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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Tgi | LSE:TGI | London | Ordinary Share | GB0008687369 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.00 | - |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:4052G
TGI PLC
5 July 2001
TGI plc
("TGI" or "the Group")
Preliminary Results for the year ended 31 March 2001
Highlights
TGI designs, manufactures and markets loudspeakers for the
Professional Audio, Consumer Hi-fi and Automotive OEM markets.
It's main brands are Tannoy, Martin Audio and Lab Gruppen.
2001 2000
Turnover #44.5m* #44.4m
Operating profit #2.1m* #2.5m
Profit before tax #0.1m #2.4m
Headline earnings per share 5.7p 8.9p
Final dividend per share 2.6p 2.6p
* from continuing operations including acquisitions
- Lab Gruppen acquisition successfully integrated and
performing ahead of expectations.
- Strong performance from Professional audio business -
Martin Audio and Tannoy make further advances into North
American market following successful marketing strategies.
- Continued focus on higher margin, branded business helps
to offset continued tough trading conditions of Automotive
business.
- Tight cost control in Automotive business helps to
minimise impact of a soft market.
Michael Windsor, Chairman, commented: "We believe the changes
made to the Group's business profile during the year will
improve TGI's quality of earnings in the future as our
strategy of focusing on the development of our Professional
and Hi-Fi brands in international markets continues. We are
confident that we will report a satisfactory trading
performance for the full year.
Enquiries:
TGI plc 023 9249 2555
Nigel Hamilton, Chief Executive
Peter Russell, Finance Director
Square Mile BSMG Worldwide 020 7601 1000
Kevin Smith/Edward Macquisten
Chairman's Statement
The year started well as outlined in the interim statement.
Our Professional and Hi-Fi businesses enjoyed good growth year
on year, bolstered by the acquisition of the Lab Gruppen
professional business in July 2000. However, as we
highlighted in April's trading statement, the final quarter of
the year proved more difficult, particularly for our
Automotive and Audix businesses, and the last quarter was
softer for our Hi-Fi and Professional businesses.
The acquisition of Lab Gruppen, a Swedish based digital
amplifier business, is proving to be an excellent strategic
fit both in terms of it's technology and in terms of the
future sales and profit potential.
Results
Total Group sales increased to #47.0m (2000: #46.8m). Sales
from continuing operations including acquisitions increased
slightly to #44.5m (2000: #44.4m). Discontinued sales of #2.5m
(2000: #2.4m) relate to the disposal of Audix, the non-core
public address business. Lab Gruppen, acquired in July 2000
contributed sales of #2.2m.
Operating profit from continuing businesses including
acquisitions reduced to #2.1m (2000: #2.5m), reflecting the
severe decline in the Automotive business. This was partially
offset by increased profits at our Hi-Fi and Professional
businesses and by the Lab Gruppen acquisition which made an
excellent maiden profit contribution of #462,000.
The Audix public address business was sold in March for an
aggregate cash consideration of #900,000. Proceeds from the
sale were used to reduce the Group's borrowings. As a result
of the write-off of goodwill of #1.8m arising from the
disposal of Audix profit before tax was #0.1m (2000: #2.4m).
This charge for goodwill is a non-cash item and has previously
been charged against Group reserves.
Loss per share was 1.8p (2000: earnings per share of 8.9p),
resulting from the lower profits and, in particular, the write-
off of goodwill arising on the disposal of Audix. Headline
earnings per share were 5.7p (2000: 8.9p).
The slowdown experienced in the final quarter, together with
decisions to carry higher stocks in some of our businesses and
the acquisition, has meant that we ended the year with higher
than normal inventories. We plan to reduce these in the
course of the current year.
Gearing at the year-end was comfortable at 23% (2000: nil)
although we intend to reduce the overall level of debt in the
year ahead.
The continued strength of sterling relative to the Euro has
also impeded progress on sales growth and margins across all
our businesses.
Dividend
The Board is recommending a maintained final dividend of 2.6p
per share giving a total for the year of 3.8p per share (2000:
3.8p). The final dividend will be paid on 23 August 2001 to
shareholders on the register at the close of business on 27
July 2001.
Employees
I would like to thank all the Group's employees for their
continued dedication and commitment to the Group without which
the progress achieved this year would not have been possible.
Shareholder Value
Your Board believes that the current TGI share price
significantly undervalues the Group and, in particular, does
not reflect the intrinsic value of its Hi-Fi and Professional
businesses. The acquisition of Lab Gruppen and the disposal
of Audix were steps in a programme of enhancing shareholder
value. The Board, together with its professional advisers,
will continue to focus on enhancing and maximising shareholder
value and all options will be considered.
Prospects
We believe the changes made to the Group's business profile
during the year will improve TGI's quality of earnings in the
future as our strategy of focusing on the development of our
Professional and Hi-Fi brands in international markets
continues.
Against a challenging set of worldwide economic conditions,
the Group has had a mixed start to the year, but we are
confident that we will report a satisfactory trading
performance for the full year.
Michael Windsor
Chairman
5 July 2001
Chief Executive's Review
Overview
For some time, the Group's strategic objective has been to
grow the proportion of sales derived from its Professional and
Hi-Fi businesses relative to the whole. Significant progress
has been made towards this objective by expanding the scale
and scope of our Professional business and focusing on Tannoy
as a single worldwide Hi-Fi brand. This strategy continued to
yield results for the Group during the year as Tannoy, Martin
Audio and our sales operations in North America and the
Netherlands, all reported increased sales, and commensurate
profit performances. However, the difficulties within our
Automotive and Audix businesses, together with softer sales in
the final quarter, served to reduce the Group result.
Professional
Growth in the Professional loudspeaker market remained robust
and the Group's Professional operations delivered a strong
performance. Both Martin Audio and Tannoy continued to make
strong advances in North America, the world's largest
professional market, and Martin made further good progress in
China.
Our strategy for the Professional business is working well and
the acquisition of Lab Gruppen in July 2000 has accelerated
sales and profit growth. Lab Gruppen made a significant first
time profit contribution. The disposal of the Audix public
address business in March 2001 has removed a significant
management distraction and will also have a positive effect on
the Group's quality of earnings going forward.
TGI North America relocated to a new larger facility to
accommodate the continued growth of its Professional business.
During the period Martin successfully rolled-out the Blackline
product range to all world markets, and continued to enjoy
good offtake for the Wavefront series. In addition a new
sector was entered with the launch of the first of a Stadium
series.
Tannoy enjoyed early success with its Quickfit ceiling
speaker, the CMS501CT which provides a premium sound and is
easy and quick to install and adjust. The unique iQ10
PowerDual product, which incorporates both Tannoy's Dual
Concentric Technology and Funktion One's patented Axhead
technology, was launched in the final quarter. This
combination of two leading edge technologies gives superior
sound quality for music and speech reinforcement in live and
fixed installations. In addition, a range of Tannoy branded
Professional installation microphones was launched extending
Tannoy's Professional offering.
Lab Gruppen launched the new iP range of amplifiers aimed at
the installation market.
We plan to accelerate the development of our Professional
business worldwide, and further investments are being made in
sales, marketing, and research, as well as product
development.
Hi-Fi
Sales for our Tannoy global Hi-Fi brand increased strongly for
the year, with products such as the Mercury, Mx and Saturn
ranges selling strongly in the Group's main markets.
Hi-Fi sales in North America advanced strongly during the year
and Japan continued to perform well with such products as the
SuperTweeter and the new Autograph range. However, sales to
China were disappointing. The strength of Sterling relative
to the Euro contributed to a disappointing performance in
Mainland Europe, which is now one of our main sales priorities
for Hi-Fi with improvements in our distribution arrangements
planned.
During the year, we introduced the new Dimension range, a
premium product designed to appeal to all world markets.
Following a successful launch which attracted excellent
technical reviews, units are shipping to all main markets and
we expect the Dimension range to spearhead growth in both
North America and Europe.
Product development work is well advanced on a further
mid/premium range, which we expect to launch later in 2001.
This range, together with the Dimension series, is targeting a
higher margin market segment in line with our strategic aim of
establishing a strong position for the Tannoy brand.
Automotive
Our Automotive business had a tough year and reported a
disappointing final result. Nevertheless, strategic progress
was made in a number of key areas.
A significant decline in sales was anticipated and planned for
and the impact of lower sales was partly mitigated by
aggressive cost control and maximum utilisation of our lower
cost Hungarian operation. In addition a further restructuring
was implemented during the year at a cost of #250,000.
Although market conditions continue to be difficult and highly
competitive, the supply of several new contracts commenced
during the period, including the new BMW Mini and a range of
surround sound TV speakers for Toshiba. Sales of the
Volkswagen Sharan, Peugeot 206 and Ford Galaxy were good
during the period but Rover offtake was well below
expectations.
In addition, new contracts for future years were secured but
these will necessitate investments in the short term.
Further new contract opportunities are being actively pursued.
With manufacturing facilities in the UK and Hungary, new sales
offices in France and North America and new manufacturing
partnerships in place to cover potential supply requirements
in the Far East and South America we are able to take an
increasingly global approach to new contract bidding.
We expect trading conditions for the Automotive business to
remain difficult in the current financial year.
Research and Development
During the year we invested #1.7m in Research and Development,
representing 3.6% (2000: 2.9%) of sales. The primary focus
remained on new product flows.
In addition, Tannoy's research effort has, we believe, given
us an industry leadership position in WideBand Technology,
which is marketed as our SuperTweeter range.
Nigel Hamilton
Chief Executive
TGI plc
Consolidated Profit and Loss Account
For the year ended 31 March 2001
Year ended Year ended
31 March 31 March
2001 2000
Notes #000 #000
Turnover
Continuing operations (including
acquisitions of #2,193,000 (2000: nil)) 44,469 44,381
Discontinued operations 2,545 2,426
__________ _________
Total Turnover 47,014 46,807
Cost of sales (34,128) (33,742)
__________ _________
Gross profit 12,886 13,065
Distribution Costs (5,470) (5,105)
Administration expenses (5,504) (5,499)
Other operating income 96 47
__________ _________
Operating profit/(loss)
Continuing operations (including
acquisitions of #462,000 (2000:nil)) 2,069 2,534
Discontinued operations (61) (26)
__________ _________
Total operating profit 2,008 2,508
Profit on the sale of fixed assets
- continuing operations 128 -
Loss on the sale of subsidiary undertaking
- discontinued operations (1,686) -
__________ _________
Profit on ordinary activities
before interest 450 2,508
Net interest payable (346) (126)
__________ _________
Profit on ordinary activities
before taxation 104 2,382
Taxation
On exceptional items (12) -
Other (2) (485) (427)
__________ _________
Total taxation (497) (427)
__________ _________
(Loss)/profit on ordinary
activities after taxation (393) 1,955
Minority interests (5) (35)
__________ _________
(Loss)/profit for the financial year (398) 1,920
Dividends (4) (823) (823)
__________ _________
Retained (loss)/profit for the year (1,221) 1,097
__________ _________
(Loss)/earnings per share (3) (1.8p) 8.9p
Diluted (loss)/earnings per share (1.8p) 8.9p
Headline earnings per share 5.7p 8.9p
Discontinued operations are wholly in respect of Tannoy Audix Systems Ltd.
TGI plc
Consolidated Balance Sheet
As at 31 March 2001
As at As at
31 March 31 March
2001 2000
Notes #000 #000
Fixed assets
Tangible assets 3,132 3,088
Goodwill (A) 1,837
_______ _______
4,969 3,088
======= =======
Current assets
Stocks and work in progress 9,311 6,891
Debtors 8,343 7,840
Cash at bank and in hand - 2,298
_______ _______
17,654 17,029
Creditors: amounts falling due
within one year (10,581) (8,655)
_______ _______
Net current assets 7,073 8,374
_______ _______
Total assets less current liabilities 12,042 11,462
Creditors: amounts falling due
after more than one year (266) (382)
Provisions for liabilities and charges (147) (67)
_______ _______
Net assets 11,629 11,013
======= =======
Capital and reserves
Called up share capital 217 217
Share premium account 5,352 5,352
Capital redemption reserve 604 604
Other reserves 596 596
Profit and loss account 4,623 4,012
______ _______
Equity shareholders' funds 11,392 10,781
Minority interests (equity and 237 232
non-equity) ______ _______
11,629 11,013
====== =======
TGI plc
Consolidated Cash Flow Statement
For the year ended 31 March 2001
Notes 2001 2000
#000 #000 #000 #000
Operating activities
Net cash inflow from continuing
operating activities 450 3,811
Net cash (outflow)/inflow from
discontinued operating activities (45) 60
______ ______
405 3,871
Returns on investments and
servicing of finance
Interest paid (331) (104)
Interest element of finance lease
repayments (20) (25)
Interest received 5 3
______ ______
(346) (126)
Taxation (629) (99)
Capital expenditure
Purchase of fixed assets (1,263) (851)
Sale proceeds from fixed assets - 7
Sale of Coatbridge land 197 -
______ ______
(1,066) (844)
Acquisitions & Disposals
Acquisition of subsidiary (A) (2,560) -
Disposal of subsidiary (B) 900 -
Equity dividends paid (823) (791)
_______ _______
Net cash (outflow)/inflow before
financing (4,119) 2,011
Financing
Issue of ordinary share capital - -
Purchase of own shares - -
Capital payments on finance leases (104) (222)
Capital payments on bank loans (11) (11)
_______ ______
(115) (233)
_______ ________
(Decrease)/increase in cash in year (4,234) 1,778
======= ========
TGI plc
Reconciliation of net cash flow to movement in net debt
2001 2000
#000 #000
(Decrease)/increase in cash in year (4,234) 1,778
Cash flow from change in debt and lease financing 115 233
_______ _______
Change in net debt resulting from cash flows (4,119) 2,011
New finance leases - (176)
Translation differences (16) 8
_______ _______
Movement in net debt in the year (4,135) 1,843
Net cash at 1 April 2000 1,514 (329)
_______ _______
Net (debt)/cash at 31 March 2001 (2,621) 1,514
======= =======
Notes to the Consolidated Cash Flow Statement
A. Acquisition
On 6 July 2000, the Group acquired Lab Gruppen, a company registered in
Sweden.
#000
Tangible fixed assets 56
Stocks 599
Debtors 681
Creditors (573)
Taxation (112)
Net overdraft (105)
Loans (281)
Goodwill 1,909
______
Cost of acquisition 2,174
======
Satisfied by:
Cash 2,111
Cash costs of acquisition 63
______
2,174
Net overdraft and loans acquired 386
______
Cash outflow on acquisition 2,560
======
Lab Gruppen contributed #559,000 to the Group's net operating cash flow
and applied #19,000 on servicing of finance, #38,000 in respect of taxation
and #38,000 on fixed assets.
B. Disposal
On 30 March 2001, the Group sold Tannoy Audix Systems Ltd
#000
Tangible fixed assets 134
Stocks 303
Debtors 680
Creditors (432)
Loan due to TGI (900)*
______
Book value of disposal (215)
______
*On 30th March 2001, the purchaser assumed and repaid in cash the loan due to
TGI of #900,000.
Tannoy Audix Systems Ltd applied #45,000 from the Group's net operating cash
flows and further applied #62,000 on fixed assets.
Notes:
1. The financial information set out above does not
constitute the Company's statutory accounts for the
years ended 31 March 2001 and 2000. The financial
information for 2000 is derived from the statutory
accounts for 2000 which have been delivered to the
Registrar of Companies. The auditors have reported
on the 2000 accounts, their report was unqualified
and did not contain a statement under Section 237
(2) or (3) of the Companies Act 1985. The statutory
accounts for 2001 will be finalised on the basis of
the financial information presented by the directors
in this preliminary announcement and will be
delivered to the Registrar of Companies following
the Company's Annual General Meeting.
2. The tax charge for the year of #497,000 reflects the
utilisation of previously written off ACT.
3. (Loss)/earnings per share and diluted earnings per
share have been calculated by reference to loss for
the financial year ended 31 March 2001 of #398,000
(2000: profit of #1,920,000) and the weighted
average number of Ordinary shares in issue for the
year of 21,657,497 (2000: 21,657,497).
Headline earnings per share excludes major non-
recurring items in accordance with the guidelines
from the Institute of Investment Management and
Research.
4. The final dividend of 2.6p per Ordinary share will,
if approved, be payable on 23 August 2001, to
shareholders registered on 27 July 2001. The ex-
dividend date is 25 July 2001.
5. The Annual Report and Accounts will be sent to
shareholders on or before 16th July 2001. Further
copies will be available from the registered office
of TGI plc, 3 Ridgway, Havant, Hampshire PO9 1JS.
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