|
|
25 September 2012 |
Eleco PLC
("Eleco" or the "Group")
The Construction Software and Building Systems Group
Interim Results
for the 6 Month Period Ended 30 June 2012
Financial Performance - Continuing Operations
· Revenue £18.4m (H1 2011: £18.3m restated)
· Operating profit £48,000 before exceptional items of £316,000 (H1 2011: loss of £334,000 before exceptional items of £195,000 restated)
· Loss from operations £268,000 (H1 2011: loss £529,000 restated)
· Loss before tax £480,000 (H1 2011: loss £660,000 restated)
· Loss per share - basic and diluted 1.0p (H1 2011: loss 1.4p restated)
Reduction in Group Borrowings
· Net bank borrowings at 30 June 2012: £5.3m (30 June 2011: £8.6m)
· Deferred consideration receivable held in Escrow at 30 June 2012: £1.2m (30 June 2011: £nil)
ElecoSoft®
· Turnover £8.2m (H1 2011: £8.5m)
· Operating profit before exceptional items £903,000 (H1 2011: £876,000)
ElecoBuild®
· Turnover £10.1m (H1 2011: £10.3m)
· Operating loss before exceptional items £418,000 (H1 2011: loss £655,000)
Strategy and Outlook
· Eleco's strategy of reducing costs and capacity in its building systems businesses to bring them more into line with reduced demand in the UK construction industry together with its effort to reduce its risk profile by continuing to invest in its profitable software interests has resulted in a small profit from continuing operations for the six months ended 30 June 2012.
· Although the closer co-ordination of the Group's precast concrete operations in the first half resulted inevitably in additional exceptional costs, it is anticipated that these changes will deliver operating and financial benefits in the second half.
Executive Chairman, John Ketteley said:
"The past three years have been about steering Eleco through financial and trading conditions, the severity of which have been unprecedented. These conditions have abated to a degree, but continue to be challenging. Against this background, our management have had to take some very difficult decisions and actions in their efforts to return Eleco to profitability and they remain committed to achieving this objective, for the benefit of shareholders and employees alike.."
"I continue to believe that further to our restructuring, Eleco is well placed to take advantage of improvements in the markets it serves and I look forward to our capturing the benefits of these changes over the coming months."
For further information please contact:
|
Eleco plc |
0207 422 0044 |
|
John Ketteley, Executive Chairman |
|
|
Matthew Turner, Group Finance Director |
|
|
Peckwater PR - Tarquin Edwards |
0207 808 7340 |
|
Cenkos Securities plc - Adrian Hargrave |
0207 397 8900 |
Chairman's Statement
Group turnover for the 6 months ended 30 June 2012 improved slightly to £18.4m (H1 2011: £18.3m restated), an increase of 1 per cent compared with the same period last year.
Revenue of our building systems businesses in the UK ("ElecoBuild") in the period under review was £10.1m (H1 2011: £10.3m), due mainly to reduced levels of turnover from precast concrete student accommodation and hotel projects. However, this was partly offset by higher turnover in our standard precast concrete products and metal roofing and cladding products businesses.
Turnover of our software businesses in Sweden, Germany and the UK ("ElecoSoft") reduced marginally to £8.2m (H1 2011: £8.5m), due partly to the weakening of the Euro against Sterling but also due to lower than anticipated turnover in the UK. ElecoSoft's share of Group turnover in the period was 45 per cent (H1 2011: 46 per cent)
Adjusted Group Operating Profit improved to £48,000 (H1 2011: Loss £334,000), after the deduction of product development costs and the amortisation of intangible assets, but before restructuring costs. Software development costs were higher though at £1,118,000 (H1 2011: £952,000) although amortization of intangible assets relating to software were lower at £206,000 (H1 2011: £296,000)
Restructuring costs of £316,000 (H1 2011: £195,000) during the period under review were incurred following the reduction in capacity of our loss making precast concrete businesses. Regrettably, this change in the business saw the need for significant redundancies across both management and production employees at Bell & Webster Concrete and Milbury Systems. The process also involved the formation of ElecoPrecast and the appointment to it of John Stothard and Carol Lound as Managing Director and Finance Director respectively. Initial indications suggest that the restructuring exercise is delivering the benefits we anticipated.
Net finance costs for the period reflect principally the increased utilisation of the Group's banking facilities, higher interest charges and the net return on the pension scheme assets and liabilities. In the case of ElecoBuild, finance costs amounted to £430,000 (H1 2011 £240,000); and in the case of ElecoSoft, finance costs were £50,000 (H1 2011: £22,000); and Corporate was credited with £268,000 of interest (H1 2011: £131,000)
The loss before tax from continuing operations and after exceptional restructuring costs of £316,000 (H1 2011: £195,000) was £480,000 (H1 2011: £660,000)
The Group loss for the period amounted to £607,000, equivalent to 1.0p per share (H1 2011:£847,000, equivalent to 1.4p per share). The loss for the period from discontinued operations was significantly lower at £252,000, equivalent to 0.4p per share, compared with the loss for H1 2011 of £2,789,000, equivalent to 4.7p per share. Accordingly the loss per share from total operations fell from 6.1p in the period ended 30 June 2011 to 1.4p for the period ended 30 June 2012.
The Group saw a pleasing and substantial 38 per cent reduction in its net bank debt during the period to £5.3m (2011: £8.6m). Eleco is also the beneficiary of an Escrow Account of £1.2m regarding the sale of its timber engineering businesses of which £400,000 is payable in December 2012 and £800,000 in December 2013.
In the period under review, a further cash contribution of £402,000 (H1 2011 £402,000) was made to the defined benefit pension scheme that closed to future accrual in December 2009.
Dividend
With the Group not yet having returned to profit, the Board is not in a position to recommend the payment of an interim dividend. However, the Board will keep its future dividend policy closely under review and will consider a return to recommending dividend payments as and when the Company's trading position and performance permits.
Financial Review
Despite the Group's solid progress in reducing its fixed costs and restructuring certain businesses, its financial performance during the period under review was behind Board expectations. This is in large part a reflection of the time lag that exists between the implementation of our precast concrete restructuring plan and the realisation of its anticipated benefits.
Pension Scheme
On 10 September 2012, Eleco plc received notification from the Trustees of The Eleco Retirement Benefit Scheme ("the Scheme") of an obligation arising under Sections 75 and 75A of the Pensions Act 1995, pursuant to which, Eleco plc, the parent company of the Group, was required to discharge an obligation of £595,000, as certified by the Scheme Actuary, for the purpose of funding that proportion of the deficit of the Scheme that was attributable to past employees of Eleco plc, who were members of the Scheme as at 31 March 2006, together with an appropriate proportion of liabilities relating to orphan beneficiaries of the Scheme as at that date.
Eleco plc discharged this obligation on 21 September 2012 by the payment of £595,000 to the Scheme and the Board has been advised that accordingly, by law, Eleco plc is no longer a Statutory Employer of the Scheme under Section 75 and 75A of the Pensions Act 1995 and Part 3 of the Pensions Act 2004 and that as a consequence, Eleco plc will no longer be directly responsible for funding the Scheme's current deficit or future funding, or for the payment of expenses incurred by the Scheme; Bell & Webster Concrete Limited, SpeedDeck Building Systems Limited, Stramit Panel Products Limited and Eleco (GNS) Limited continue as Statutory Employers of the Scheme.
Outlook
More than three quarters of ElecoSoft's profits were made in the Swedish and German markets, but our UK software interests experienced difficult trading conditions in the UK due to a continuing lack of demand in the construction industry, which affected its performance. Looking forward, our software teams have the flair, creativity and technology, to produce well-designed and relevant software programs and we are confident that with good management and marketing, ElecoSoft will now be able to take advantage of opportunities for further profitable expansion as they arise.
The period under review saw the restructuring of our Precast Concrete interests as well as a welcome improvement in the performance of our roofing and cladding operations. However this improvement was not sufficient to return ElecoBuild to profit in the period. ElecoBuild's costs and production capacity over the past three years have been substantially reduced so as to bring them into line with the lower levels of activity in the UK construction industry and as a consequence, we believe that ElecoBuild is now in a better position to respond and take advantage of an upturn in demand.
The past three years have been about steering Eleco through financial and trading conditions, the severity of which have been unprecedented. These conditions have abated to a degree, but continue to be challenging. Against this background, our management have had to take some very difficult decisions and actions in their efforts to return Eleco to profitability and they remain committed to achieving this objective, for the benefit of shareholders and employees alike.
I continue to believe that further to our restructuring, Eleco is well placed to take advantage of improvements in the markets it serves and I look forward to our capturing the benefits of these changes over the coming months.
John Ketteley
Executive Chairman
25 September 2012
Condensed Consolidated Income Statement
for the financial period ended 30 June 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6 months to 30 June |
|
18 months ended |
|
||
|
|
|
|
|
|
2012 |
|
2011 |
|
31 December |
|
|
|
|
|
|
|
(unaudited) |
|
(unaudited) |
|
2011 |
|
|
|
|
|
|
Notes |
£'000 |
|
£'000 |
|
£'000 |
|
|
|
Revenue |
|
|
3 |
18,354 |
|
18,255 |
|
56,822 |
|
|
|
Cost of sales |
|
|
(8,879) |
|
(8,554) |
|
(27,220) |
|
|
|
|
Gross profit |
|
|
|
9,475 |
|
9,701 |
|
29,602 |
|
|
|
Distribution costs |
|
|
(948) |
|
(1,435) |
|
(4,651) |
|
|
|
|
Administrative expenses |
|
|
(8,479) |
|
(8,600) |
|
(24,808) |
|
|
|
|
Operating profit/(loss) before exceptionals |
48 |
|
(334) |
|
143 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exceptional items |
|
5 |
(316) |
|
(195) |
|
(365) |
|
|
|
|
Loss from operations |
|
3 |
(268) |
|
(529) |
|
(222) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance income |
|
6 |
24 |
|
27 |
|
96 |
|
|
|
|
Finance cost |
|
|
6 |
(236) |
|
(158) |
|
(804) |
|
|
|
Loss before tax |
|
|
(480) |
|
(660) |
|
(930) |
|
|
|
|
Tax |
|
|
|
(127) |
|
(187) |
|
(279) |
|
|
|
Loss for the financial period from continuing operations |
|
(607) |
|
(847) |
|
(1,209) |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the financial period from discontinued operations |
4 |
(252) |
|
(2,789) |
|
(1,528) |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the financial period |
|
(859) |
|
(3,636) |
|
(2,737) |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
|
|
|
|
|
|
Equity holders of the parent |
|
(859) |
|
(3,636) |
|
(2,737) |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share - basic and diluted |
|
|
|
|
|
|
|
||
|
|
Continuing operations |
|
7 |
(1.0) |
p |
(1.4) |
p |
(2.0) |
p |
|
|
|
Discontinued operations |
|
7 |
(0.4) |
p |
(4.7) |
p |
(2.6) |
p |
|
|
|
Total operations |
|
7 |
(1.4) |
p |
(6.1) |
p |
(4.6) |
p |
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statement of Comprehensive Income
for the financial period ended 30 June 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6 months to 30 June |
|
18 months ended |
|
||
|
|
|
|
|
|
|
2012 |
|
2011 |
|
31 December |
|
|
|
|
|
|
|
|
(unaudited) |
|
(unaudited) |
|
2011 |
|
|
|
|
|
|
|
|
£'000 |
|
£'000 |
|
£'000 |
|
|
|
Loss for the period |
|
|
|
(859) |
|
(3,636) |
|
(2,737) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income |
|
|
|
|
|
|
|
|
||
|
|
Actuarial (loss)/gain on retirement benefit obligation |
|
(367) |
|
(119) |
|
3,720 |
|
|||
|
|
Deferred tax on retirement benefit obligation |
|
|
(11) |
|
(126) |
|
(1,461) |
|
||
|
|
Other losses on retirement benefit obligation |
|
|
- |
|
- |
|
(493) |
|
||
|
|
Translation differences on foreign currency net investments |
|
(26) |
|
(98) |
|
(220) |
|
|||
|
|
Other comprehensive income net of tax |
|
|
(404) |
|
(343) |
|
1,546 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the period |
|
(1,263) |
|
(3,979) |
|
(1,191) |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
|
|
|
|
|
|
|
Equity holders of the parent |
|
|
|
(1,263) |
|
(3,979) |
|
(1,191) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statement of Changes in Equity
for the financial period ended 30 June 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital |
Share premium |
Merger reserve |
Translation reserve |
Other reserve |
Retained earnings |
Total |
|
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
At 1 January 2012 |
6,066 |
6,396 |
7,371 |
(113) |
(358) |
(5,207) |
14,155 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transactions with owners |
- |
- |
- |
- |
- |
- |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the period |
- |
- |
- |
- |
- |
(859) |
(859) |
|
|
|
Other comprehensive income: |
|
|
|
|
|
|
|
|
|
|
Actuarial loss on defined benefit pension scheme net of tax |
- |
- |
- |
- |
- |
(378) |
(378) |
|
|
|
Exchange differences on translation of net investments in foreign operations |
- |
- |
- |
(26) |
- |
- |
(26) |
|
|
|
Total comprehensive income for the period |
- |
- |
- |
(26) |
- |
(1,237) |
(1,263) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 30 June 2012 (unaudited) |
6,066 |
6,396 |
7,371 |
(139) |
(358) |
(6,444) |
12,892 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital |
Share premium |
Merger reserve |
Translation reserve |
Other reserve |
Retained earnings |
Total |
|
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
At 1 January 2011 |
6,066 |
6,396 |
7,371 |
217 |
(358) |
(4,889) |
14,803 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transactions with owners |
- |
- |
- |
- |
- |
- |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the period |
- |
- |
- |
- |
- |
(3,636) |
(3,636) |
|
|
|
Other comprehensive income: |
|
|
|
|
|
|
|
|
|
|
Actuarial loss on defined benefit pension scheme net of tax |
- |
- |
- |
- |
- |
(245) |
(245) |
|
|
|
Exchange differences on translation of net investments in foreign operations |
- |
- |
- |
(98) |
- |
- |
(98) |
|
|
|
Total comprehensive income for the period |
- |
- |
- |
(98) |
- |
(3,881) |
(3,979) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 30 June 2011 (unaudited) |
6,066 |
6,396 |
7,371 |
119 |
(358) |
(8,770) |
10,824 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital |
Share premium |
Merger reserve |
Translation reserve |
Other reserve |
Retained earnings |
Total |
|
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
At 1 July 2010 |
6,066 |
6,396 |
7,371 |
107 |
(358) |
(4,236) |
15,346 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transactions with owners |
- |
- |
- |
- |
- |
- |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the period |
- |
- |
- |
- |
- |
(2,737) |
(2,737) |
|
|
|
Other comprehensive income: |
|
|
|
|
|
|
|
|
|
|
Actuarial gain on defined benefit pension scheme net of tax |
- |
- |
- |
- |
- |
1,766 |
1,766 |
|
|
|
Exchange differences on translation of net investments in foreign operations |
- |
- |
- |
(220) |
- |
- |
(220) |
|
|
|
Total comprehensive income for the period |
- |
- |
- |
(220) |
- |
(971) |
(1,191) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 December 2011 |
6,066 |
6,396 |
7,371 |
(113) |
(358) |
(5,207) |
14,155 |
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Balance Sheet
at 30 June 2012
|
|
|
|
|
|
|
30 June |
|
|
|
||
|
|
|
|
|
|
|
2012 |
|
2011 |
|
31 December |
|
|
|
|
|
|
|
|
(unaudited) |
|
(unaudited) |
|
2011 |
|
|
|
|
|
|
|
Notes |
£'000 |
|
£'000 |
|
£'000 |
|
|
|
Non-current assets |
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
|
|
13,622 |
|
13,425 |
|
13,567 |
|
|
|
Other intangible assets |
|
|
|
2,129 |
|
2,592 |
|
2,338 |
|
|
|
|
Property, plant and equipment |
|
|
7,570 |
|
8,863 |
|
7,909 |
|
||
|
|
Deferred tax assets |
|
|
|
1,194 |
|
2,065 |
|
1,289 |
|
|
|
|
Other non-current assets |
|
|
|
865 |
|
- |
|
800 |
|
|
|
|
Total non-current assets |
|
|
25,380 |
|
26,945 |
|
25,903 |
|
||
|
|
Current assets |
|
|
|
|
|
|
|
|
|
|
|
|
Inventories |
|
|
|
|
2,254 |
|
3,526 |
|
2,281 |
|
|
|
Trade and other receivables |
|
|
7,084 |
|
11,335 |
|
8,394 |
|
||
|
|
Current tax assets |
|
|
|
85 |
|
- |
|
- |
|
|
|
|
Cash and cash equivalents |
|
|
1,673 |
|
5,456 |
|
4,748 |
|
||
|
|
Other current assets |
|
|
|
460 |
|
- |
|
400 |
|
|
|
|
Assets of disposal group held for sale |
|
|
- |
|
894 |
|
440 |
|
||
|
|
Total current assets |
|
|
|
11,556 |
|
21,211 |
|
16,263 |
|
|
|
|
Total assets |
|
|
|
36,936 |
|
48,156 |
|
42,166 |
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Bank overdraft |
|
|
8 |
(3,633) |
|
- |
|
- |
|
|
|
|
Borrowings |
|
|
|
8 |
(900) |
|
(900) |
|
(5,900) |
|
|
|
Obligations under finance leases |
|
|
(161) |
|
(147) |
|
(141) |
|
||
|
|
Trade and other payables |
|
|
(5,285) |
|
(8,203) |
|
(6,618) |
|
||
|
|
Provisions |
|
|
|
|
(20) |
|
(8) |
|
(60) |
|
|
|
Current tax liabilities |
|
|
|
(191) |
|
(102) |
|
(87) |
|
|
|
|
Accruals and deferred income |
|
|
(5,432) |
|
(6,435) |
|
(6,355) |
|
||
|
|
Total current liabilities |
|
|
|
(15,622) |
|
(15,795) |
|
(19,161) |
|
|
|
|
Non-current liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings |
|
|
|
8 |
(2,475) |
|
(13,175) |
|
(2,925) |
|
|
|
Obligations under finance leases |
|
|
(379) |
|
(270) |
|
(359) |
|
||
|
|
Deferred tax liabilities |
|
|
|
(396) |
|
(27) |
|
(421) |
|
|
|
|
Non-current provisions |
|
|
|
(86) |
|
- |
|
(73) |
|
|
|
|
Other non-current liabilities |
|
|
(111) |
|
(123) |
|
(113) |
|
||
|
|
Retirement benefit obligation |
|
|
(4,975) |
|
(7,942) |
|
(4,959) |
|
||
|
|
Total non-current liabilities |
|
|
(8,422) |
|
(21,537) |
|
(8,850) |
|
||
|
|
Total liabilities |
|
|
|
(24,044) |
|
(37,332) |
- |
(28,011) |
|
|
|
|
Net assets |
|
|
|
|
12,892 |
|
10,824 |
|
14,155 |
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
Share capital |
|
|
|
6,066 |
|
6,066 |
|
6,066 |
|
|
|
|
Share premium account |
|
|
|
6,396 |
|
6,396 |
|
6,396 |
|
|
|
|
Merger reserve |
|
|
|
7,371 |
|
7,371 |
|
7,371 |
|
|
|
|
Translation reserve |
|
|
|
(139) |
|
119 |
|
(113) |
|
|
|
|
Other reserve |
|
|
|
(358) |
|
(358) |
|
(358) |
|
|
|
|
Retained earnings |
|
|
|
(6,444) |
|
(8,770) |
|
(5,207) |
|
|
|
|
Equity attributable to shareholders of the parent |
12,892 |
|
10,824 |
|
14,155 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statement of Cash Flows
for the financial period ended 30 June 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6 months to 30 June |
|
18 months ended |
|
|
|
|
|
|
|
|
2012 |
2011 |
|
31 December |
|
|
|
|
|
|
|
(unaudited) |
(unaudited) |
|
2011 |
|
|
|
|
|
|
Notes |
£'000 |
£'000 |
|
£'000 |
|
|
|
Cash flows from operating activities |
|
|
|
|
|
|
||
|
|
Loss before interest and tax |
|
|
(429) |
(3,426) |
|
(7,232) |
|
|
|
|
Depreciation and impairment charge |
|
556 |
1,189 |
|
3,078 |
|
||
|
|
Amortisation and impairment charge |
|
260 |
361 |
|
926 |
|
||
|
|
Profit on sale of property, plant and equipment |
|
(4) |
(5) |
|
(345) |
|
||
|
|
Retirement benefit obligation |
|
|
(402) |
(463) |
|
(1,664) |
|
|
|
|
Decrease in provisions |
|
|
(27) |
(447) |
|
(987) |
|
|
|
|
Cash used in operations before working capital movements |
(46) |
(2,791) |
|
(6,224) |
|
|||
|
|
Decrease in trade and other receivables |
|
1,517 |
2,955 |
|
5,586 |
|
||
|
|
Decrease in inventories and work in progress |
|
24 |
221 |
|
957 |
|
||
|
|
Decrease in trade and other payables |
|
(2,163) |
(2,828) |
|
(7,395) |
|
||
|
|
Cash used in operations |
|
|
(668) |
(2,443) |
|
(7,076) |
|
|
|
|
Interest paid |
|
|
|
(66) |
(94) |
|
(278) |
|
|
|
Interest received |
|
|
26 |
119 |
|
344 |
|
|
|
|
Income tax paid |
|
|
(238) |
(173) |
|
(59) |
|
|
|
|
Net cash outflow from operating activities |
|
(946) |
(2,591) |
|
(7,069) |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
|
|
|
|
||
|
|
Purchase of intangible assets |
|
|
(64) |
(61) |
|
(329) |
|
|
|
|
Purchase of property, plant and equipment |
|
(129) |
(251) |
|
(992) |
|
||
|
|
Acquisition of subsidiary undertakings net of cash acquired |
9 |
(46) |
- |
|
(316) |
|
||
|
|
Proceeds from sale of property, plant, equipment and intangible assets |
|
45 |
98 |
|
908 |
|
||
|
|
Sale of business net of expenses |
|
- |
- |
|
6,134 |
|
||
|
|
Net cash (outflow)/inflow from investing activities |
(194) |
(214) |
|
5,405 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in financing activities |
|
|
|
|
|
|
||
|
|
Proceeds from new bank loan |
|
|
- |
4,900 |
|
6,600 |
|
|
|
|
Repayment of bank loans |
|
|
(5,450) |
(225) |
|
(5,675) |
|
|
|
|
Repayments of obligations under finance leases |
(86) |
(160) |
|
(456) |
|
|||
|
|
Net cash (outflow)/inflow from financing activities |
(5,536) |
4,515 |
|
469 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (decrease)/increase in cash and cash equivalents |
|
(6,676) |
1,710 |
|
(1,195) |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of period |
4,748 |
3,746 |
|
6,009 |
|
|||
|
|
Effects of changes in foreign exchange rates |
|
(32) |
- |
|
(66) |
|
||
|
|
Cash and cash equivalents at end of period |
|
(1,960) |
5,456 |
|
4,748 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents comprise: |
|
|
|
|
|
|
||
|
|
Cash and short term deposits |
|
|
1,673 |
5,456 |
|
4,748 |
|
|
|
|
Bank overdrafts |
|
|
(3,633) |
- |
|
- |
|
|
|
|
|
|
|
|
(1,960) |
5,456 |
|
4,748 |
|
|
|
|
|
|
|
|
|
|
|
|
Notes to the Condensed Consolidated Interim Financial Statements
1. General information
The company is a public limited company incorporated and domiciled in the UK. The address of its registered office is 66 Clifton Street, London, EC2A 4HB.
The company is listed on the Alternative Investment Market ("AIM")
The condensed consolidated interim financial information does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The Group's consolidated financial statements for the 18 months ended 31 December 2011 have been filed and the audit report was not qualified and did not contain a statement under section 498(2) or section 498(3) of the Companies Act 2006.
2. Basis of preparation
The condensed consolidated interim financial statements for the six months to 30 June 2012 have been prepared in accordance with the accounting policies which will be applied in the twelve months financial statements to 31 December 2012. These accounting policies are drawn up in accordance with International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board and as adopted for use in the European Union that are effective at 30 June 2012.
The condensed consolidated interim financial statements are unaudited and have not been subject to review. They do not include all the information and disclosures required in the annual financial statements, and therefore should be read in conjunction with the Group's published financial statements as at 31 December 2011.
In accordance with IFRS 5, the prior year comparative figures for the six months to 30 June 2011 have been restated to reflect discontinued operations reported in the Group's consolidated financial statements for the 18 months ended 31 December 2011. The comparative figures for the 18 months ended 31 December 2011 are not the Company's statutory accounts for that period but have been extracted from these accounts.
The Directors, having considered the Group's current financial resources, have concluded that they are adequate for the Group's present requirements. Thus the condensed consolidated interim financial information has been prepared on the going concern basis.
New accounting standards and interpretations are effective for the first time in the current period but have had no impact on the results or financial position of the Group. Furthermore, new standards, new interpretations and amendments to standards and interpretations that have been issued but are not effective for the current period have not been adopted early.
Estimates
Application of the Group's accounting policies in preparing condensed consolidated interim financial statements requires management to make judgements and estimates that affect the reported amount of assets and liabilities, revenues and expenses. Actual results may ultimately differ from these estimates.
In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the 18 months ended 31 December 2011.
Risks and uncertainties
A summary of the Group's principal risks and uncertainties was provided on page 10 of the 2010/11 report and accounts. The Board considers these risks and uncertainties are still relevant to the current financial year and the impact of changes in the UK economy is reviewed in the Chairman's statement contained in this report.
3. Segmental information
Operating segments
For management purposes, the Group is organised into two operating divisions based on the type of products and services supplied by each business unit.
The principal activities of each segment are as follows:
ElecoSoft: Developer and supplier of resource management software, building project software, design and engineering software and 3D design software.
ElecoBuild: Manufacturer and supplier of precast and prestressed concrete products and a range of building products including metal roofing, cladding systems, acoustic flooring and floor joist webs.
The structure of the reportable operating segments has changed from those reported in the 2010/11 report and accounts. This change is a result of the disposal of various ElecoBuild operations during the 18 months to 31 December 2011 and consequently the prior year comparatives have been restated on the revised basis. Unallocated central costs that cannot reasonably be allocated to the operating divisions are reported under Corporate.
|
|
6 months to 30 June 2012 (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ElecoSoft |
|
ElecoBuild |
Corporate |
Elimination |
Continuing operations |
|
|
|
|
|
£'000 |
|
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
8,207 |
|
10,147 |
- |
- |
18,354 |
|
|
|
Inter-segment revenue |
|
37 |
|
- |
- |
(37) |
- |
|
|
|
Total segment revenue |
|
8,244 |
|
10,147 |
- |
(37) |
18,354 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating profit/(loss) |
|
2,227 |
|
(354) |
(437) |
|
1,436 |
|
|
|
Product development |
|
(1,118) |
|
(10) |
- |
|
(1,128) |
|
|
|
Amortisation of intangible assets |
|
(206) |
|
(54) |
- |
|
(260) |
|
|
|
Operating profit/(loss) before exceptionals |
|
903 |
|
(418) |
(437) |
|
48 |
|
|
|
Restructuring costs |
|
(1) |
|
(253) |
(62) |
|
(316) |
|
|
|
Segment result |
|
902 |
|
(671) |
(499) |
|
(268) |
|
|
|
Net finance cost |
|
(50) |
|
(430) |
268 |
|
(212) |
|
|
|
Profit/(Loss) before tax |
|
852 |
|
(1,101) |
(231) |
|
(480) |
|
|
|
Tax |
|
|
|
|
|
|
(127) |
|
|
|
Loss after tax |
|
|
|
|
|
|
(607) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6 months to 30 June 2011 (restated) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ElecoSoft |
|
ElecoBuild |
Corporate |
Elimination |
Continuing operations |
|
|
|
|
|
£'000 |
|
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
8,330 |
|
9,925 |
- |
- |
18,255 |
|
|
|
Inter-segment revenue |
|
172 |
|
375 |
- |
(547) |
- |
|
|
|
Total segment revenue |
|
8,502 |
|
10,300 |
- |
(547) |
18,255 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating profit/(loss) |
|
2,124 |
|
(592) |
(555) |
|
977 |
|
|
|
Product development |
|
(952) |
|
(12) |
- |
|
(964) |
|
|
|
Amortisation of intangible assets |
|
(296) |
|
(51) |
- |
|
(347) |
|
|
|
Operating profit/(loss) before exceptionals |
|
876 |
|
(655) |
(555) |
|
(334) |
|
|
|
Restructuring costs |
|
- |
|
(105) |
(90) |
|
(195) |
|
|
|
Segment result |
|
876 |
|
(760) |
(645) |
|
(529) |
|
|
|
Net finance cost |
|
(22) |
|
(240) |
131 |
|
(131) |
|
|
|
Profit/(Loss) before tax |
|
854 |
|
(1,000) |
(514) |
|
(660) |
|
|
|
Tax |
|
|
|
|
|
|
(187) |
|
|
|
Loss after tax |
|
|
|
|
|
|
(847) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18 months to 31 December 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ElecoSoft |
|
ElecoBuild |
Corporate |
Elimination |
Continuing operations |
|
|
|
|
|
£'000 |
|
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
23,047 |
|
33,775 |
|
- |
56,822 |
|
|
|
Inter-segment revenue |
|
401 |
|
1,090 |
|
(1,491) |
- |
|
|
|
Total segment revenue |
|
23,448 |
|
34,865 |
|
(1,491) |
56,822 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating profit/(loss) |
|
5,993 |
|
(288) |
(1,606) |
|
4,099 |
|
|
|
Product development |
|
(3,027) |
|
(25) |
- |
|
(3,052) |
|
|
|
Amortisation of intangible assets |
|
(752) |
|
(152) |
- |
|
(904) |
|
|
|
Operating profit/(loss) before exceptionals |
|
2,214 |
|
(465) |
(1,606) |
|
143 |
|
|
|
Impairment charges |
|
(11) |
|
(11) |
- |
|
(22) |
|
|
|
Restructuring costs |
|
- |
|
(255) |
(88) |
|
(343) |
|
|
|
Segment result |
|
2,203 |
|
(731) |
(1,694) |
|
(222) |
|
|
|
Net finance cost |
|
(83) |
|
(994) |
369 |
|
(708) |
|
|
|
Profit/(Loss) before tax |
|
2,120 |
|
(1,725) |
(1,325) |
|
(930) |
|
|
|
Tax |
|
|
|
|
|
|
(279) |
|
|
|
Loss after tax |
|
|
|
|
|
|
(1,209) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Geographical segments
Segment revenue by geographical segment represents revenue from external customers based on the geographical location of the customer.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18 months ended |
|
|
|
|
|
|
6 months to 30 June |
|
31 December |
|
||
|
|
|
|
|
2012 |
|
2011 |
|
2011 |
|
|
|
|
|
|
£'000 |
|
£'000 |
|
£'000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UK |
|
|
11,934 |
|
11,479 |
|
38,766 |
|
|
|
Scandinavia |
|
|
4,389 |
|
4,354 |
|
11,866 |
|
|
|
Rest of Europe |
|
|
1,934 |
|
2,345 |
|
5,899 |
|
|
|
Rest of World |
|
|
97 |
|
77 |
|
291 |
|
|
|
|
|
|
18,354 |
|
18,255 |
|
56,822 |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue for the six months to 30 June 2012 restated at prior year average exchange rates is £18,495,000.
4. Discontinued operations
During the 18 months to 31 December 2011, the Group sold certain business units within its ElecoBuild division and reduced its commitment to other operations within this division. Certain residual incomes and costs relating to the sale and closure of these discontinued operations which have been included in the income statement are set out below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18 months ended |
|
|
|
|
|
|
6 months to 30 June |
|
31 December |
|
||
|
|
|
|
|
2012 |
|
2011 |
|
2011 |
|
|
|
|
|
|
£'000 |
|
£'000 |
|
£'000 |
|
|
|
Revenue |
|
|
5 |
|
9,066 |
|
27,039 |
|
|
|
Cost of sales |
|
- |
|
(8,139) |
|
(22,924) |
|
|
|
|
Gross profit |
|
5 |
|
927 |
|
4,115 |
|
|
|
|
Distribution costs |
|
- |
|
(135) |
|
(443) |
|
|
|
|
Administrative expenses |
(166) |
|
(2,852) |
|
(8,099) |
|
||
|
|
Other operating costs |
|
- |
|
(837) |
|
(1,902) |
|
|
|
|
Loss on re-measurement |
- |
|
- |
|
(681) |
|
||
|
|
Operating loss |
|
(161) |
|
(2,897) |
|
(7,010) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance income |
|
15 |
|
105 |
|
249 |
|
|
|
|
Finance cost |
|
- |
|
(39) |
|
- |
|
|
|
|
Loss before tax |
|
(146) |
|
(2,831) |
|
(6,761) |
|
|
|
|
Taxation on discontinued operations |
(106) |
|
42 |
|
(207) |
|
||
|
|
Loss for the period from discontinued operations |
(252) |
|
(2,789) |
|
(6,968) |
|
||
|
|
Profit on business disposals after tax |
- |
|
- |
|
5,440 |
|
||
|
|
Net loss for the period from discontinued operations |
(252) |
|
(2,789) |
|
(1,528) |
|
||
|
|
|
|
|
|
|
|
|
|
|
5. Exceptional items
Exceptional items represent costs considered necessary to be separately disclosed by virtue of their size or nature.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18 months ended |
|
|
|
|
|
|
6 months to 30 June |
|
31 December |
|
||
|
|
|
|
|
2012 |
|
2011 |
|
2011 |
|
|
|
|
|
|
£'000 |
|
£'000 |
|
£'000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of intangible assets |
|
- |
|
11 |
|
11 |
|
|
|
|
Impairment of property, plant and equipment |
|
- |
|
- |
|
11 |
|
|
|
|
Restructuring costs |
|
|
316 |
|
184 |
|
343 |
|
|
|
|
|
|
316 |
|
195 |
|
365 |
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring costs comprise cash and non-cash costs associated with the Group restructuring programme, mainly in the UK, and primarily relate to redundancy and business merger costs.
6. Net finance (cost)/income
Finance income and costs from continuing operations is set out below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18 months ended |
|
|
|
|
|
6 months to 30 June |
|
31 December |
|
||
|
|
|
|
2012 |
|
2011 |
|
2011 |
|
|
|
|
|
£'000 |
|
£'000 |
|
£'000 |
|
|
|
Finance income |
|
|
|
|
|
|
|
|
|
Bank and other interest receivable |
24 |
|
27 |
|
96 |
|
|
|
|
Finance costs |
|
|
|
|
|
|
|
|
|
Bank overdraft and loan interest |
(89) |
|
(65) |
|
(250) |
|
|
|
|
Finance leases and hire purchase contracts |
(12) |
|
(8) |
|
(32) |
|
|
|
|
Net return on pension scheme assets and liabilities |
(135) |
|
(85) |
|
(522) |
|
|
|
|
Total net finance cost |
|
(212) |
|
(131) |
|
(708) |
|
|
|
|
|
|
|
|
|
|
|
7. Loss per share
The calculations of the loss per share are based on the total loss after tax attributable to ordinary equity shareholders of the Company and the weighted average number of shares in issue for the reporting period.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18 months ended |
|
|
|
|
|
6 months to 30 June |
|
31 December |
|
||
|
|
|
|
2012 |
|
2011 |
|
2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss after taxation |
|
£(859,000) |
|
£(3,636,000) |
|
£(2,737,000) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares in issue in the period |
59,761,646 |
|
59,761,646 |
|
59,761,646 |
|
|
|
|
Dilutive effect of share options |
|
- |
|
- |
|
- |
|
|
|
Number of shares for diluted earnings per share |
59,761,646 |
|
59,761,646 |
|
59,761,646 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share - basic and diluted |
|
|
|
|
|
|
|
|
|
Continuing operations |
|
(1.0) |
p |
(1.4) |
p |
(2.0) |
p |
|
|
Discontinued operations |
|
(0.4) |
p |
(4.7) |
p |
(2.6) |
p |
|
|
Total operations |
|
(1.4) |
p |
(6.1) |
p |
(4.6) |
p |
|
|
|
|
|
|
|
|
|
|
There is no dilution in the loss per share calculation at 30 June 2012 due to the loss for the period. The diluted loss per share is the same as the basic loss per share for the current period.
8. Borrowings
The bank loans and overdrafts are repayable as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
at 30 June |
at 30 June |
at 31 December |
|
|
|
|
|
|
|
|
2012 |
2011 |
2011 |
|
|
|
|
|
|
|
|
£'000 |
£'000 |
£'000 |
|
|
|
In one year or less |
|
|
|
4,533 |
900 |
5,900 |
|
|
|
|
Between one and two years |
|
|
900 |
10,700 |
900 |
|
||
|
|
Between two and five years |
|
|
1,575 |
2,475 |
2,025 |
|
||
|
|
More than five years |
|
|
- |
- |
- |
|
||
|
|
|
|
|
|
|
7,008 |
14,075 |
8,825 |
|
|
|
|
|
|
|
|
|
|
|
|
9. Acquisitions
On 14 March 2012 the Group acquired the business and certain assets of Novator Projekstyrning AB, of Sweden, enhancing its range of product planning software for a total consideration of £83,000. The consideration comprised the payment of £46,000 in cash from the Group's existing resources and deferred consideration of £37,000.
An analysis of the provisional fair value of the Novator net assets acquired and the fair value of the consideration paid is set out below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value |
Fair value adjustments |
Provisional fair value |
|
|
|
|
|
|
|
|
|
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment |
|
|
- |
- |
- |
|
|||
|
|
Inventories |
|
|
|
|
2 |
- |
2 |
|
|
|
|
|
|
|
|
|
|
2 |
- |
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income |
|
|
|
|
- |
- |
- |
|
|
|
|
|
|
|
|
|
|
- |
- |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets |
|
|
|
|
2 |
- |
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
|
|
|
|
|
81 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total consideration |
|
|
|
|
|
|
83 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Satisfied by: |
|
|
|
|
|
|
|
|
|
|
|
Cash |
|
|
|
|
|
|
|
46 |
|
|
|
Deferred purchase consideration |
|
|
|
|
37 |
|
|||
|
|
|
|
|
|
|
|
|
|
83 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill recognised above contains certain intangible assets that cannot be individually, separately and reliably measured from the acquiree due to their nature. These items include the value of the management and workforce together with synergies that are expected to be gained from being part of the Group.
10. Related Party Disclosures
Transactions between Group undertakings, which are related parties, have been eliminated on consolidation and are not disclosed in this note.
With the exception of M L Turner, the Directors of the Company had no material transactions with the Company during the six months to 30 June 2012, other than a result of service agreements. An amount of £73,000 (2011: £51,000) was paid to Shoremountain Ltd of which M L Turner is a director. This was paid under the terms of a consultancy arrangement by the Group.
An amount of £12,500 (2011: £13,000) was paid to JHB Ketteley &Co Limited under a lease for occupation by the Group of 66 Clifton Street, London, EC2A 4HB.
11. Post balance sheet events
On 21 September 2012, Eleco plc discharged its obligation arising under Sections 75 and 75A of the Pensions Act 1995 by the payment of £595,000 to the Scheme and the Board has been advised that accordingly, by law, Eleco plc is no longer a Statutory Employer of the Scheme under Section 75 and 75A of the Pensions Act 1995 and Part 3 of the of the Pensions Act 2004.