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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Energy Tech. | LSE:ETQ | London | Ordinary Share | GB00B6V9F139 | 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% | 335.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMETQ
RNS Number : 2601F
Energy Technique PLC
11 November 2015
Energy Technique Plc
("Energy Technique" or the "Company")
Half-Year Report
30 September 2015
Headlines
-- Sales increased by 9.2% over the corresponding half-year to GBP5.95 million;
-- Operating profit of Diffusion increased by 21.9% over the corresponding half-year to GBP768,000;
-- Group profit before tax increased by 33.6% over the corresponding half-year to GBP613,000;
-- EPS increased by 47.7% over the corresponding half-year to 22.3 pence per share;
-- Further improvement in net cash to GBP1.70 million at 30 September 2015 and net assets to GBP2.78 million;
-- Enquiries and order intakes are at high levels and the Board believes this will translate into another year of growth for the year ending 31 March 2016.
Chairman's statement
Introduction
I am very pleased to report a continuation of profit improvement for the half-year ended 30 September 2015. Sales increased by 9.2% over the corresponding period to GBP5.95 million, generating improved operating profit for the Company's trading business, Diffusion, to GBP768,000 and of group profit before tax to GBP613,000. The Company is now midway through its fifth consecutive year of both sales and profit growth and the Board considers these half-year results have laid the foundations for continued growth in the year ending 31 March 2016.
Financial performance
Sales in the half-year ended 30 September 2015 increased by 9.2% to GBP5.95 million (2014: GBP5.44 million). Sales of the largest product group, fan coils, increased by 6.9% to GBP4.66 million (2014: GBP4.36 million), attributed to a continuation of stronger UK fan coil market demand and to Diffusion's premium branded product offering. Sales of the smaller commercial heating range were much stronger in the half-year, increasing by 12.8% to GBP0.88 million (2014: GBP0.78 million), despite continued difficult trading conditions on the UK high street.
Diffusion's operating profit increased by 21.9% to GBP768,000 (2014: GBP630,000), representing an improved operating profit margin of 12.9% (2014: 11.6%). Notwithstanding downward market price pressure, gross profit margins remained stable at 35.3% (2014: 35.2%) due to lean manufacturing methods and a well-balanced sales mix. Group profit before tax increased by 33.6% to GBP613,000 (2014: GBP459,000) after charging reduced Central costs of GBP140,000 (2014: GBP150,000).
The taxation charge includes a corporation tax charge of GBP86,000, which the Board anticipates will reverse in the second half of the year ending 31 March 2016 should tax relief become available on the exercise of share options, resulting in a nil corporation tax charge for the year ending 31 March 2016.
Diffusion's operating performance
The number and size of commercial and high-end residential developments and refurbishments currently being carried out and planned by the leading property owning companies are providing ideal trading conditions for Diffusion.
The ECO 270 fan coil range offering 25% energy savings for no additional capital cost continues to provide Diffusion with a strong competitive advantage and to protect this position, an agreement has been signed with the motor supplier for a five-year extension to the existing exclusivity agreement, but including wider overseas geographical coverage. Diffusion has also been appointed an OEM supplier by a leading controls company, allowing Diffusion to supply a higher added value fan coil product, incorporating software configured control units.
Following successful entry into the high-end residential sector, Diffusion had a well-balanced sales mix in the half year between its commercial and high-end residential sectors. Fan coils were supplied into a number of landmark developments and to over 200 different projects in total, thereby mitigating business risk and contributing to the maintenance of overall target selling margins. Larger fan coil projects included Chiswick Park, 7 Lacon House, 8 Finsbury Circus, 109 Lambeth Road, Eland House, Riverwalk (Apartments & Penthouses) and St James Market.
Over the last two years, commercial heating sales were adversely impacted by difficult trading conditions in the retail sector, resulting in reduced demand due to store closures. Against this background, it is pleasing to report that commercial heating sales increased by 12.8% in the half year. Diffusion continues to serve its long list of blue-chip clients/end users including Waitrose, Marks & Spencer, Boots, H&M, SuperDry and Next.
Cash flow and net cash
Cash generated by operating activities increased by 7.0% to GBP427,000 (2014: GBP399,000). Capital expenditure in the half-year was GBP54,000 (2014: GBP28,000) and dividends paid amounted to GBP54,000 (2014: GBP48,000). The resulting growth in net cash during the half year was GBP319,000 (2014: GBP317,000), resulting in an improved cash position at 30 September 2015 of GBP1.70 million (31 March 2015: GBP1.38 million). The Company is soundly financed with this level of liquidity and net assets at 30 September 2015 of GBP2.78 million (31 March 2015: GBP2.22 million).
Formal sale process
On 26 February 2015, the Board announced that it had resolved to offer the Company for sale by means of a formal sale process, in accordance with Note 2 on Rule 2.6 of the City Code on Takeovers and Mergers. Whilst the Board believes the Company has a secure future as an independent business, the Board took this decision to seek to unlock and crystallise value for shareholders. The Company appointed Cavendish Corporate Finance LLP as financial adviser to conduct the sale process.
At the same time as releasing these half-year accounts, the Board is also pleased to announce an offer to acquire the Company by Volution Group plc at a price of GBP3.45 per share, together with a recommendation by the directors to vote in favour of this offer. Full details of this offer are set out in a separate announcement also released on 11 November 2015.
Dividends
The Board usually declares an interim dividend at the same time as releasing its half-year accounts. However, the Board will not be declaring an interim dividend for the current financial year, because the offeror has determined its offer price on the condition that no interim dividend is paid.
Current trading and prospects
Whilst this formal sales process completes, the Board is managing the Company for continued growth. Improved UK fan coil market demand that started over two years ago is expected to continue for the year ending 31 March 2016 and beyond. Enquiry levels remain high and the order book is strong. The Board is confident the results for the half-year ended 30 September 2015 have laid the foundations for achieving another successful year of growth for the full year ending 31 March 2016.
Walter Goldsmith
Chairman
11 November 2015
Contacts:
Energy Technique Plc: 020 8783 0033
Leigh Stimpson, Chief Executive
Robert Unsworth, Company Secretary
finnCap Ltd (Nominated Adviser): 020 7220 0500
Ed Frisby/Scott Mathieson
Consolidated statement of comprehensive income
For the six months ended 30 September 2015
6 months 6 months to to Year to 30 September 30 September 31 March 2015 2014 2015 Unaudited Unaudited Audited GBP000 GBP000 GBP000 --------------------------------- ------------- ------------- --------- Revenue 5,946 5,443 10,775 Cost of sales (3,846) (3,529) (7,088) --------------------------------- ------------- ------------- --------- Gross profit 2,100 1,914 3,687 Distribution costs (974) (927) (1,877) Administration expenses (498) (507) (1,010) --------------------------------- ------------- ------------- --------- Operating profit 628 480 800 Analysed as: --------------------------------- ------------- ------------- --------- Diffusion 768 630 1,120 Central costs (140) (150) (320) --------------------------------- ------------- ------------- --------- Finance costs (15) (21) (24) --------------------------------- ------------- ------------- --------- Profit before taxation 613 459 776 Taxation (79) (98) (81) --------------------------------- ------------- ------------- --------- Profit for the financial period 534 361 695 Earnings per share: Basic 22.3 15.1p 29.1p Fully diluted 20.0 13.5p 26.0p --------------------------------- ------------- ------------- ---------
There are no other recognised gains or losses other than as recorded in the consolidated statement of comprehensive income for the period.
Property costs of GBP163,000 (31 March 2015: GBP334,000 and 30 September 2014 GBP167,000) have been reclassified from cost of sales to administration expenses, so as to report underlying gross profit margins. There is no impact on reported operating profit.
Consolidated statement of financial position
(MORE TO FOLLOW) Dow Jones Newswires
November 11, 2015 02:00 ET (07:00 GMT)
At 30 September 2015
30 September 30 September 31 March 2015 2014 2015 Unaudited Unaudited Audited GBP000 GBP000 GBP000 --------------------------------------- ------------- ------------- --------- ASSETS Non-current assets Intangible assets 25 25 25 Plant and equipment 426 231 420 Deferred tax asset 126 - 40 Total non-current assets 577 256 485 Current assets Inventories 757 860 884 Trade and other receivables 2,216 1,833 1,749 Cash 1,699 1,190 1,380 Total current assets 4,672 3,883 4,013 Total assets 5,249 4,139 4,498 --------------------------------------- ------------- ------------- --------- LIABILITIES Current liabilities Trade and other payables (1,916) (1,842) (1,900) Current tax liabilities (333) (262) (243) Hire purchase obligations - (4) - Total current liabilities (2,249) (2,108) (2,143) Non-current liabilities Provisions (114) (117) (114) Non-current tax liabilities (86) - - Deferred tax liability (23) - (23) --------------------------------------- ------------- ------------- --------- Total non-current liabilities (223) (117) (137) Total liabilities (2,472) (2,225) (2,280) --------------------------------------- ------------- ------------- --------- Net assets 2,777 1,914 2,218 --------------------------------------- ------------- ------------- --------- EQUITY Equity attributable to equity holders Issued capital 239 239 239 Other reserves 94 94 94 Retained earnings 2,444 1,581 1,885 --------------------------------------- ------------- ------------- --------- Total equity 2,777 1,914 2,218 --------------------------------------- ------------- ------------- ---------
Consolidated statement of changes in equity
Share Other Retained capital reserves earnings Total GBP000 GBP000 GBP000 GBP000 ------------------------------------ --------- ---------- ---------- -------- Half year ended 30 September 2015 - Unaudited At 1 April 2015 239 94 1,885 2,218 Deferred tax on share options - - 79 79 Dividends paid - - (54) (54) Comprehensive income - - 534 534 At 30 September 2015 239 94 2,444 2,777 ------------------------------------ --------- ---------- ---------- -------- Half year ended 30 September 2014 - Unaudited At 1 April 2014 239 94 1,262 1,595 Share options charge - - 6 6 Dividends paid - - (48) (48) Comprehensive income - - 361 361 At 30 September 2014 239 94 1,581 1,914 ------------------------------------ --------- ---------- ---------- -------- Year ended 31 March 2015 - Audited At 1 April 2014 239 94 1,262 1,595 Share options charge - - 12 12 Dividends paid - - (84) (84) Comprehensive income - - 695 695 At 31 March 2015 239 94 1,885 2,218 ------------------------------------ --------- ---------- ---------- --------
Consolidated cash flow statement
For the six months ended 30 September 2015
6 months 6 months Year to to to 31 March 30 September 30 September 2015 2015 2014 Audited Unaudited Unaudited GBP000 GBP000 GBP000 -------------------------------------------- -------------- -------------- ---------- Cash flows from operating activities Profit before taxation 607 459 776 Finance costs 15 21 24 Depreciation 48 40 84 Share option charge 6 6 12 Profit on disposal of plant and equipment - - (2) -------------------------------------------- -------------- -------------- ---------- Operating income before changes in working capital 676 526 894 Reduction/(increase) in inventories 127 (89) (113) (Increase)/reduction in trade and other receivables (467) (81) 3 Increase in trade and other payables 106 64 103 -------------------------------------------- -------------- -------------- ---------- Cash generated by operations 442 420 887 Finance costs (15) (21) (24) -------------------------------------------- -------------- -------------- ---------- Net cash generated by operating activities 427 399 863 -------------------------------------------- -------------- -------------- ---------- Cash flows from investing activities Purchase of plant and equipment (54) (28) (264) Proceeds from sale of plant and equipment - - 2 Net cash used in investing activities (54) (28) (262) -------------------------------------------- -------------- -------------- ---------- Cash flows from financing activities Repayments under hire purchase obligations - (6) (10) Dividends (54) (48) (84) Net cash used in financing activities (54) (54) (94) -------------------------------------------- -------------- -------------- ---------- Net increase in cash and cash equivalents 319 317 507 Cash and cash equivalents at beginning of period 1,380 873 873 Cash and cash equivalents at end of period 1,699 1,190 1,380 -------------------------------------------- -------------- -------------- ----------
Consolidated segmental analysis
For the six months ended 30 September 2015
6 months 6 months to to Year to 30 September 30 September 31 March 2015 2014 2015 Unaudited Unaudited Audited GBP000 GBP000 GBP000 -------------------------------------- ------------- ------------- --------- Revenue United Kingdom 5,413 5,085 10,033 Europe 533 358 741 Rest of World - - 1 -------------------------------------- ------------- ------------- --------- 5,946 5,443 10,775 -------------------------------------- ------------- ------------- --------- Operating profit Diffusion 768 630 1,120 Central costs (140) (150) (320) Operating profit 628 480 800 Interest (net) (15) (21) (24) -------------------------------------- ------------- ------------- --------- Profit before tax 613 459 776
(MORE TO FOLLOW) Dow Jones Newswires
November 11, 2015 02:00 ET (07:00 GMT)
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