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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Elektron Technology Plc | LSE:EKT | London | Ordinary Share | GB00B0C5RG72 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 53.50 | 53.00 | 54.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMEKT
RNS Number : 1807B
Elektron Technology PLC
19 September 2018
19 September 2018
Elektron Technology plc
Half year results for the six months ended 31 July 2018
Elektron Technology plc (AIM: EKT, "Elektron" or the "Group"), the global technology group, has published its results for the six months ended 31 July 2018 ("H1 FY19" or the "Period")
Performance*
-- Group revenue: GBP15.9m (up 17%) (H1 FY18: GBP13.6m) -- Bulgin revenues up 14%; Checkit revenues up 146%; EET revenues up 33% -- Operating profit (including Checkit) of GBP1.4m (H1 FY18: GBP0.5m), up 180% -- Operating profit from businesses excluding Checkit: GBP3.6m (up 29%) (H1 FY18: GBP2.8m) -- Checkit losses lower at GBP2.2m (H1 FY18: GBP2.3m) -- EET returned to breakeven
-- Sale of Queensgate Nano for initial consideration of GBP0.8m with up to a further GBP0.8m deferred consideration based on Queensgate Nano revenue performance of which GBP0.1m has been received since end of July
-- Net cash balances at GBP6.8m (31 July 2017: GBP2.1m; 31 January 2018: GBP5.2m) -- Positive outlook for H2 and beyond * Figures for continuing operations, except where otherwise stated.
John Wilson, Chief Executive Officer of Elektron, said:
"Strong double digit sales growth during the first half of the year is representative of the continuing multi-year transformation of our business. The Board retains its positive outlook for the medium to long term prospects of the Group."
For further information:
Hot Features
Premium
+44 (0) 1223
Elektron Technology plc 371 000
www.elektron-technology.com
John Wilson (Chief Executive Officer)
Andrew Weatherstone (Chief Financial
Officer & Company Secretary)
N+1 Singer (Nominated Adviser & Broker)
Shaun Dobson / Jen Boorer (Corporate +44 (0) 20 7496
Finance) 3000
Rachel Hayes (Corporate Broking)
The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.
Notes to Editors:
Elektron conceives, designs and markets innovative products and services for business that connect, monitor and control. We have a multi skilled team of engineers, software and product line specialists based in Cambridge focused on the opportunities created by global growth in the following areas:
- Demand for ubiquitous power and data: Bulgin
- Real-time operations management using Internet of Things (IoT) technology: Checkit
- Screening for the effects of ageing on sight: Elektron Eye Technology
Chairman and Chief Executive Officer's statement
Overview
The Group's improved performance during the first six months of the year represents a continuation of the strong performance delivered in the last financial year as part of the multi-year transformation of the Elektron Group. Bulgin continues to deliver organic sales growth, with class-leading margins, Checkit sales have more than doubled as the business has transitioned from start-up to scale-up mode and EET has eliminated its trading losses through sales growth.
Group EBITDA increased by 63% to GBP2.6m (H1 FY18: GBP1.6m), resulting in a near threefold increase in operating profit to GBP1.4m (H1 FY18: GBP0.5m). Following the sale of Queensgate shortly after the year end, which generated GBP0.8m of cash proceeds, and strong operating cash flow, the net cash position improved to GBP6.8m from GBP5.2m at 31 January 2018 (H1 FY18:GBP2.1m).
As a result of the sale of Queensgate, and Sheen in the prior year, the Group was carrying around GBP0.5m of excess overhead at the start of the year. During the first half a headcount reduction initiative was implemented and completed to remove this overhead, the benefit of which will be felt in the second half and going forward.
Bulgin
Bulgin designs and manufactures niche, ruggedised products used in harsh environments in which a high degree of ingress protection is required.
The first half of FY19 saw Bulgin sales of GBP14.3m, an increase of 14.4% over the prior year (H1 FY18: GBP12.5m), and record order intake levels which were 10% higher than the previous year, which was in itself up 20% over FY17. The increase in sales and orders has been driven through successful implementation of Bulgin's growth strategy, with the Board expecting full year revenues to remain ahead of last year.
Bulgin has again achieved underlying margin improvement, with net operating margin of 25% (H1 FY18: 24%), benefiting from an operational gearing effect which also served to push up gross margin to 47% (H1 FY18: 46%). In the period Bulgin experienced unprecedented demand for a number of products outstripping capacity and necessitating a short-term outsourcing initiative in Tunisia. Capacity in our Tunis facility is currently being increased through a combination of additional labour capacity and modest investment in machinery. This will serve to improve margins further in the medium to long term. ROCE for Bulgin has increased to in excess of 150%.
In April, Bulgin announced a distribution partnership with Arrow Electronics Inc, the world's largest electronic component distributor. Initial stocking orders of over $0.7m were received during H1 and these were delivered to Arrow in the first two months of the second half.
Bulgin now operates in a relatively cost-insensitive market and, whilst subject to distributor stocking and destocking cycles, has increased the number of end users during the last three years at a rate of 5% CAGR. The number of end users is estimated to be in excess of 80,000. This has been achieved through a fourfold increase in addressable market during that period as a result of new product launches and supplemented by:
-- expansion and optimisation of the distribution channel; -- substantially improved marketing collateral and product videos; and -- incentivisation of the distribution sales force.
To facilitate further growth, by increasing the number of end users and adoption of a higher proportion of Bulgin's product portfolio by these end users, Bulgin has an aggressive rolling 24-month roadmap, with a target of eight to ten new product launches per year.
Bulgin has launched five new products during H1 FY19:
-- 4000 series fibre connector - features a quick-turn coupling mechanism perfect for data applications across a wide variety of markets requiring fast, dustproof and watertight data through fibre connections;
-- Cat 6 ethernet connector - a gold standard waterproof circular connector for use in a wide variety of end markets from general industrial through to marine;
-- X-Code M-series connector range - has a high degree of mechanical and electrical stability providing a cost effective and flexible connectivity solution across a wide spectrum of industries;
-- "Smart" programmable connector - a connector with memory, designed initially for the Agtech industry, but has a broad range of industrial uses; and
-- 4000 series pole extension range- a compact and versatile connector suited to harsh environments where space is at a premium.
Historically, Bulgin's core market has been one of low growth and low profitability. The strategic transformation of the Bulgin business has been designed to focus on exploiting growth markets through innovative new products to unlock higher levels of sales and margin growth. The results for H1 FY19 demonstrate the continued successful execution of this.
Checkit
Checkit revenues increased to GBP0.4m, up 146% over the prior year, in line with the Board's expectations. Losses of GBP2.2m were also in line with expectations, and were lower than prior year (H1 FY18: GBP2.3m). Cash expenditure was GBP1.8m (H1 FY18: GBP1.7m), which includes capitalised development costs of GBP0.5m (H1 FY18: GBP0.3m). The increase in cash spend was a result of accelerating product development highlighted in the section below.
Contracted annualised recurring revenues at 31 July were GBP1.1m (31 July 2017: GBP0.5m), an increase of 120%.
Checkit provides real-time operations management for businesses that need to ensure reliable, efficient performance of front-line and field-based staff involved in service provision. This is an area where the adoption of technology has been generally slow to date. Checkit has the opportunity to seize a first mover advantage in its nascent market which is currently occupied by a large number of small players offering a variety of overlapping but non-identical niche services. Checkit aims to be a comprehensive operational system with an ambitious product roadmap (as set out further below).
Unlike paper-based checklists (which are still the norm in many service-based businesses), Checkit ensures the efficient execution of activities, providing top to bottom visibility of work as it happens.
In contrast to existing workflow and process management technologies, Checkit rapidly creates easy to use applications for those staff who are focused on scheduling and managing work together with the capability to integrate with sensors and the environment.
The result for customers is improved business performance through:
-- Revenue - from consistently delivering intended service experience and freeing up time to focus on customers.
-- Productivity - from automation and streamlining of front-line work and improving management efficiency.
-- Risk - from improved compliance, enforcement and visibility.
Market development
Since launch, Checkit's go-to-market focus has been on food service, initially in the UK, with customers including Center Parcs, Claridge's, Compass, Dishoom, George's Tradition, Jamie's Italian, John Lewis, Merlin Entertainments and Sodexo. The strategy has focused on adoption by large/medium sized organisations with multiple sites, where Checkit's focus on operational consistency and visibility delivers value. This trend is continuing, with pilots signed up in a range of major national retail and fast food franchise organisations.
Checkit has also developed a strong offering for smaller food service businesses to digitise the management of their food safety and other key management tasks. We have recently entered an arrangement to better access this segment of the market through a partnership with Just Eat, whereby Just Eat will promote Checkit to its 20,000+ UK partners. We are progressing streamlining the process to permit sign-up of these businesses through the use of eCommerce.
Checkit's vision extends well beyond food, to anywhere that people need to perform regular checks, tasks and workflows. Regular room and facilities checks form a significant additional opportunity. We have recently started a pilot roll-out in a major UK hotel chain to support quality and operational assurance. We estimate that the global hotel chain opportunity for this kind of activity represents a further GBP400m annual opportunity and the facilities management sector at least another GBP300m in the UK and US alone.
Adoption of the product within large national and multinational companies normally follows a three stage process and each stage may take up to 6 months:
Stage 1: Single site pilot
Stage 2: Up to 10 sites pilot
Stage 3: Full roll out
In addition to the Stage 1 opportunity with the hotel chain mentioned above Checkit currently has Stage 1 pilots planned with a major UK supermarket, a multinational petrol station chain and a global pharmaceutical company.
Checkit has accelerated its US launch with business development activities underway and a number of promising projects in discussion. The Board estimates that the UK and US food service markets together represent a potential market of GBP1.2 billion annually, with the US representing GBP1 billion of this. Additionally we are seeing interest from mainland Europe, with potential projects identified in France and Germany.
Checkit product development
Checkit continues to invest in its products on initiatives that support market development and respond to customer feedback. The sea change this year is the creation of a new version of our Work Management app that will run on a wider range of devices and provide enhanced check types and workflow capabilities. This is currently undergoing beta trials. When fully launched the new Checkit system will be able to operate externally (i.e. it will not need to be located within buildings that are equipped with wifi). As a result its market will expand substantially. We are currently engaged in a market sizing exercise.
Other key developments that support these initiatives this year are:
- Internationalisation of software and hardware to support global expansion;
- Development of out-of-the-box KPIs for businesses using Checkit Operational Intelligence dashboards to improve visibility and analysis for management;
- Location based capabilities to support applications beyond the kitchen in facilities and hotel management; and
- Enhancements to sensor network hardware to simplify installation, reduce hardware requirements for customer sites and improve remote support.
Checkit is continually capturing large quantities of data. Our strategy is to look for ways to leverage that data set, our industry knowledge and AI technologies to develop insights and added value services that will further improve efficiency and business insights for our clients. Examples of R&D topics include recognising performance issues with different types of equipment and predicting failures, identifying unusual and potentially problematic or even fraudulent user behaviour, and predicting future unit performance and business issues early.
Planning has already started for the next phase of the product roadmap which next year will bring many further new exciting features for the benefit of our growing base of existing and prospective customers.
Elektron Eye Technology (EET)
A strong H1 performance for EET resulted in sales of GBP1.2m; an increase of 33% over the prior year (H1 FY18: GBP0.9m) helped by a much improved distribution channel and the pulling forward of scheduled orders by a large distributor. It is expected that year to date performance, combined with a strong order book, will result in full-year growth over the prior year (although the second half is not expected to be as strong as first half performance), as the benefit of management changes made in H1 FY18 begin to take effect. Sales growth and lower overhead have resulted in the elimination of losses in EET.
As previously reported, new leadership has focused on the professionalising of sales and marketing activity over the last twelve months. This has enabled the steady expansion of the distribution channel with new partners signed up in France (Henson) and Australia (MPS II) during the period. In addition, registration of the Henson 9000 product has now been achieved in Brazil, as interest in the product increases in Latin America, whilst relationships are also being built with China, a market in which the MPS II has particular potential as a sales enablement tool for businesses in the fast-growing vitamins, minerals and nutritional herbal supplements (VMHS) space.
Alongside this strategic channel expansion programme, EET is working on further enhancing the clinical reputation of its products. The Henson 9000 has been a market leader in the UK since its release in 2014 where it dominates the optometry sector. Its use in research studies at Manchester Royal Eye Hospital and in a multi-centre project in India, both set up this year, will serve to strengthen its reputation internationally and support our partners' sales activities as the business continues its drive for greater market share away from its home market.
Brexit
The Group's established Brexit Committee continues to monitor developments in respect of the ongoing Brexit negotiations. As a precautionary measure it is evaluating a number of contingency plans in respect of its logistics and supply chain in consultation with its customers and suppliers in the event of a 'no deal' Brexit.
Outlook
The second half of the year has started well, in line with the Board's expectations. Bulgin maintains record levels of order intake driven by end customer demand. Checkit has a strong UK pipeline and has been launched in the US, ahead of plan. In addition, EET continues to outpace the prior year. The Board retains its positive outlook for the second half and in delivering results in line with recently upgraded market expectations for the full year. The medium and long-term indicators and prospects of the Group remain positive.
Keith Daley
Chairman
John Wilson
Chief Executive Officer
18 September 2018
Consolidated statement of comprehensive income
unaudited interim results to 31 July 2018
Unaudited Restated*
Half Unaudited
year Half year Audited
to to Year to
31 July 31 July 31 January
2018 2017 2018
GBPm GBPm GBPm
---------------------------------------------------- --------- ---------- -----------
Revenue (Note 2) 15.9 13.6 29.8
Cost of sales (8.5) (7.5) (15.0)
---------------------------------------------------- --------- ---------- -----------
Gross profit 7.4 6.1 14.8
Operating expenses
---------------------------------------------------- --------- ---------- -----------
Net operating expenses (excluding non-recurring
or special items) (6.0) (5.6) (12.3)
Operating profit before non-recurring or
special items (Note 2) 1.4 0.5 2.5
Non-recurring or special items (Note 3) - - 0.1
---------------------------------------------------- --------- ---------- -----------
Total operating expenses (6.0) (5.6) (12.2)
---------------------------------------------------- --------- ---------- -----------
Operating profit (Note 2) 1.4 0.5 2.6
Finance income - 0.1 0.1
---------------------------------------------------- --------- ---------- -----------
Profit before taxation 1.4 0.6 2.7
Taxation (Note 4) (0.3) (0.2) (0.8)
---------------------------------------------------- --------- ---------- -----------
Profit from continuing operations 1.1 0.4 1.9
Loss from discontinued operations (Note
5) (0.1) (0.3) (0.1)
---------------------------------------------------- --------- ---------- -----------
Profit for the period attributable to equity
shareholders 1.0 0.1 1.8 ---------------------------------------------------- --------- ---------- ----------- Other comprehensive expense Currency translation differences on foreign currency net investments - (0.8) (1.1) ---------------------------------------------------- --------- ---------- ----------- Total other comprehensive expense - (0.8) (1.1) ---------------------------------------------------- --------- ---------- ----------- Total comprehensive income/(expense) for the period attributable to equity shareholders 1.0 (0.7) 0.7 ---------------------------------------------------- --------- ---------- ----------- Earnings per share from continuing operations (Note 6) - Basic EPS 0.6p 0.2p 1.1p - Diluted EPS 0.6p 0.2p 1.0p Earnings per share from adjusted profits from continuing operations before non-recurring or special items (Note 6) - Basic and diluted EPS 0.6p 0.2p 1.0p - Adjusted and diluted adjusted EPS 0.6p 0.2p 1.0p ---------------------------------------------------- --------- ---------- -----------
The accompanying notes form an integral part of this consolidated interim financial information.
*See Note 5.
Consolidated balance sheet
unaudited at 31 July 2018
Unaudited Unaudited Audited
31 July 31 July 31 January
2018 2017 2018
GBPm GBPm GBPm
-------------------------------------- --------- --------- -----------
Assets
Non-current assets
Capitalised development costs 2.5 3.3 2.8
Other intangible assets 0.3 0.5 0.4
Property, plant and equipment 1.5 1.9 1.5
-------------------------------------- --------- --------- -----------
Total non-current assets 4.3 5.7 4.7
-------------------------------------- --------- --------- -----------
Current assets
Inventories 4.0 4.6 4.0
Trade and other receivables 5.1 4.4 4.5
Asset held for sale - - 0.8
Deferred tax asset 0.6 0.9 0.6
Cash and cash equivalents 6.8 2.1 5.2
-------------------------------------- --------- --------- -----------
Total current assets 16.5 12.0 15.1
-------------------------------------- --------- --------- -----------
Total assets 20.8 17.7 19.8
-------------------------------------- --------- --------- -----------
Current liabilities
Trade and other payables 5.9 4.7 6.2
Borrowings - 0.1 -
Provisions 0.2 0.6 0.2
Current tax payable 0.5 0.3 0.2
-------------------------------------- --------- --------- -----------
Total current liabilities 6.6 5.7 6.6
-------------------------------------- --------- --------- -----------
Non-current liabilities
Long-term provisions 0.3 0.5 0.3
-------------------------------------- --------- --------- -----------
Total non-current liabilities 0.3 0.5 0.3
-------------------------------------- --------- --------- -----------
Total liabilities 6.9 6.2 6.9
-------------------------------------- --------- --------- -----------
Net assets 13.9 11.5 12.9
-------------------------------------- --------- --------- -----------
Equity attributable to equity holders
of the parent
Called-up share capital 9.3 9.3 9.3
Share premium 5.4 5.4 5.4
Merger reserve 1.1 1.1 1.1
Capital redemption reserve 0.2 0.2 0.2
Own shares (1.9) (1.9) (1.9)
Other reserves 0.8 0.8 0.8
Translation reserve (1.5) (1.2) (1.5)
Retained earnings 0.5 (2.2) (0.5)
-------------------------------------- --------- --------- -----------
Total equity 13.9 11.5 12.9
-------------------------------------- --------- --------- -----------
The accompanying notes form an integral part of this consolidated interim financial information.
Consolidated statement of changes in equity
unaudited interim results to 31 July 2018
Capital
Share Share Merger redemption Own Other Translation Retained
capital premium reserve reserve shares reserves reserve earnings Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
--------------------- -------- -------- -------- ----------- ------- --------- ----------- --------- -----
At 1 February
2017 9.3 5.4 1.1 0.2 (1.9) 0.8 (0.4) (2.3) 12.2
Profit for the
period - - - - - - - 0.1 0.1
Currency translation
differences on
foreign currency
net investments - - - - - - (0.8) - (0.8)
--------------------- -------- -------- -------- ----------- ------- --------- ----------- --------- -----
Total comprehensive
(expense)/income
for the period - - - - - - (0.8) 0.1 (0.7)
--------------------- -------- -------- -------- ----------- ------- --------- ----------- --------- -----
At 31 July 2017 9.3 5.4 1.1 0.2 (1.9) 0.8 (1.2) (2.2) 11.5
Profit for the
period - - - - - - - 1.7 1.7
Currency translation
differences on
foreign currency
net investments - - - - - - (0.3) - (0.3)
--------------------- -------- -------- -------- ----------- ------- --------- ----------- --------- -----
Total comprehensive
(expense)/income
for the period - - - - - - (0.3) 1.7 1.4
--------------------- -------- -------- -------- ----------- ------- --------- ----------- --------- -----
At 1 February
2018 9.3 5.4 1.1 0.2 (1.9) 0.8 (1.5) (0.5) 12.9
Profit for the
period - - - - - - - 1.0 1.0
Currency translation
differences on
foreign currency
net investments - - - - - - - - -
--------------------- -------- -------- -------- ----------- ------- --------- ----------- --------- -----
Total comprehensive
income for the
period - - - - - - - 1.0 1.0
--------------------- -------- -------- -------- ----------- ------- --------- ----------- --------- -----
At 31 July 2018 9.3 5.4 1.1 0.2 (1.9) 0.8 (1.5) 0.5 13.9
--------------------- -------- -------- -------- ----------- ------- --------- ----------- --------- -----
The own shares are held by the Elektron Technology 2012 Employee Benefit Trust.
The accompanying notes form an integral part of this consolidated interim financial information.
Consolidated statement of cash flows
unaudited interim results to 31 July 2018
Unaudited Unaudited
Half year Half year Audited
to to Year to
31 July 31 July 31 January
2018 2017 2018
GBPm GBPm GBPm
--------------------------------------------------- ---------- ---------- -----------
Net cash flows from operating activities
Profit/(loss) before taxation
- From continuing operations 1.4 0.6 2.7
- From discontinued operations (0.1) (0.4) (0.3)
Adjustments for:
Depreciation charge 0.2 0.2 0.5
Finance income - (0.1) (0.1)
Amortisation of capitalised development
costs and other intangibles 1.0 1.0 2.2 Loss/(gain) on disposal of discontinued operations 0.1 0.1 (0.6) --------------------------------------------------- ---------- ---------- ----------- Operating cash flows before working capital changes and non-recurring or special items 2.6 1.4 4.4 (Increase)/decrease in trade and other receivables (0.6) 2.6 2.1 Increase in inventories - (0.3) (0.8) Decrease in trade payables (0.3) (2.2) (0.5) Operating cash flow after working capital changes 1.7 1.5 5.2 Decrease in provisions - (0.4) (1.0) --------------------------------------------------- ---------- ---------- ----------- Cash generated from operations 1.7 1.1 4.2 Tax paid - (0.1) (0.2) Interest received - 0.1 0.1 --------------------------------------------------- ---------- ---------- ----------- Net cash generated from operating activities 1.7 1.1 4.1 --------------------------------------------------- ---------- ---------- ----------- Net cash flows from investing activities Purchase of property, plant and equipment (0.2) (0.3) (0.4) Purchase of intellectual property - (0.2) (0.4) Capitalisation of development costs (0.7) (0.4) (1.1) Disposal of business 0.8 0.8 2.0 --------------------------------------------------- ---------- ---------- ----------- Net cash (used in)/generated from investing activities (0.1) (0.1) 0.1 --------------------------------------------------- ---------- ---------- ----------- Net cash flows from financing activities Decrease in bank loans - (1.4) (1.5) Net cash used in financing activities - (1.4) (1.5) --------------------------------------------------- ---------- ---------- ----------- Net increase/(decrease) in cash and cash equivalents 1.6 (0.4) 2.7 Cash and cash equivalents at the beginning of the period 5.2 2.5 2.5 --------------------------------------------------- ---------- ---------- ----------- Cash and cash equivalents at the end of the period 6.8 2.1 5.2 --------------------------------------------------- ---------- ---------- -----------
The accompanying notes form an integral part of this consolidated interim financial information.
Notes to the unaudited interim results
to 31 July 2018
1. Accounting policies
The interim financial information has been prepared on the basis of International Financial Reporting Standards (IFRS) as adopted by the European Union. Full details of accounting policies are included in the Annual Report for the year ended 31 January 2018. Fixed annual charges are apportioned to the interim period on the basis of time elapsed. Other expenses are accrued in accordance with the same principles used in the preparation of the annual accounts.
The Group has not applied IAS 34 "Interim Financial Reporting", which is not mandatory for UK groups, in the preparation of these interim financial statements.
2. Segmental reporting - continuing operations
Revenues
Half year Half year
to to Year to
31 July 31 July 31 January
2018 2017 2018
Geographic GBPm GBPm GBPm
--------------------------------------- --------- --------- -----------
United Kingdom 5.7 5.2 10.7
Rest of Europe, Middle East and Africa 4.8 3.7 8.1
Asia Pacific and China 1.3 1.0 2.4
Americas 4.1 3.7 8.6
--------------------------------------- --------- --------- -----------
Total 15.9 13.6 29.8
--------------------------------------- --------- --------- -----------
Half year Half year
to to Year to
31 July 31 July 31 January
2018 2017 2018
Product segment GBPm GBPm GBPm
---------------- --------- --------- -----------
Bulgin 14.3 12.5 27.3
Checkit 0.4 0.2 0.5
EET 1.2 0.9 2.0
---------------- --------- --------- -----------
Total 15.9 13.6 29.8
---------------- --------- --------- -----------
Operating profit/(loss) before non-recurring or special items
Half year Half year
to to Year to
31 July 31 July 31 January
2018 2017 2018
Product segment GBPm GBPm GBPm
---------------- ---------- --------- -----------
Bulgin 3.6 3.0 7.2
Checkit (2.2) (2.3) (4.4)
EET - (0.2) (0.3)
----------------- --------- --------- -------------
Total 1.4 0.5 2.5
----------------- --------- --------- -------------
Operating profit/(loss)
Half year Half year
to to Year to
31 July 31 July 31 January
2018 2017 2018
Product segment GBPm GBPm GBPm
---------------- ---------- --------- -----------
Bulgin 3.6 3.0 7.2
Checkit (2.2) (2.3) (4.4)
EET - (0.2) (0.2)
----------------- --------- --------- -------------
Total 1.4 0.5 2.6
----------------- --------- --------- -------------
3. Non-recurring or special items
Non-recurring or special items are disclosed separately to improve visibility of the underlying business performance.
Management has defined such items as restructuring, site closure costs, acquisition costs and other non-recurring items incurred outside the normal course of business.
Half year Half year
to to Year to
31 July 31 July 31 January
2018 2017 2018
GBPm GBPm GBPm
---------------------------------- --------- --------- -----------
Non-cash items
- Restructuring provision release - - 0.1
---------------------------------- --------- --------- -----------
Total - - 0.1
---------------------------------- --------- --------- -----------
4. Taxation
The tax charge on profit from continuing operations before taxation has been estimated at GBP0.3m (31July 2017: GBP0.2m; 31 January 2018: GBP0.8m).
5. Discontinued operations
Discontinued operations in the prior full and half-year results comprise the Agar, Carnation, Wallace, Digitron, Titman Tip Tools, Sheen Instruments and Elektron Medical brands together with Queensgate Nano which was sold subsequent to 31 January 2018 on 15 February 2018. The prior year balances have been restated where required.
Half year Half year
to to Year to
31 July 31 July 31 January
2018 2017 2018
GBPm GBPm GBPm
----------------------------- --------- --------- -----------
Operating loss - (0.3) (0.9)
Attributable tax - 0.1 0.2
----------------------------- --------- --------- -----------
Operating loss after tax - (0.2) (0.7)
(Loss)/profit on disposal (0.1) (0.1) 0.6
Attributable tax on disposal - - -
----------------------------- --------- --------- -----------
Total (0.1) (0.3) (0.1)
----------------------------- --------- --------- -----------
Queensgate Nano
The results of the Queensgate Nano discontinued operation, which have been included in the consolidated statement of comprehensive income, were as follows:
Half year Half year
to to Year to
31 July 31 July 31 January
2018 2017 2018
GBPm GBPm GBPm
----------------------------------------------- --------- --------- -----------
Revenue - 0.4 0.8
Expenses - (0.8) (1.7)
----------------------------------------------- --------- --------- -----------
Loss before tax - (0.4) (0.9)
Attributable tax - 0.1 0.2
----------------------------------------------- --------- --------- -----------
Loss from discontinued operations attributable
to equity shareholders - (0.3) (0.7)
----------------------------------------------- --------- --------- -----------
During the year, Queensgate Nano used less than GBP0.1m (H1 FY18: GBP0.4m) of the Group's net operating cash flows, paid less than GBP0.1m (H1 FY18: GBP0.1m) in respect of investing activities and paid less than GBP0.1m (H1 FY18: less than GBP0.1m) in respect of financing activities.
Details of the disposal of Queensgate Nano are set out below:
GBPm
------------------------------ -----
Property, plant and equipment 0.2
Capitalised development costs 0.3
Inventories 0.4
Assets sold 0.9
Net loss on disposal (0.1)
------------------------------ -----
Total consideration 0.8
------------------------------ -----
Satisfied by:
Cash and cash equivalents 0.8
------------------------------ -----
Total consideration 0.8
------------------------------ -----
Under the terms of the sale the Group has the right to receive up to a further GBP0.8m based on Queensgate Nano's sales revenues achieving certain targets in the twelve months after completion, of which GBP0.1m was received in August 2018.
6. Earnings per share
Earnings per share (EPS) is the amount of post-tax profit attributable to each share (excluding those held in the Employee Benefit Trust or by the Company). Basic EPS measures are calculated as the Group profit for the period attributable to equity shareholders divided by the weighted average number of shares in issue during the period. Diluted EPS takes into account the dilutive effect of all outstanding share options priced below the market price, in arriving at the number of shares used in its calculation. Both of these measures are also presented on an adjusted basis, to remove the effects of non-recurring or special items. The note below demonstrates how this calculation has been performed.
The calculation of the basic, adjusted and diluted earnings per share is based on the following data:
31 July 31 July 31 January
2018 2017 2018
Key Million Million Million
------------------------------------------- ---- -------- -------- ----------
Weighted average number of ordinary
shares for the purposes of basic earnings
per share A 178.0 177.8 177.9
Effect of dilutive potential ordinary
shares: share options 10.7 4.6 9.2
------------------------------------------------- -------- -------- ----------
Weighted average number of ordinary
shares for the purposes of diluted
earnings per share B 188.7 182.4 187.1
------------------------------------------- ---- -------- -------- ----------
31 July 31 July 31 January
2018 2017 2018
Earnings/(loss) from continuing operations Key GBPm GBPm GBPm
---------------------------------------------- ---- ------- ------- ----------
Earnings for the period 1.0 0.1 1.8
Loss from discontinued operations,
net of tax 0.1 0.3 0.1
---------------------------------------------------- ------- ------- ----------
Continuing profit for the period attributable
to equity shareholders C 1.1 0.4 1.9
Total non-recurring or special items
included in profit before tax - - (0.1)
Total non-recurring or special items
in taxation - - -
---------------------------------------------- ---- ------- ------- ----------
Earnings adjusted for EPS D 1.1 0.4 1.8
---------------------------------------------- ---- ------- ------- ----------
31 July 31 July 31 January
Key 2018 2017 2018
------------------------------ ---- ------- ------- ----------
EPS measures
Basic continuing EPS C/A 0.6p 0.2p 1.1p
Diluted continuing EPS C/B 0.6p 0.2p 1.0p
------------------------------ ---- ------- ------- ----------
Adjusted EPS measures
Adjusted basic continuing EPS D/A 0.6p 0.2p 1.0p
Adjusted diluted EPS D/B 0.6p 0.2p 1.0p
------------------------------ ---- ------- ------- ----------
7. Cautionary statement
This interim financial information has been prepared only for the shareholders of Elektron as a whole and its sole purpose and use is to assist shareholders to exercise their governance rights. Elektron and its Directors and employees are not responsible for any other purpose or use or to any other person in relation to this report.
The report contains indications of likely future developments and other forward-looking statements that are subject to risk factors associated with, among other things, the economic and business circumstances occurring from time to time in the countries, sectors and business segments in which the Group operates. Key risks and their mitigation have not changed materially in the period from those disclosed on pages 21 to 24 of the annual financial statements for the year ended 31 January 2018.
These and other factors could adversely affect the Group's results, strategy and prospects. Forward-looking statements involve risks, uncertainties and assumptions. They relate to events and/or depend on circumstances in the future which could cause actual results and outcomes to differ materially from those currently anticipated. No obligation is assumed to update any forward-looking statements, whether as a result of new information, future events or otherwise.
8. Other information
The financial information in this statement does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. The financial information in respect of the year ended 31 January 2018 has been extracted from the statutory accounts, which have been filed with the Registrar of Companies. The Independent auditor's report on those accounts was unqualified and did not contain a statement under Sections 498(2) or 498(3) of the Companies Act 2006.
Copies of the interim results are available to download from the Group's website, www.elektron-technology.com.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
IR VVLFFVKFBBBZ
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September 19, 2018 02:00 ET (06:00 GMT)
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