- Total assets 85,323 66,424 64,021 -------------------------------------------------------------------------------- Current liabilities Trade and other payables (14,598) (14,963) (11,740) Current tax liabilities (1,788) (1,258) (1,457) Provisions (1,679) (1,910) - Bank overdrafts and loans 7 (963) - (3,514) -------------------------------------------------------------------------------- (19,028) (18,131) (16,711) -------------------------------------------------------------------------------- Net current assets 20,990 17,698 17,184 -------------------------------------------------------------------------------- Non-current liabilities Other non-current payables (1,217) (1,217) (1,216) Deferred tax liabilities (1,347) (1,086) (787) Provisions (568) - (2,162) Bank overdrafts and loans 7 (16,000) - - Retirement benefit obligation (4,370) (8,005) (6,141) -------------------------------------------------------------------------------- (23,502) (10,308) (10,306) -------------------------------------------------------------------------------- Total liabilities (42,530) (28,439) (27,017) -------------------------------------------------------------------------------- Net assets 42,793 37,985 37,004 -------------------------------------------------------------------------------- 30 June 31 December 30 June 2007 2006 2006 #000 #000 #000 -------------------------------------------------------------------------------- Equity Share capital 8 1,946 1,946 1,925 Share premium account 3,742 3,742 3,296 Reserves 9 (788) (953) (89) Non-distributable reserve 9 332 188 170 Retained earnings 10 37,561 33,062 31,702 -------------------------------------------------------------------------------- Total equity attributable to shareholders 42,793 37,985 37,004 -------------------------------------------------------------------------------- Condensed consolidated cash flow statement - for the period ended 30 June 2007 Unaudited Six months ended 30 June 30 June 2007 2006 Note #000 #000 -------------------------------------------------------------------------------- Cash flow from operating activities Profit before taxation 4,138 3,591 Adjustments for: Depreciation of property, plant and equipment 639 584 Amortisation of intangible assets 135 36 (Gain) on disposal of property, plant and equipment (15) - Financial income (63) (49) Finance costs 304 177 Net finance costs relating to pension liabilities 55 66 Equity settled share-based transactions 140 124 -------------------------------------------------------------------------------- 5,333 4,529 (Increase) in trade and other receivables (734) (2,280) Decrease/(Increase) in inventories 128 (242) (Decrease)/increase in trade and other payables, pension reserve and provisions (2,318) (1,392) Fair value of currency exchange contracts (39) (141) -------------------------------------------------------------------------------- Cash generated from operations 2,370 474 Interest paid (177) (177) Income taxes paid (1,201) (1,875) -------------------------------------------------------------------------------- Net cash from operating activities 992 (1,578) -------------------------------------------------------------------------------- Interest received 63 49 Purchases of property, plant and equipment (1,077) (777) Expenditure on product development (488) (210) Acquisition of subsidiaries 6 (15,396) - -------------------------------------------------------------------------------- Net cash used in investing activities (16,898) (938) -------------------------------------------------------------------------------- Cash flows from financing activities Dividends paid (895) (827) Issue of share capital - 59 New loans 7 16,963 - Repayments of borrowings - (280) -------------------------------------------------------------------------------- Net cash used in financing activities 16,068 (1,048) -------------------------------------------------------------------------------- Net increase/(decrease) in cash and cash equivalents 162 (3,564) Effect of foreign exchange rate changes 163 531 Cash and cash equivalents at 1 January 1,919 5,719 -------------------------------------------------------------------------------- Cash and cash equivalents at 30 June 2,244 2,686 -------------------------------------------------------------------------------- Notes to the condensed consolidated financial statements - for the period ended 30 June 2007 1 Basis of preparation These interim condensed consolidated financial statements of The MTL Instruments Group plc are for the six months ended 30 June 2007 and comprises the Company and its subsidiaries (together referred to as the 'Group'). The information included within this document has been prepared on the basis of the recognition and measurement requirements of IFRS and IFRIC interpretations in issue that are endorsed by the European Commission and effective (or available for early adoption) at 30 June 2007. The results for each half year are unaudited. The comparative figures for the year to 31 December2006 have been abridged from the Group's financial statements for that year, which have been delivered to the Registrar of Companies. The auditors have reported on those financial statements; their report was unqualified, did not include a reference to any matters which the auditors drew attention by way of emphasis without qualifying their report and did not contain statements under section 237(2) or (3) of the Companies Act 1985. 2 Significant accounting policies These financial statements should be read in conjunction with the Group's Annual Report and Accounts 2006 and have been prepared using the accounting policies set out in that report. These policies have been consistently applied to all the periods presented. 3 Tax Interim period income tax is accrued based on the estimated average annual effective income tax rate of 34% (6 months ended 30 June 2006: 33%). 4 Earnings per share From continuing and discontinued operations The calculation of the basic and diluted earnings per share is based on the following data: Earnings Six months ended 30 June 30 June 2007 2006 #000 #000 -------------------------------------------------------------------------------- Earnings for the purposes of basic earnings per share being net profit attributable to equity holders of the parent 2,731 2,420 -------------------------------------------------------------------------------- Earnings for the purposes of diluted earnings per share 2,731 2,420 -------------------------------------------------------------------------------- Number of shares 30 June 30 June 2007 2006 Number Number Weighted average number of ordinary shares for the purposes of basic earnings per share 19,455,277 19,232,275 -------------------------------------------------------------------------------- Effect of dilutive potential ordinary shares: Share options 721,376 348,481 -------------------------------------------------------------------------------- Weighted average number of ordinary shares for the purposes of diluted earnings per share 20,176,653 19,580,756 -------------------------------------------------------------------------------- 5 Dividends During the interim period, a dividend of 4.6p (2006: 4.3p) per share was paid to the shareholders. Interim dividends are only recognised in the financial statements when paid. The interim dividend will increase to 3.2p (2006: 2.9p) and will be payable on 12 October 2007 to all shareholders registered as at 14 September 2007. 6 Goodwill Elpro International PTY Ltd On 17 May 2007, the Group acquired 100% of the issued share capital of Elpro International PTY Ltd for cash consideration of #12million. Elpro is a developer and supplier of wireless solutions, for applications in the process control, manufacturing and utility markets. This transaction has been accounted for by the purchase method of accounting. From the date of acquisition to 30 June 2007 contribution (profit after tax) to the Group was #134,000. RTK Instruments Ltd On 31 May 2007, the Group acquired 90% of the issued share capital of RTK Instruments Ltd for cash consideration of #3.7million. RTK are specialists in the design and manufacture of process alarm equipment, displays and interface products. This transaction has been accounted for by the purchase method of accounting. A put and call option has been agreed for the Group to purchase the 10% minority interest. From the date of acquisition to 30 June 2007 contribution (profit after tax) to the Group was #112,000. 7 Borrowings A bank loan of #10,000,000 was taken out on 15 May 2007 and at the period end #10,000,000 was outstanding. Quarterly repayments of #250,000 commence on 30 September 2007 and continue until 31 March 2012 with a final repayment of #5,250,000 due on 30 June 2012. Interest is charged at a variable rate between 0.75% to 1.25% above LIBOR per annum. The interest rate varies according to an agreed formula based on a comparison of net debt to EBITDA. A revolving loan of #7,000,000 was taken out on 10 May 2007 and at the period end #7,000,000 was outstanding. Interest is charged at a variable rate between 0.75% to 1.25% above LIBOR per annum. The interest rate varies according to an agreed formula based on a comparison of net debt to EBITDA. The limit of the revolving loan is #8,000,000 and runs for three years to 17 May 2010. The bank loans are secured by debentures and company guarantees. Analysis of debt: 2007 2006 Debt can be analysed as falling due: #000 #000 -------------------------------------------------------------------------------- In less than one year 1,000 - Between one and two years 1,000 - Between two and five years 15,000 - -------------------------------------------------------------------------------- 17,000 - Less issue costs (37) - -------------------------------------------------------------------------------- Net debt 16,963 - -------------------------------------------------------------------------------- 8 Share capital The number of shares allotted, called up and fully paid as at 30 June 2007 was 19,455,277 (2006: 19,455,277). No shares were issued in the period. 9 Reserves -------------------------------------------------------------------------------- Non-distributable Hedging Translation Reserve Reserve Reserve Total #000 #000 #000 #000 -------------------------------------------------------------------------------- Balance at 1 January 2006 119 (72) 26 73 Exchange differences on translation of overseas operations - - (155) (155) Unreceived gain on tax of share options 51 - - 51 Increase in fair value of hedging derivatives - 141 - 141 Transfer to income statement - (29) - (29) -------------------------------------------------------------------------------- Balance at 30 June 2006 170 40 (129) 81 -------------------------------------------------------------------------------- Exchange differences on translation of overseas operations - - (804) (804) Unreceived gain on tax of share options 18 - - 18 Increase in fair value of hedging derivatives - 55 - 55 Transfer to income statement - (115) - (115) -------------------------------------------------------------------------------- Balance at 1 January 2007 188 (20) (933) (765) -------------------------------------------------------------------------------- Exchange differences on translation of overseas operations - - 133 133 Unreceived gain on tax of share options 144 - - 144 Increase in fair value of hedging derivatives - 39 - 39 Transfer to income statement - (7) - (7) -------------------------------------------------------------------------------- Balance at 30 June 2007 332 12 (800) (456) -------------------------------------------------------------------------------- 10 Retained earnings #000 -------------------------------------------------------------------------------- Balance at 1 January 2006 29,634 Net profit for the period 2,420 Dividends paid (827) Pension scheme net actuarial losses 351 Share options expensed 124 -------------------------------------------------------------------------------- Balance at 30 June 2006 31,702 -------------------------------------------------------------------------------- Net profit for the period 3,114 Dividends paid (558) Pension scheme net actuarial losses (1,249) Share options expensed 53 -------------------------------------------------------------------------------- Balance at 1 January 2007 33,062 -------------------------------------------------------------------------------- Net profit for the period 2,731 Dividends paid (895) Pension scheme net actuarial gains 2,523 Share options expensed 140 -------------------------------------------------------------------------------- Balance at 30 June 2007 37,561 -------------------------------------------------------------------------------- 11 Segment information The following is an analysis of the revenue and results for the period analysed by business segment, which is the Group's primary basis of segmentation. The Group comprises the following business segments: Hazardous Area - the design, manufacture and sale of IS interfaces, remote I/O, displays and fieldbus components. MOST (MTL Open System Technologies) - the design, manufacture and sale of open control platforms and remote I/O products, and the resale of Wonderware HMI visualisation software. Surge - the design, manufacture and sale of surge protection equipment. Visualisation - the design, manufacture and sale of visualisation PC terminals and embedded PC's. Gas - the design, manufacture and sale of gas analysis equipment. Revenue from external customers Segment result Six months ended Six months ended 30 June 30 June 30 June 30 June 2007 2006 2007 2006 #000 #000 #000 #000 -------------------------------------------------------------------------------- Hazardous Area 24,661 20,921 4,498 3,280 MOST 9,638 10,540 22 78 Surge 5,527 6,003 772 1,068 Visualisation 2,837 2,926 349 565 Gas 1,250 994 178 150 -------------------------------------------------------------------------------- 43,913 41,384 5,819 5,141 Unallocated corporate expenses (1,385) (1,356) -------------------------------------------------------------------------------- Operating profit 4,434 3,785 -------------------------------------------------------------------------------- 12 Post balance sheet events On 9 July 2007, the Group acquired Ocean Technical systems Ltd ('OTS') for #3.0 million in cash. OTS is a UK-based specialist in SCADA (Supervisory control and Data Acquisition) solutions for the oil and gas industries. This information is provided by RNS The company news service from the London Stock Exchange END IR PBMRTMMTJBPR
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