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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Punch Graphix | LSE:PGX | London | Ordinary Share | GB00B07LVS05 | ORD 10P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 122.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
RNS Number:5183R Punch Graphix PLC 20 February 2007 20 February 2007 Punch Graphix plc Preliminary Results for the Year Ended 31 December 2006 Punch Graphix plc ('Punch Graphix' or the 'Company'), the digital and pre-press printing systems group, today announces its preliminary results for the financial year ended 31 December 2006. +----------------------------------+----------------+-------------+------------+ |(in Euro000) | Year ended| Year ended| Percentage| | |31 December 2006| 31 December| | | | | 2005| increase/| | | (unaudited)| (audited)| decrease| +----------------------------------+----------------+-------------+------------+ | | | | | +----------------------------------+----------------+-------------+------------+ |Revenue | 173,340| 158,263| +10%| +----------------------------------+----------------+-------------+------------+ |EBITDA | 41,694| 34,760| +20%| +----------------------------------+----------------+-------------+------------+ |Operating profit* | 22,481| 21,477| +5%| +----------------------------------+----------------+-------------+------------+ |Profit before taxation | 21,212| 18,453| +15%| +----------------------------------+----------------+-------------+------------+ |Net profit (equity interests) | 15,901| 12,424| +28%| +----------------------------------+----------------+-------------+------------+ |Earnings per Share (Eurocents) | 15.5| 13.32| +17%| +----------------------------------+----------------+-------------+------------+ * In accordance with IFRS3, the recognition of deferred tax assets, relating in most part to the acquisition in 2004 of basysPrint GmbH in Boizenburg, Germany, has led to an increase in the depreciation and amortization charge. The effect is to reduce the Operating Result and Result before Tax by some Euro1.8 million. As a result the Group could benefit from the recognition of deferred tax assets. PRELIMINARY STATEMENT Overview 2006 was another year of progress for the Company and the Executive Directors believe that our well balanced business model with high recurring revenues and our presence in both digital and offset sectors is suited to challenge a dynamic and competitive environment. Offer by Punch International On 8 January 2007 Punch international launched a mandatory offer 128p per share for the shares in Punch Graphix that it did not already own. On 23 January 2007, the independent Committee of the Board of Directors issued its statement expressing its reservations regarding the Punch International proposal, considering the Company's past performance. When the offer closed for acceptances on 13 February 2007 Punch International had increased its shareholding in Punch Graphix from 49% to 92.58%. Subsequently, Punch International has stated that it will seek to procure the cancellation of trading on AIM and the admission to trading on Euronext Brussels of Punch Graphix Shares. This is therefore Punch Graphix's last preliminary results statement as an AIM-listed company. The Board of Punch Graphix would like to record its appreciation to shareholders for their support since the Company's Admission to trading on AIM in May 2005. Business Review Results overview 2006 was a very satisfactory year for the Group, with both the high-end digital colour printing systems division (Xeikon) and the computer-to-plate prepress division (basysPrint and OEM) showing healthy development. Group revenue was Euro173.3m, an increase of 9.5% over 2005. Of this, approximately one-third was generated by prepress activities, and approximately two-thirds by digital printing activities. The split between equipment sales and sales of consumables and services was approximately even. The Group operating result was Euro22.5m, an increase of 5% over 2005. In accordance with IFRS3, the recognition of deferred tax assets, relating in most part to the acquisition in 2004 of basysPrint GmbH in Boizenburg, Germany, has led to an increase in the depreciation and amortization charge. The effect is to reduce the Operating Result and Result before Tax by some Euro1.8 million. After taking into account this audit adjustment, which came to light after the preparation of the profit estimate set out in the document dated 22 January 2007 in response to the Punch International offer, the Board confirms that the trading results were in line with that profit estimate. Profit before tax and earnings per share rose by 15% and 16% respectively over 2005. Markets and key drivers During 2006, market conditions remained favourable for Punch Graphix. Digital colour printing was the fastest growing of all printing technologies with a wider range of printers adopting new applications. In addition, ongoing trends such as the increasing use of colour printing and a widening use of personalisation in printed media, have contributed to growth. The CtP equipment market remained fairly stable overall, reflecting a combination of the mature offset markets in Europe and the United States, and the faster growth experienced in Asia and South America. Key drivers for the CtP market included the continuing upgrade of the large installed base of earlier computer-to-film solutions and first generation CtP machines, the search for more productive solutions and the further consolidation of the printing market into large facilities in lower cost geographies such as Asia and South America. Digital printing solutions (Xeikon) Xeikon enjoyed another strong year overall, especially in the sale of consumables. This was driven by systems sold and installed during 2005 coming on stream and, in particular, a number of existing US customers substantially increasing their toner requirements. The number of pages printed by the installed base of Xeikon machines grew by over 25% during the year. The Group launched its new generation digital colour printing system, the Xeikon 6000, in September 2006, in combination with a new toner range (Form Adapted), and a major update to the X-800 digital front-end. The expectation in the market place of the launch of the Xeikon 6000 restricted orders for Xeikon 5000 machines. However, the Xeikon 6000 is helping equipment sales in the high-end part of our targeted market, with the first units being delivered in the later part of 2006. The combination of the Xeikon 6000, the FA toner range and the updated X-800 digital front-end sets a new standard in digital colour printing for speed, productivity, image quality, substrate range and extended applications. These features, combined with favourable printing costs, put Punch Graphix ahead of its competition in this market segment. This was further reinforced early February 2007 by the introduction of the Xeikon 4000 and the Xeikon 5000Plus digital colour printing systems. Prepress solutions Prepress activity was strong throughout the year, particularly in the emerging CtP markets in Asia. The basysPrint approach of combining readily available and cost competitive UV plates and CtP equipment without the need for film has been more widely adopted, indicating greater acceptance of the Group's technology. As a result, unit sales of basysPrint prepress equipment were significantly ahead of 2005. During 2006, basysPrint was chosen as a preferred partner and has entered into a co-marketing agreement with ArtworkSystems, the prepress front-end software market leader. Other arrangements with plate suppliers also helped increase the awareness of, and confidence in, the basysPrint brand. In October 2006, we introduced new optics to the ''Very Large Format'' range which have been well received by the market. They offer clear advantages in terms of speed of imaging and scalability and considerably extend the life of the lighting unit. The extension of the factory in Boizenburg, Germany, which commenced in the summer of 2006, was completed early 2007 and will improve order flow and reduce delivery and installation lead times. Our new facility in Shenzhen, China assembled its first commercial engine in September 2006. We further developed our relationship with our key newspaper market partner, Agfa, in line with agreements entered into in 2005. These provide the Company with greater transparency on orders and allow for a more structured approach to joint product development. Strategy and prospects During 2006, as part of its ongoing growth strategy, the Group invested significantly in plant and machinery to support its expansion program, including new equipment for the toner factory in Heultje, Belgium, the expansion of the Boizenburg CtP factory and the establishment of the facility in Shenzhen, China. The strategy of expanding our own sales and services organisations progressed further in 2006. New approaches to team management were deployed across the Company to focus on continuous improvement through sharing best practice and efficiencies. Empowerment of our people at all levels for business excellence is a key component of our strategy for growth. Productivity levels are expected to increase further through the continued streamlining of the Group. Priorities for 2007 include further upgrading the Group's professional capabilities and enhancements to processes which are vital to the long-term future and growth of Punch Graphix, such as marketing, sales and service, purchasing, production and IT. The Group's commitment to research and development investment has historically resulted in a number of product enhancements and new product launches which have provided the foundation for the ongoing growth and competitiveness of Punch Graphix. We are highly confident about the prospects for Punch Graphix for the current year and beyond. Board Changes In light of the outcome of the Punch International offer, and Punch International's stated intention to implement changes to the composition of the Board, Geoffrey White (Chairman), Ken Humphreys and Nigel McCorkell (both independent non-executive directors) have resigned from the Board with effect from 20 February 2007. The Executive Directors express their recognition for their significant contribution to the development of the Company during their terms in office. At the request of Punch International, the Company has today appointed Philippe Ghekiere to the Board as Non-Executive Chairman and Wim Deblauwe as a Non-Executive Director. Mr Ghekiere , aged 46, is Executive Director and General Counsel of The Capital Markets Company NV since 1999. He is also Vice Chairman of the Board of Kinepolis group NV. Before he was a partner of Allen & Overy. Mr Deblauwe, aged 33, previously worked within Xeikon, being appointed Chief Financial Officer in 2002 and later becoming Vice President Sales and Marketing of Punch Graphix. Following the IPO of Punch Graphix he was appointed Chief Financial Officer of Punch International and since November 2005, he was nominated as Managing Director of the Group. Before joining Xeikon in 2002 he worked in the financial sector for ING. Disclosures required under para (g) of Schedule 2 of the AIM rules are contained within the Board changes announcement issued today. Dividend Following the offer and subsequent increase in shareholding to 92.58% of Punch Graphix by Punch International, the decision on any proposed final dividend for the year to 31 December 2006 will be taken by the Annual General Meeting on 21 May 2007. Financial Review The results published in this statement have been prepared under the International Financial Reporting Standards as adopted by the European Union. The Group reported a strong full second year, in revenue, profit and earnings per share. Trading Revenues increased from Euro158.3m, in 2005, to Euro173.3m in 2006. The majority of this increase was driven by organic growth. The split between digital printing and prepress was 68% against 32%. Compared to the previous year, the split between equipment sales and recurring revenues (sales of consumables for the digital printing machines, spare parts and servicing) grew in favour of the recurring revenue EBITDA (earnings before interest, tax, depreciation and amortisation) increased by 20% from Euro34.6m, in 2005 to Euro41.7m in 2006. In revenue terms this represents a margin of 24%. Operating profit on revenue for the year was Euro22.5m, which represents an increase of 5% on the previous year. The tax charge of Euro5.2m reflects an effective tax rate of 25%. This compares to an effective tax rate of 30% in 2005. The Group has no longer benefited from some material tax losses but could benefit from the recognition of deferred tax assets. Minority interest and earning per share Minority interests decreased further from Euro435,000 in 2005 to Euro101,000. The Group acquired the minority interests in Germany and in Italy. In the reported year, earnings per share increased by more than 16% to 15.5 euro cent. The average number of shares in issue in the calculation of earnings per share was 102.2 million. For 2005, the Company had on average 93.3 million shares in issue. Cash flow Cash flow from operating activities increased from Euro3.9m to Euro27.4m despite an increase in working capital of Euro1.3m. Payables remained stable at Euro20.5m. Improvements to the purchasing process have encouraged more timely payments to suppliers which enable stronger relationships and more advantageous partnership agreements . Events in 2006 such as the Linomedia acquisition and the new products inventory build-up for the Xeikon 6000 and FA toner range justified higher inventory levels at year end. Inventory management remains an operational challenge which has benefited from attention in 2006 and will continue to do so in 2007, particularly through the further reduction of slow moving stocks levels. Capital expenditure was Euro9.5m on tangible assets (improvement and replacement of production equipment and assets held for rental contracts and demonstration equipment). The Heultje and Shenzen investments are completed in 2006 and the extension of Boizenburg facility is completed in 2007. The largest component of investment in intangible assets is to be found in the capitalisation of development activities of Euro7.6m. Cash and short-term investments at the end of the year amounted to Euro39.8m. The results were positively influenced by the market value of our hedging instruments (Financial result of Euro0.9m). Shareholder's funds Shareholders' funds totalled Euro107.9m the increase in the year of Euro12.6m is driven mainly by the retained earnings of Euro12.7m. -Ends- For further information, please contact: Punch Graphix plc + 32 3 443 1911 Ben van Assche, Chief Executive Officer Hogarth Partnership + 44 (0) 207 357 9477 John Olsen / Barnaby Fry Consolidated Balance sheet 31/12/2006 31/12/2005 Euro '000 Euro '000 (Unaudited) (Audited) ----------- ---------- Non Current Assets 89,495 84,817 ----------- ---------- Intangible Assets 27,274 25,152 PPE: Property, Plant & Equipment 53,619 49,973 Investments in associates 221 2,171 Receivables 4,788 6,497 Deferred tax assets 3,593 1,024 ----------- ---------- Current Assets 130,653 108,962 ----------- ---------- Inventories 44,122 32,491 Trade debtors 39,817 34,995 Other amounts receivable 6,189 11,409 Cash and cash equivalents 39,798 30,029 Financial Instruments 727 38 ----------- ---------- TOTAL ASSETS 220,148 193,779 ----------- ---------- Shareholders Equity 107,859 95,403 ----------- ---------- Ordinary Shares 15,029 15,027 Share Premium Account 50,378 50,378 Retained earnings 43,150 30,604 Other Reserves 3,300 3,300 Translation Differences (3,998) (3,906) ----------- ---------- Minority Interests 527 624 ----------- ---------- Total equity 108,386 96,027 ----------- ---------- Non Current Liabilities 47,604 46,187 ----------- ---------- Interest bearing loans & borrowings 43,191 40,932 Deferred tax liabilities 3,198 4,180 Other Liabilities 1,215 1,075 ----------- ---------- Current Liabilities 64,158 51,565 ----------- ---------- Trade payables 20,464 21,457 Other current payables 23,831 20,715 Current tax liabilities 7,020 4,025 Borrowings 10,810 2,848 Provisions 1,920 2,190 Financial instruments 113 330 ----------- ---------- TOTAL LIABILITIES AND EQUITY 220,148 193,779 ----------- ---------- Consolidated income statement 31/12/2006 31/12/2005 Euro '000 Euro '000 (Unaudited) (Audited) ----------- ---------- Total Sales 164,439 153,210 Other Operating Income 8,901 5,053 ----------- ---------- TOTAL REVENUES 173,340 158,263 ----------- ---------- Change in inventories 13,798 2,952 Purchases (78,403) (69,066) Salaries & employee benefits (35,855) (29,963) Depreciation & amortisation (15,906) (10,167) Impairment losses on current assets (3,307) (3,117) Other operating charges (31,185) (27,425) ----------- ---------- TOTAL OPERATING EXPENSES 150,858 136,786 ----------- ---------- OPERATING RESULT 22,481 21,477 ----------- ---------- Finance Income 3,009 1,329 Finance Cost (4,161) (4,084) Share of results of associates (118) (269) ----------- ---------- RESULT BEFORE TAX 21,212 18,453 ----------- ---------- Taxes (5,210) (5,594) ----------- ---------- NET RESULT 16,002 12,859 ----------- ---------- Net result - Equity interest 15,901 12,424 Net result - Minority interest 101 435 Earnings per share (Eurocents) (see note) 15.5 13.3 ----------- ---------- Note: The earnings per share are calculated on the basis of a weighted average number of ordinary shares in issue during the period of 102,241,327 (2005: 93,258,058) Consolidated Cash Flow Statement 2006 2005 Euro'000 Euro'000 (Unaudited) (Audited) -------- -------- Profit before tax 21,212 18,453 Operating activities: Impairment losses (goodwill) - 265 Depreciation 15,906 10,167 Provisions (271) 143 Inventories (7.498) (4,398) Trade and other receivables 13.074 (13,482) Trade and other payables (6.918) (4.202) Net finance charges (P&L) (1,152) 2.753 Profit on sale of fixed assets 575 (257) Share of results of associates 118 269 Interest paid (cash) (3,930) (3,792) Tax paid (3,656) (1.975) -------- -------- Net cash from operating activities 27.460 3,944 -------- -------- Investing activities Cash to acquire subsidiary (1.714) (497) Cash acquired of the sale of associates 30 - Purchase of property, plant & equipment (9,488) (7,951) Proceeds from sale of property, plant & 2,270 4,352 equipment Own work capitalised of intangible (7,608) (5.386) assets Purchase of intangible assets (1,473) (901) Interest received (cash) 1,961 1,329 -------- -------- Net cash used in investing activities (16,022) (9.054) -------- -------- Financing activities Proceeds from the issue of share capital - 28.311 Capital element of finance leases paid (1,310) (4.798) Capital element of finance leases 1,286 - received Proceeds from new loans & borrowings 9.542 6.440 Reimbursement of loans & borrowings (7.442) - Dividends paid to shareholders (3,899) - -------- -------- Net cash from financing activities (1,823) 29.953 -------- -------- Foreign exchange 154 128 -------- -------- Total movement in cash 9,769 24.971 -------- -------- Cash and cash equivalents: At the beginning of the period 30,029 5,058 At the end of the Period 39,798 30,029 Movement 9,769 24.971 -------- -------- Notes to the Financial Statements 1. Basis of accounting The financial information for the year ended 31 December 2006 (the 'Financial Information') has been prepared in accordance with the accounting policies applied in the 2005 Annual Report which are consistent with the accounting policies that will be applied in the 2006 Annual Report. The financial information set out in this preliminary announcement does not constitute the company's statutory accounts for the year ended 31 December 2006 or 2005. The financial information for the year ended 31 December 2005 is derived from the statutory accounts for that year, which have been delivered to the registrar of companies. The auditors reported on those accounts; their report was unqualified and did not contain a statement under s237 (2) or (3) of the Companies Act 1985. The statutory accounts for the year ended 31 December 2006 will be finalised on the basis of the financial information presented in this preliminary announcement and delivered to the registrar of companies following the annual general meeting. This Preliminary Announcement was approved by the Board of Directors on 19 February 2007. The Financial Information for the year to 31 December 2006 is unaudited. This information is provided by RNS The company news service from the London Stock Exchange EN FR TLMMTMMABTTR
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