LPA Group PLC Final Results (9396N)

TIDMLPA

RNS Number : 9396N

LPA Group PLC

24 January 2019

LPA GROUP PLC

LPA Group plc ("LPA" or the "Group"), the high reliability LED lighting and electro-mechanical system manufacturer and distributor, announces record results for the year ended 30 September 2018 and record orders in the first quarter.

Preliminary results key points:

KEY POINTS

 
      --   Sales up GBP5.50m (24.5%) at GBP27.98m (2017: GBP22.48m) 
      --   Operating profit before exceptional items up 18.4% at GBP2.24m 
            (2017: GBP1.90m) 
      --   Exceptional and non-underlying items (cost) GBP175,000 
            (2017: (gain) GBP73,000) 
      --   Profit before tax up 5.7% at GBP2.02m (2017: GBP1.91m) 
      --   Basic earnings per share amounted to 14.34p (2017: 14.40p) 
      --   Final dividend increased 9% to 1.80p (2017: 1.65p), total 
            for the year 2.90p (2017: 2.70p) 
      --   Gearing reduced to 15.5% (2017: 25.7%) 
      --   Order entry amounted to GBP20.2m (2017: GBP26.1m) 
      --   Order book amounted to GBP13.8m (2017: GBP21.6m) 
      --   Continued investments in automation and productivity throughout 
            the year 
 

Peter Pollock - Chairman commented:

" The 2018 financial year proved exceptional, delivering a third successive year of record sales and profits, exceeding expectations.

As expected, order entry fell back relative to the very high levels achieved in 2017, reflecting the fluctuating demands of our markets, but were nevertheless very high in historical terms and the fifth highest on record.

As previously reported, some major rail projects, including CrossRail, have been delayed and as a consequence the current year has started quietly, reflecting the lower current demand, which is expected to pick up substantially as the year progresses.

Happily, orders entered in the first quarter have been a new record at over GBP9m, exceeding order entry for the first half of last year and under pinning progress in the medium term. Contract orders include Central and Waterloo & City lines lighting refurbishment with LUL, GBP4.7m including a further support contract; GBP670k lighting for Doha Metro extension through Kinki Sharyo and GBP1.4m bespoke electro-mechanical underframe structures for a major UK rail OEM.

After a slow start the year as a whole should be satisfactory."

23 January 2019

ENQUIRIES:

 
 LPA Group plc 
 Peter Pollock, Chairman                    Tel: [phone] 
 Chris Buckenham, Chief Financial Officer   Tel: [phone] 
 Paul Curtis, Chief Operating Officer       Tel: [phone] 
 Cairn Financial Advisers (Nominated        Tel: [phone] 
  Adviser) 
 James Caithie / Tony Rawlinson 
 WH Ireland (Broker)                        Tel: [phone] 
 Mike Coe / Chris Savidge 
 Instinctif Partners (PR Adviser)           Tel: [phone] 
 Rosie Driscoll / Christine Galloway 
  / Mark Garraway 
 

Chairman's Statement

Overview

In his statement at the half year my predecessor Michael Rusch, now our Group President, commented that the level of sales and profits last year would be exceptional and maybe under pressure in the current year, but the funnel of opportunities, which leads to our pipeline of orders, was very encouraging. As usual, he has proved to be pretty accurate, although, he could not have foreseen the unexpected delays to Crossrail and other major projects which affected the final quarter of last year and will affect the first half of the current year. These orders have not been lost, merely delayed, and should contribute later this year and next year, although the extent of the delays has not yet been defined.

However, the funnel of opportunities has been very productive yielding over GBP9m of orders in the first quarter, a record, giving increased confidence for the future.

Sales for the year increased 24.5% to GBP28.0m (2017: GBP22.5m) and operating profit before exceptional and non-underlying items was up 18.4% at GBP2.2m (2017: up 26.6% at GBP1.9m). Profit before tax, after exceptional costs of GBP0.18m (2017: gain of GBP0.07m), increased 5.7% to GBP2.0m (2017: GBP1.9m). Basic earnings per share for the year were 14.3p (2017: 14.4p), held back by a less benign tax rate. Gearing reduced to 15.5% (2017: 25.7%).

Order entry fell back to GBP20.2m from the exceptional level of GBP26.1m achieved in 2017 and this, together with the exceptional levels of output, was reflected in the order book at the end of the year which amounted to GBP13.8m (2017: GBP21.6m). This trend reversed in the first quarter of the current year when record order entry of GBP9m was achieved.

Dividends

Given this excellent performance and our confidence in the future, subject to shareholder approval at the forthcoming annual general meeting to be held at the offices of Instinctif Partners, 65 Gresham Street, London EC2V 7NQ at 12 noon on Thursday 21(st) March 2019 - your Board proposes to increase the final dividend by 9.1% to 1.80p (2017: 1.65p), making a total for the year of 2.90p (2017: 2.70p). The dividend, if approved, will be paid on 29(th) March 2019 to shareholders registered at the close of business on 8(th) March 2019.

Corporate Governance

The Group has adopted the Quoted Companies Alliance Corporate Governance Code. This places responsibility for oversight, adoption and communication of the Group's Corporate Governance Model with the Chair.

The Board considers that the Group's Annual Report is a Document of Record and therefore eminently suited to be the repository of the Group's statements on compliance with the Code. These will be reviewed at least annually and updated as necessary and are set out in the Annual Report.

Further the Board considers it helpful to have a statement on the group's North Star or Guiding Light. This forms part of our Corporate Governance and is set out in the Annual Report.

Board and Management

Stephen Brett, our Finance Director and Company Secretary of seventeen years and Per Staehr, one of our Non-Executive Directors having served ten years on the Board, retired from the board at the annual general meeting on 21(st) March 2018. I should like to thank them both for their exemplary service to the Group.

Len Porter assumed the role of Senior Non-Executive director and Chair of the Audit and Remuneration Committees with effect from 21(st) March 2018.

Chris Buckenham succeeded Stephen in the role of Chief Financial Officer and Company Secretary with effect from 22(nd) March 2018.

Michael Rusch, our Chairman with more than fifty years' service to the Group, relinquished the Chair on 30(th) September 2018 and assumed the position of Group President and Non-Executive Director. I should like to pay tribute to him for his excellent service to the Group.

I succeeded Michael as Chairman on 1(st) October 2018, relinquishing my role of Group Chief Executive.

Paul Curtis, Managing Director of LPA Channel Electric Limited was appointed Chief Operating Officer of the Group with effect from 1(st) October 2018. It is expected that Paul will be promoted to Chief Executive Officer at the conclusion of the AGM in March 2020, when my role will become Non-Executive.

Michael Raynor was appointed General Manager of LPA Channel Electric with effect from 1st October 2018 and joins the Group Executive alongside Greg Howell, Managing Director of LPA Connection Systems and John Hesketh, Managing Director of LPA Lighting Systems.

We expect to appoint a further Non-executive director in due course.

Employees

Our people remain our most important asset. During the year we experienced huge swings in demand from those which temporarily exceeded capacity to those which required a downward adjustment in capacity. At the same time, we have been making substantial capital investments and training to upskill our workforce, to improve productivity and secure future employment opportunities. As a consequence, we have had to largely eliminate our core of temporary employees and make certain permanent roles redundant, releasing some valued colleagues to the employment market. We wish our employees, past and present, all the best for the future.

Outlook

Although the current year is challenging as previously reported, our order book has recovered strongly, our pipeline is encouraging and our funnel full of opportunities at home and abroad. We have reviewed our Brexit strategy and find that we have a strong long-term order book, a strong balance sheet, a skilled workforce and great experience in importing and exporting, which we believe will sustain us in a good position. Though we foresee challenges, we look forward to the future with confidence.

Peter Pollock

Chairman

23 January 2019

Chief Operating Officer's Review

Trading Results

Following the excellent results of 2017, the year to 30(th) September 2018 has been another record year. This is despite the many challenges that we face in the market and the unprecedented political conditions the UK faces at this time. We have previously advised of delays in rail projects such as CrossRail, which impacted the end of 2018, and although these are starting to come back online, there will continue to be an element of disruption from these felt in the first half of 2019. That said, all areas of the Group have contributed well to the year, structural changes have bedded in quickly with minimal disruption, and the Group is focused on the task in hand.

2018 Summary

   --     Order entry GBP20.2m (2017: GBP26.1m) 
   --     Sales up 24.5% at GBP28.0m (2017: GBP22.5m) 
   --     Profit, before exceptional and non-underlying items, up 18.4% to GBP2.2m (2017: GBP1.9m) 

The exceptional order entry from 2017 culminated in record output on several projects resulting in excellent sales for the year. Projects do however attract slightly lower added value and margins compared to routine orders and, as such, have the effect of slightly reducing the added value percentage realised throughout the year to 48.6% (2017: 52.1%).

Markets

Rail, Aviation and niche industrial markets remain strong for LPA and will continue to be the focus for the coming year. These markets require excellent products and support and, therefore align with the LPA mantra of long-life reliability, which is a recurring feature across all our products.

The UK is experiencing record investment in both mainline and metro rail, with high volumes of vehicles to be delivered in the coming years, providing many opportunities to pursue. Worldwide rail is also enjoying strong investment, and, markets that have served the Group well in the past all have projects to target in the coming months and years. Weak Sterling continues to help the export cause and its impact on import costs is being managed.

Aviation continues to grow worldwide providing opportunities in both the aircraft and aircraft ground support markets. Projects, such as A350 and C Series, are in the early days of production build and the Group is well positioned to benefit as build rates increase. A programme of refreshing our aircraft ground support products, to improve performance and economies of manufacture, is also nearly complete and will launch in 2019 with a view of increasing this business throughout the 50+ countries we export to.

Our Industrial markets feature areas which benefit from or require a high level of reliability such as high bay and tunnel lighting, station infrastructure and marine applications, to name a few. These areas, as with any, are subject to market fluctuation but in general remain strong and are targeted for increased efforts over the coming years.

With the investments made throughout the Group there is now an excellent capability in all aspects of electronic and electro-mechanical engineering, a capability the UK is valuing more and more. Efforts are now being made to see how these capabilities can be further leveraged to increase business in both current and new markets.

Design and development

As previously mentioned, the aircraft ground support range of connectors, manufactured by LPA Connection Systems, is concluding a complete re-fresh, which will see common design elements providing economies of scale, whilst also giving the customer a world leading product and service. This design effort will continue, with both the rail and industrial ranges of connectors, targeted for investment and improvement, ensuring that we are able to continue to serve our markets for the coming years.

LPA Lighting Systems also continued product developments and, during the year, launched its new range of smart lighting, which will feature strongly in future rail bids and, keeps us at the forefront of technology in this field. LED remains the product of choice in most of our customers lighting projects. LPA has a growing reputation for excellence in LED lighting.

LPA Channel, our engineered components business, is now the standard for many of the applications providing passenger device charging on trains and features on many of the new builds to be delivered over the coming years. Other initiatives in product development should also come on stream during the second part of 2019 helping to secure the longer term.

Operations

Production improvement initiatives and investments have yielded excellent results as follows:

 
      --   Efficiencies on production lines; 
      --   The installation of robotic welding giving increased efficiency 
            whilst improving repeatability and quality; 
      --   Adoption of robotics into production gaining efficiencies 
            in manual repeatable tasks; 
      --   The implementation of a new 5 axis machining centre improving 
            both efficiency and capability; and 
      --   3D printing to assist rapid prototyping and the easy creation 
            of jigs and fixtures for manufacturing. 
 

These investments, which have been well received by our customer base, have resulted in new opportunities and therefore this is an area we are targeting for growth over the coming period. The Group is committed to investment in its capability and efficiency and this will continue for the coming year as we strive for better service, performance and quality in all areas of the business.

2019 will see the implementation of four new lean lift stores systems at the Connection Systems site, which will free up much needed space and, eliminate the need for renting of additional space to meet increased spikes in production requirements, as seen in 2018. In addition to this, the Lighting Systems business has built a further extension on its site to improve storage, which will again eliminate the need for external storage capacity as required during 2018.

Following the spike in 2018 and with the consequence of delays in certain projects, it has been necessary to restructure some areas of the business. This involved releasing a few of our permanent team but was mostly accomplished with the release of our temporary workers. We continue to believe that our staff are our greatest asset and maintain our commitment to training and development in all areas of the business.

Outlook

In the 2017 report we stated that 2018 would start strongly and then settle. Unfortunately, the settled run rate has been impacted in the first half of 2019 by project delays, including Crossrail. However the delayed projects should benefit the second half and lead to a positive year with a recovery overall. The market is strong and still providing many opportunities for the current and later years, a case in point being the 1(st) quarter of the 2019 year providing record order entry levels at over GBP9m. Transportation, whether Aviation or Rail, are markets that continue to see worldwide investment and, with both Siemens and CAF committed to new build train facilities in the UK, with potentially others to follow, coupled with projects like Deep Tube for London and HS2, LPA is well placed to benefit from the opportunities that we expect to arise in the coming years.

Paul Curtis

Chief Operating Officer

23 January 2019

Financial Review

Trading Performance

Revenue in the current year rose by GBP5.50m (24.5%) to GBP27.98m (2017: GBP22.48m) with increased rail project activity being the main factor. Gross margins fell 2.8% to 25.4% (2017: 28.2%), reflecting the higher volume of lower margin rail projects and some additional costs borne to alleviate capacity constraints, including temporary labour. Gross profit of GBP7.12m (2017: GBP6.34m) resulted. Other operating expenses reduced by 2.4% of sales to 17.4% (2017: 19.8%), increasing in total by GBP0.43m at GBP4.87m (2017: GBP4.44m) - key changes being increased sales and distribution costs of GBP0.35m, 6.9% of sales (2017: 7.0%), increased administration and overheads of GBP0.08m, 10.5% of sales (2017: 12.8%), including increased bonus awards of GBP116,000 (2017: GBP98,000), increased pension administration and governance inclusive of triennial defined benefit and contribution scheme reviews, at GBP171,000 (2017: GBP102,000) and share option related credit of GBP17,000 (2017: GBP6,000).

An operating profit before exceptional and non-underlying items of GBP2.24m (2017: GBP1.90m) was achieved, up GBP0.34m (18.4%).

In the first half of the year sales of GBP13.93m (2017: GBP10.80m), up 28.9%, produced an operating profit before exceptional and non-underlying items of GBP1.12m (2017: GBP0.77m), up 45.4%, on the corresponding period last year. The second half was comparable with sales of GBP14.05m (2017: GBP11.68m) delivering an operating profit before exceptional and non-underlying items of GBP1.12m (2017: GBP1.12m). Sales in the second half were up by GBP0.12m on the first half (0.9%), profits constant across each of the last three half years.

Exceptional and Non-Underlying Items

Net exceptional costs in the period totalled GBP175,000 (2017: net gain GBP73,000), a net cost increase of GBP248,000 over 2017.

The period included GBP175,000 of non-underlying costs (2017: GBP268,000), key items comprising: (i) reorganisation costs of GBP96,000 - associated with cost base reductions at the Group's Electro-Mechanical site (2017: GBP45,000, costs associated with the relocation of the groups lighting facility); (ii) extra centre costs arising from Board succession planning including duplicated finance function costs of GBP74,000 (2017: GBP102,000); (iii) professional and recruitment fees associated with the Board succession and establishment of the Group's Employee Benefit Trust GBP3,000 (2017: GBP60,000); (iv) corporate finance costs GBP2,000 (2017: GBP61,000).

In 2017 the sale of the Group's former lighting factory realised an exceptional gain of GBP341,000.

Finance Costs and Income

Within finance costs the interest on borrowings increased by 6.7% to GBP80,000 (2017: GBP75,000). The weighted average interest rate increased from 2.4% to 2.7%, both through increased hire purchase funding, despite an overall average rate reduction of 0.57% on 2017, and two UK base rate rises of 0.25% in the year, increasing the term loan average rate by 0.35% overall. Finance income, which comprises the net interest income on the pension asset, was GBP35,000 (2017: GBP21,000).

Profit before Tax, Taxation and Earnings Per Share

Profit before tax was GBP2.02m (2017: GBP1.91m) resulting in a tax charge of GBP0.25m (2017: GBP0.15m). The effective tax rate in the year was 12.5% (2017: 7.6%), materially below the UK corporation tax rate of 19.0% (2017: 19.5%), with the reduction largely the consequence of tax loss utilisation 1.2% (2017: 2.6%), qualifying R&D expenditure 2.8% (2017: 3.0%). In 2017 no tax was anticipated on the exceptional property gain attributing to a further reduction of 3.4%; the effective tax rate on profit before tax, exceptional and non-underlying items was 11.3% (2017: 7.7%). The profit for the year was GBP1.77m (2017: GBP1.77m) representing basic earnings per share of 14.34p (2017: 14.40p).

Balance Sheet

Shareholders' funds rose by GBP1.99m (18.5%) in the year to GBP12.71m (2017: GBP10.72m) giving a net asset value per ordinary share of 104.4p (2017: 86.6p). The tangible net asset value per share (calculated excluding intangibles and pension asset, net of deferred tax, from the calculation) was 78.3p (2017: 68.5p). Net debt reduced GBP0.78m to GBP1.97m (2017: GBP2.75m) with gearing (net debt as a % of total equity) falling to 15.5% (2017: 25.7%).

Shareholders' funds include Investment in Own Shares at GBP0.02m par value and GBP0.19m share premium (2017: nil), representing ordinary shares held in the Company by the LPA Group Plc Employee Benefit Trust.

Intangible assets, which comprise goodwill and capitalised development costs, were GBP1.20m (2017: GBP1.19m). Goodwill relates to the Group's investment in Excil Electronics and was unchanged at GBP1.15m. Capitalised development costs, associated with the development of LED lighting products, were GBP0.05m (2017: GBP0.04m).

Property, plant and equipment at 30 September was GBP7.22m (2017: GBP6.85m), of which property made up GBP4.34m (2017: GBP4.32m) and plant and equipment GBP2.87m (2017: GBP2.54m). Additions in the year were GBP1.02m (2017: GBP1.97m), 2017 including the remaining cost of the new lighting facility at GBP0.93m. Disposals at net book value amounted to GBPnil (2017: GBP0.20m). The depreciation charge increased 20.2% at GBP0.65m (2017: GBP0.54m).

The IAS19 actuarial surplus recognised at 30 September 2018 on the Group's closed defined benefit pension arrangement was GBP2.41m (2017: GBP1.31m). Changes over the course of the year comprised an income statement credit of GBP0.04m (2017: GBP0.02m), employer contributions received of GBP0.10m (2017: GBP0.10m) plus an actuarial gain of GBP0.96m (2017: GBP0.35m) recognised in the statement of comprehensive income. The actuarial gain resulted from changes to demographic assumptions in line with market indices (primarily caused through a slight reduction in overall life expectancy) and changes in financial assumptions of GBP0.41m (primarily reflecting the higher discount rate applicable at September 2017, 2.8% as opposed to 2.6%) plus an experience gain on liabilities of GBP0.25m plus a return on plan assets of GBP0.06m.

Net trading assets (defined as inventories plus trade and other receivables, less trade and other payables and current tax) were 1.4% lower at GBP4.29m (2017: GBP4.35m).

Cash Flow

Net cash from operating activities was GBP2.45m (2017: GBP1.49m) made up of a trading cash inflow of GBP2.72m (2017: GBP2.23m) less an increase in working capital of GBP0.14m (2017: GBP0.53m), tax payments of GBP0.03m (2017: GBP0.11m) and pension contributions of GBP0.10m (2017: GBP0.10m).

Capital expenditure outflows reduced to GBP0.5m (2017: GBP1.6m), including GBP0.09m spent on the new lighting facility (2017: GBP0.93m). The year contained asset disposal proceeds of GBP0.01m (2017: GBP0.53m relating to the sale of the Group's old lighting facility). Capitalised development expenditure was GBP0.03m (2017: GBP0.03m).

Loan repayments of GBP0.20m were made (2017: GBP0.70m which included repayment of a development loan to assist bridge the sale and purchase of the new lighting premises). Finance lease repayments were GBP0.11m (2017: GBP0.08m). Interest payments on borrowings amounted to GBP0.02m (2017: GBP0.02m). Dividend payments increased 7.6% in the year to GBP0.34m (2017: GBP0.32m).

During the year, GBP0.25m was loaned to the Group's Employee Benefit Trust to facilitate the acquisition of LPA Group plc shares (2017: nil). The transactions associated with the Employee Benefit Trust are consolidated within these accounts. No monies were received from the exercise of share options, with no option exercises during the year (2017: GBP0.17m was received).

Overall there was a net increase in the cash position of GBP1.05m (2017: decrease of GBP0.11m).

Net Debt

An analysis of the change in net debt is shown below:

 
                                  Bank Loans   Finance Lease       Cash and        Net Debt 
                                                Obligations     Cash Equivalents 
                                      GBP000          GBP000              GBP000     GBP000 
 
 At 1 October 2017                     2,311             345                  97      2,753 
 New Finance Lease Obligations             -             521                   -        521 
 Interest & Arrangement 
  Fee                                     55               -                   -         55 
 Repayment of Borrowings               (196)           (109)                 304          - 
 Cash Generated                            -               -             (1,358)    (1,358) 
 
 At 30 September 2018                  2,170             757               (956)      1,971 
                                 ===========  ==============  ==================  ========= 
 

The Group's main bank finance is a GBP2.475m bank loan drawn down in 2016 and repayable over 5 years. As at September 2018 the amount outstanding was GBP2.17m (2017: GBP2.31m); the loan is to be repaid through 14 quarterly instalments, GBP0.05m from October 2018, with the residual balance repayable in April 2021; interest is payable at base rate plus 1.95%.

In the year GBP0.52m of plant and equipment additions were financed through new finance leases.

Interest on the GBP1.50m overdraft facility is payable at base rate plus 1.95% and headroom within the facility at 30 September was GBP1.50m (2017: GBP1.24m).

Treasury

The Group's treasury policy has not changed in the year: further details on the Group's borrowings, financial instruments, and its approach to financial risk management is set out in the Annual Report.

Chris Buckenham

Chief Financial Officer

23 January 2019

Consolidated Income Statement

For the year ended 30 September 2018

 
                                                            2018       2017 
                                                 Note     GBP000     GBP000 
 
 Revenue                                                  27,979     22,482 
 
 Cost of Sales                                          (20,862)   (16,145) 
 
 Gross Profit                                              7,117      6,337 
 
 Distribution Costs                                      (1,931)    (1,580) 
 
 Administrative Expenses - before exceptional 
  and non-underlying items                               (2,942)    (2,862) 
 
 Operating Profit before Exceptional and 
  Non-Underlying Items                                     2,244      1,895 
 
 Exceptional and non-underlying items                      (175)         73 
 
 Operating Profit                                          2,069      1,968 
 
 Finance Costs                                              (80)       (75) 
 Finance Income                                               35         21 
 
 Profit Before Tax                                         2,024      1,914 
 
 Taxation                                                  (253)      (146) 
 
 Profit for the Year                                       1,771      1,768 
                                                       =========  ========= 
 
 Attributable to: 
 - Equity Holders of the Parent                            1,771      1,768 
 
 Earnings per Share                                 1 
 Basic                                                    14.34p     14.40p 
 Diluted                                                  13.45p     13.42p 
                                                       =========  ========= 
 

All activities are continuing.

Consolidated Statement of Comprehensive Income

For the year ended 30 September 2018

 
                                                 2018     2017 
                                               GBP000   GBP000 
 
 Profit for the Year                            1,771    1,768 
                                              -------  ------- 
 
 Other Comprehensive Income / (Expense) 
 
 Items that will not be reclassified 
  to profit or loss 
 Actuarial gain / (loss) on pension scheme        962      349 
 Deferred tax on actuarial gains and 
  losses                                        (178)     (77) 
 
 Other Comprehensive Income Net of Tax            784      272 
                                              -------  ------- 
 
 
 Total Comprehensive Income for the Year        2,555    2,040 
                                              =======  ======= 
 
 Attributable to: 
 - Equity Holders of the Parent                 2,555    2,040 
                                              =======  ======= 
 

Consolidated Balance Sheet

At 30 September 2018

 
                                            2018      2017 
                                          GBP000    GBP000 
 
 Non-Current Assets 
 Intangible Assets                         1,200     1,185 
 Property, Plant and Equipment             7,216     6,851 
 Retirement Benefits                       2,409     1,311 
                                          10,825     9,347 
                                        --------  -------- 
 
 Current Assets 
 Inventories                               3,881     4,417 
 Trade and Other Receivables               5,540     5,054 
 Cash and Cash Equivalents                   956       119 
                                        --------  -------- 
                                          10,377     9,590 
                                        --------  -------- 
 
 Total Assets                             21,202    18,937 
                                        --------  -------- 
 
 Current Liabilities 
 Bank Overdraft                                -     (216) 
 Bank Loans and Other Borrowings           (322)     (227) 
 Current Tax Payable                       (266)      (64) 
 Trade and Other Payables                (4,868)   (4,969) 
                                        --------  -------- 
                                         (5,456)   (5,476) 
                                        --------  -------- 
 

 Non-Current Liabilities 
 Bank Loans and Other Borrowings         (2,605)   (2,429) 
 Deferred Tax Liabilities                  (430)     (221) 
 Other Payables                                -      (90) 
                                        --------  -------- 
                                         (3,035)   (2,740) 
                                        --------  -------- 
 
 Total Liabilities                       (8,491)   (8,216) 
                                        --------  -------- 
 
 Net Assets                               12,711    10,721 
                                        ========  ======== 
 
 Equity 
 Share Capital                             1,238     1,238 
 Investment in Own Shares                  (214)         - 
 Share Premium Account                       628       628 
 Un-Issued Shares Reserve                    122       134 
 Merger Reserve                              230       230 
 Retained Earnings                        10,707     8,491 
                                        --------  -------- 
 Equity Attributable to Shareholders 
  of The Parent                           12,711    10,721 
                                        ========  ======== 
 

Consolidated Cash Flow Statement

For the year ended 30 September 2018

 
                                                    2018      2017 
                                                  GBP000    GBP000 
 
 Profit Before Tax                                 2,024     1,914 
 Finance Costs                                        80        75 
 Finance Income                                     (35)      (21) 
 
 Operating Profit                                  2,069     1,968 
 Adjustments for: 
 Depreciation                                        652       543 
 Amortisation of Intangible Assets                    12        36 
 Gain on Sale of Property, Plant and 
  Equipment                                         (10)     (321) 
 Loan Arrangement Fees                                 -         4 
 
                                                   2,723     2,230 
 Movements in Working Capital and Provisions: 
 Change in Inventories                               536   (1,387) 
 Change in Trade and Other Receivables             (486)     (376) 
 Change in Trade and Other Payables                (190)     1,237 
 
 Cash Generated from Operations                    2,583     1,704 
 Income Taxes Paid                                  (35)     (112) 
 Retirement Benefits (Pension Contributions)       (100)     (100) 
 
 Net Cash from Operating Activities                2,448     1,492 
                                                 -------  -------- 
 
 Purchase of Property, Plant and Equipment         (496)   (1,643) 
 Proceeds from Sale of Property, Plant 
  and Equipment                                       10       525 
 Capitalised Development Expenditure                (27)      (27) 
 Purchase of own shares                            (214)         - 
 
 Net Cash Used in Investing Activities             (727)   (1,145) 
                                                 -------  -------- 
 
 Drawdown of Bank Loans                                -       500 
 Repayment of Bank Loans                           (196)     (702) 
 Repayment of Obligations Under Finance 
  Leases                                           (109)      (81) 
 Interest Paid                                      (24)      (23) 
 Proceeds from Issue of Share Capital                  -       166 
 Dividends Paid                                    (339)     (315) 
 
 Net Cash (Used In) Financing Activities           (668)     (455) 
                                                 -------  -------- 
 
 Net (Decrease) / Increase in Cash 
  and Cash Equivalents                             1,053     (108) 
 Cash and Cash Equivalents at Start 
  of the Year                                       (97)        11 
                                                 -------  -------- 
 Cash And Cash Equivalents At End Of 
  The Year                                           956      (97) 
                                                 =======  ======== 
 
 Reconciliation of Cash and Cash Equivalents 
 Cash and Cash Equivalents in Current 
  Assets                                             956       119 
 Bank Overdraft in Current Liabilities                 -     (216) 
                                                 -------  -------- 
 Cash and Cash Equivalents at End of 
  the Year                                           956      (97) 
                                                 =======  ======== 
 

Notes

1 - EARNINGS PER SHARE

The calculation of earnings per share is based upon the profit for the year of GBP1.771m (2017: GBP1.768m) and the weighted average number of ordinary shares in issue during the year, less investment in own shares, of 12.350m (2017: 12.276m). The weighted average number of ordinary shares diluted for the effect of outstanding share options, was 13.163m (2017: 13.179m).

 
                                          2018                               2017 
                            Earnings    Weighted    Earnings   Earnings    Weighted    Earnings 
                                         Average       Per                  Average       Per 
                                         Number       Share                 Number       Share 
                                        of Shares                          of Shares 
                           =========  ===========  =========  =========  ===========  ========= 
                              GBP000      Million      Pence     GBP000      Million      Pence 
                           =========  ===========  =========  =========  ===========  ========= 
 
 Basic Earnings Per 
  Share                        1,771       12.350      14.34      1,768       12.276      14.40 
 Effect of Share Options           -        0.813     (0.89)          -        0.903     (0.98) 
 Diluted Earnings 
  Per Share                    1,771       13.163      13.45      1,768       13.179      13.42 
                           =========  ===========  =========  =========  ===========  ========= 
 

2 - INFORMATION

The preceding information does not constitute the Company's statutory accounts for the years ended 30 September 2018 or 30 September 2017 but is derived from those accounts. The 2018 accounts are expected to be posted to shareholders on 18(th) February 2019 and will be available from the Company Secretary, LPA Group Plc, Light & Power House, Shire Hill, Saffron Walden, CB11 3AQ and on LPA's website (www.lpa- group.com), shortly thereafter. Statutory accounts for 2017 have been delivered to the Registrar of Companies, and those for 2018 will be delivered following the annual general meeting. The auditors have reported on these accounts and their reports were unqualified and did not contain statements under the Companies Act.

The Chairman's Statement, the Chief Operating Officer's Review, and the Financial Review included in this preliminary announcement form part of the Strategic Report included in the 2018 accounts. The Strategic Report and other content of this preliminary announcement have been prepared solely for the shareholders of the Company as a body. To the extent permitted by law the Company, its directors, officers and employees disclaim liability to any other persons in respect of the information contained in this preliminary announcement. Sections may include statements containing risks and uncertainties facing the Group, and other forward-looking statements, which by their nature involve uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated. The Company undertakes no obligation to update any forward-looking statements.

3 - ANNUAL GENERAL MEETING

The annual general meeting of the Company is to be held at 12 noon on Thursday 21(st) March 2019 at the offices of Instinctif Partners, 65 Gresham Street, London EC2V 7NQ.

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 [e-mail] or visit www.rns.com.

END

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January 24, 2019 02:00 ET (07:00 GMT)