RNS Number:1191F
Centurion Electronics PLC
26 June 2006
Issued on behalf of Centurion Electronics plc
Date: Monday 26th June 2006
Embargoed: 7.00am
Centurion Electronics plc
Developers and suppliers of specialist infotainment systems
Interim Results
for the six months ended 31 March 2006
* Turnover of #3.7 million (2005: #7.8 million)
* Loss before tax #0.2 million (2005: Loss #4.3 million) and Loss before
tax and exceptional items #0.98 million (2005: Loss #0.34 million)
* Successful debt re-structuring programme completed providing working
capital to develop the infotainment systems with automotive manufacturers
* Cash of #0.97 million as at 31 March 2006
* Contracts secured with UK luxury car manufacturer to supply an in-car
entertainment system. First contract for the Company for direct delivery to
an OEM assembly plant
* Investment in environmental testing facilities and engineering
simulation software to support product design and engineering capabilities
* Improved level of lead activity with automakers with several new
business opportunities in the pipeline
* Trading in-line with expectations and on track to maintain positive
trend for the year as a whole
"We have successfully managed the re-structure of the business, together with
the re-financing process and the Board believe that the business is now in a
much better position to take full advantage of opportunities within the autom
otive infotainment market.
"Our strategy is to continue providing high-quality service that our existing
and new customers expect. The management focus will remain firmly on maintaining
financial stability, whilst continuing to invest in and develop further our
existing product offering.
"Given the continuing improvement in the Company's product ranges and potential
for new contract wins, the Board remain confident that further positive progress
will be made during this financial year and for the 2006 calendar year as a
whole."
Ernst Kastner, Chairman
FULL STATEMENT ATTACHED
Enquiries:
Chris Rhodes, Chief Executive Fiona Tooley/Katie Dale
Centurion Electronics plc Citigate Dewe Rogerson
Tel: 01707 330550 Tel: 0121 455 8370
Mobile: 07785 703523 (FMT) or 07770 788624 (KD)
-2-
Centurion Electronics plc
Interim Results
for the six months ended 31 March 2006
Introduction
At the time of the Company's AGM on 19 May 2006, I announced that current
trading was in-line with market expectations and that we were optimistic for the
remainder of the current financial year.
It is therefore pleasing to report that in the first half of this financial year
the Company traded in-line with expectations and is on track to maintain this
positive trend for the remainder of the year as a whole.
Financial Performance
For the six months ended 31 March 2006, the Company reported turnover of #3.7
million (2005: #7.8 million). The 2005 figure included sales of #3.1 million
relating to the now discontinued retail activities.
A pre-exceptional operating loss of #0.78 million (2005: #0.08 million loss) is
being reported, whilst the loss on ordinary activities before taxation amounted
to #0.17 million, against a loss of #4.3 million in the comparable period. The
exceptional items relate to an exceptional credit of #1.0 million arising from
the write-down of debt, and administrative expenses of #0.2 million, following
the debt restructuring in February 2006.
The debt re-structuring programme was accompanied by a Placing of new ordinary
shares raising #2.55 million at 0.5p per share, and the issue of convertible
loan notes of #1.0 million. This has provided the Company with working capital
to develop its high quality infotainment systems for a number of the world's
leading automotive manufacturers.
Earnings per share, excluding the exceptional profit, reflect a loss per share
of 1.05 pence (2005: loss per share of 0.92 pence).
Dividend
The Board believes that, at this stage of the Company's recovery, it is not
appropriate to pay an Interim dividend. However, the Board does intend to adopt
a progressive dividend policy in the future as appropriate.
Review
Throughout the first half of the current financial year, the management has been
firmly focussed on further developing existing relationships with the number of
high-profile car manufacturers that make up the core of our key customer base.
Overall trading has remained fairly buoyant, and it is pleasing to report that
our core customers have retained a progressive view regarding the installation
of in-car entertainment systems. Existing relationships with the Toyota Group,
Renault and others, have continued to progress well. We now supply a variety of
in-car entertainment products to a total of 15 different vehicles across our cus
tomer base. A key development for Centurion is our first "factory fit" product
for one of our main customers which will see a specifically designed rear seat
system to be installed on the assembly line. We anticipate that production will
begin in the first half of FY2007.
Over the last six months, the Company has continued to focus on the
implementation of major automotive industry Tier 1 attributes such as preparing
for ISO/TS16949 accreditation and legislative industry requirements, and has
substantially increased its expertise in this area, while maintaining its
urgency in key decision making.
The Company has made progressive investment in environmental testing facilities
and engineering simulation software, to support our product design and
engineering capabilities. We believe that the on-going development of our
engineering expertise sets us apart from our competitors and outlines the
Company's strategy and future development within the automotive sector. Our
commitment and investment in this area will be key to winning and developing
future business.
-3-
Our on-going relationships with strategic supply partners for new technology
continue to progress well, and we expect to update shareholders on this further
at the year end.
Despite the Board's attention being focussed on the refinancing and
restructuring of the business earlier this year, the management and operational
teams have been able to fully utilise their existing contacts within the
industry to promote the business.
Contract Win
In April 2006, it was announced that the Company had secured contracts for the
development and supply of an in-car entertainment system to a highly respected,
UK-based luxury car manufacturer.
The contract is to supply twin TFT headrest screens for rear seat passengers,
which display images from DVD, Auxiliary Input and analogue TV sources with a
unique wireless sound transmission system. It is important to recognise that
this is the first contract that the Company has secured for direct delivery to
an OEM vehicle car assembly plant.
Quality Accreditation
In-line with our on-going commitment to provide our customers with products that
adhere to the highest of quality, reliability and performance criteria, I am
pleased to announce that we have appointed TUV Product Services as the approved
accreditation body in our strategy to achieve ISO9001:2000, whilst continuing to
work towards ISO/TS16949 standard accreditation.
TUV provides technical assessment services and compliance solutions to some of
the leading players in the automotive industry, and allowing for a proven 12
month record, we hope that this process will be completed by July 2007.
People
I would like to welcome all new employees and management to the Company,
including Iwan Rees, who was appointed to the Main Board at the end of March
2006 as an Executive Director. Iwan originally joined the Company in January
2006 as OEM Sales Director and has over 24 years experience in the
multi-national automotive industry.
Morale within the Company remained high during this period of change.
Recruitment for skilled engineering and technical staff has been necessary to
support the business development. The Company currently employs circa 40 people
and we will be looking to recruit further during the remainder of 2006 in line
with the business needs.
Share consolidation
Since the half year end, the Company received approval at the Annual General
Meeting from Shareholders to consolidate every 50 issued and unissued ordinary
shares of 0.1p each into one ordinary share of 5p each. Admission of the new
ordinary shares of 5p each to trading on AIM became effective on 30 May 2006.
Outlook and future prospects
As a matter of good practice we have required that our Auditor Ernst & Young LLP
review this interim statement. As a matter of emphasis, Ernst & Young LLP have
stated that, in the context of the recently completed restructuring and the
ramping up of the new strategy, there remains a fundamental uncertainty as to
the Company's ability to continue as a going concern. Nevertheless the Company
continues to perform in line with management's forecasts, and the Directors
confirm that the working capital available to the Company will be sufficient for
its present requirements for at least the next 12 months, based upon their
reasonable assumptions.
Following the re-structuring and refinancing of the business the Board believes
that the business is now in a much better position to take full advantage of
opportunities within the automotive infotainment market.
-4-
Our strategy is to continue providing high-quality service that our existing and
new customers expect. The management focus will remain firmly on maintaining
financial stability, whilst continuing to invest in and develop further our
existing product offering.
Given the continuing improvement in the Company's product ranges and potential
for new contract wins, the Board remain confident that further positive progress
will be made during this financial year and for the 2006 calendar year as a
whole.
Ernst Kastner
Chairman
26 June 2006
-5-
Centurion Electronics Plc
Profit and loss account
Six months ended 31 March 2006
--------------------------------------------------------------------------------
Note Unaudited Unaudited Unaudited
6 months to 6 months to 6 months to
31 March 31 March 31 March
2006 2006 2006
Pre-Exceptional Exceptional* Total
# # #
Turnover 3,680,389 - 3,680,389
Cost of sales (2,626,496) - (2,626,496)
----------------------------------------
Gross profit/(loss) 1,053,893 - 1,053,893
Administrative expenses (1,831,470) (186,160) (2,017,630)
----------------------------------------
Operating (loss) 2 (777,577) (186,160) (963,737)
Loss on disposal of fixed - (4,863) (4,863)
assets
Interest payable and similar (208,587) 1,005,961 797,374
charges
----------------------------------------
(Loss)/profit on ordinary (986,164) 814,938 (171,226)
activities before taxation
Taxation on (loss)/profit on 4 - - -
ordinary activities
----------------------------------------
(Loss)/profit on ordinary (986,164) 814,938 (171,226)
activities after taxation
========================================
(Loss)/earnings per share 3
Basic and diluted (1.05p) 0.87p (0.18p)
*Further details of exceptional items are disclosed in note 2
Profit and loss account
Six months ended 31 March 2006
continued...
-----------------------------------------------------------------------------------------------------------------
Note Unaudited Unaudited Unaudited Audited Audited Audited
6 months to 6 months to 6 months to Year to Year to Year to
31 March 31 March 31 March 30 September 30 September 30 September
2005 2005 2005 2005 2005 2005
Pre-Exceptional Exceptional* Total Pre-Exceptional Exceptional* Total
# # # # # #
Turnover 7,800,954 - 7,800,954 14,006,539 - 14,006,539
Cost of (5,096,272) (3,724,448) (8,820,720) (10,549,208) (5,919,966) (16,469,174)
sales
--------------------------------------- -----------------------------------------------
Gross
profit/(loss) 2,704,682 (3,724,448) (1,019,766) 3,457,331 (5,919,966) (2,462,635)
Administrative
expenses (2,786,018) (210,274) (2,996,292) (5,561,386) (783,957) (6,345,343)
--------------------------------------- -----------------------------------------------
Operating
(loss) 2 (81,336) (3,934,722) (4,016,058) (2,104,055) (6,703,923) (8,807,978)
Loss on
disposal of
fixed - - - - (47,643) (47,643)
assets
Interest
payable and
similar (264,632) - (264,632) (659,767) - (659,767)
charges
--------------------------------------- -----------------------------------------------
(Loss)/profit
on ordinary (345,968) (3,934,722) (4,280,690) (2,763,822) (6,751,566) (9,515,388)
activities
before
taxation
Taxation on
(loss)/profit
on 4 120,415 876,434 996,849 619,096 - 619,096
ordinary
activities
--------------------------------------- -----------------------------------------------
(Loss)/profit
on ordinary (225,553) (3,058,288) (3,283,841) (2,144,726) (6,751,566) (8,896,292)
activities
after ====================================== ==============================================
taxation
(Loss)/earning
s per share 3
Basic and
diluted (0.92p) (12.49p) (13.41p) (8.70p) (27.39p) (36.09p)
*Further details of exceptional items are disclosed in note 2
-6-
Centurion Electronics Plc
Balance Sheet
Six months ended 31 March 2006
--------------------------------------------------------------------------------
Unaudited Unaudited Audited
6 months to 6 months to Year to
31 March 2006 31 March 2005 30 September 2005
# # #
Fixed assets
Tangible assets 766,342 934,571 853,264
Current assets
Stocks 843,861 6,952,177 2,135,476
Debtors 1,237,748 2,877,742 1,384,539
Other debtors 638,134 1,613,760 584,954
Cash at bank and in hand 973,546 2,170,251 682,936
-----------------------------------------------
3,693,289 13,613,930 4,787,905
Creditors: amounts falling
due within one year (2,428,769) (10,794,557) (7,598,484)
-----------------------------------------------
Net current
assets/(liabilities) 1,264,520 2,819,373 (2,810,579)
-----------------------------------------------
Total assets less current
liabilities 2,030,862 3,753,944 (1,957,315)
Creditors: amounts falling
due after more than one
year (1,188,402) (199,341) (100,534)
-----------------------------------------------
842,460 3,554,603 (2,057,849)
===============================================
Capital and reserves
Called up share capital 880,681 221,481 221,481
Share premium account 7,144,214 4,731,879 4,731,879
Capital redemption reserve 130,000 130,000 130,000
Profit and loss account (7,312,435) (1,528,757) (7,141,209)
-----------------------------------------------
Shareholders' funds 842,460 3,554,603 (2,057,849)
===============================================
-7-
Centurion Electronics Plc
Cash Flow Statement
Six months ended 31 March 2006
--------------------------------------------------------------------------------
Note Unaudited Unaudited Audited
6 months to 6 months to Year to
31 March 31 March 30 September
2006 2005 2005
# # #
Net cash
outflow/(inflow) from
operating activities 5 524,165 (4,702,005) 768,371
------------------------------------
Returns on investments and
servicing of finance
Interest paid (208,587) (264,632) (659,767)
------------------------------------
Net cash outflow from
returns on investments
and servicing of
finance (208,587) (264,632) (659,767)
Taxation
UK corporation tax
(paid)/received - (170) (170)
Capital expenditure and financial
investment
Purchase of tangible
fixed assets (49,121) (149,153) (297,883)
Receipts from sales of
tangible fixed assets 9,326 - 53,141
------------------------------------
(39,795) (149,153) (244,742)
Equity dividends paid - - (272,959)
------------------------------------
Cash outflow before
financing 275,783 (5,115,960) (409,267)
Financing
Short term import loans
(paid)/advanced (2,083,403) (793,708) (740,418)
Bank loans paid (22,667) (22,667) (45,333)
Bank loans received 1,003,698 - -
Capital element of
finance lease rental
payments (77,403) (33,365) (76,105)
Share options exercised - 180,000 180,000
Issue of share capital
(net of expenses) 3,071,535 - -
------------------------------------
1,891,760 (669,740) (681,856)
------------------------------------
Increase/(decrease) in
cash for the period 6 2,167,543 (5,785,700) (1,091,123)
====================================
-8-
Centurion Electronics Plc
Notes to the interim report
1 Accounting policies
The financial information contained in this interim statement has been prepared
on the basis of the accounting policies set out in the Company's audited
financial statements for the year ended 30 September 2005, which have been
applied consistently.
Fundamental accounting concept - going concern
The Directors have produced forecast cash flows to 30 September 2007 which
indicate that the company can continue as a going concern and meet its
liabilities as they fall due. The forecast is, in particular, dependent on OEM
customers drawing down product in line with their existing forecasts for the
period.
The Directors believe that the forecast cash flows are achievable and therefore
believe it is appropriate to prepare the accounts on the going concern basis.
The financial information does not include any adjustments to the balance sheet,
tangible fixed assets or provision for future liabilities which would result
should the going concern basis not be appropriate.
2 Exceptional Items
Unaudited Unaudited Audited
6 months to 6 months to Year to
31 March 31 March 30 September
2006 2005 2005
# # #
This is arrived at after charging/
(crediting):
Exceptional items (see
below) (814,938) 3,934,722 6,751,566
Exceptional Items
Included in interest payable and similar charges for the six months ended 31
March 2006 is an exceptional credit of #1,005,961. This relates to a write down
of debt following the re-financing that occurred on 13 March 2006. Also included
in administrative expenses is an exceptional charge for redundancy and other
costs following restructuring in the amount of #186,160. A further charge
amounts to #4,863 and relates to the disposal of certain fixed assets
Included in cost of sales for the six months ended 31 March 2005 is an
exceptional charge of #3,724,448 (2004: #nil). This relates to a stock write
down for obsolescence and valuation considerations resulting from issues in the
supply chain management and stock purchase, categorisation and net realisable
value procedures. A further #210,274 (2004: #nil) is included in administrative
expenses and relates to compensation costs paid to two outgoing directors as
well as consultants' costs.
continued...
-9-
3 (Loss)/Earnings per share
Earnings per ordinary share have been calculated using the weighted average
number of shares in issue during the relevant financial years. These take into
account the issue of 659,200,000 ordinary shares on 13 March 2006 as part of the
re-financing.
The weighted average number of equity shares in issue for the basic earnings per
share calculation is 93,632,009 (2005: 24,488,328) and the earnings, being
(losses)/profits after tax are (#171,226) (2005: (#3,283,841)).
The numerator for the diluted earnings per share disclosure is the same as the
basic earnings per share numerator.
The denominator for the diluted earnings per share disclosure is as follows:
Unaudited Unaudited Audited
6 months to 6 months to Year to
31 March 31 March 30 September
2006 2005 2005
Basic earnings per share
denominator ordinary
shares of 0.1 pence 93,632,009 24,488,328 24,651,824
Dilutive effect of company share - - -
option schemes --------------------------------------
Diluted earnings per share
denominator 93,632,009 24,488,328 24,651,824
======================================
The directors have also disclosed, for clarity, earnings per share excluding
exceptional items. For the purposes of these ratios the denominators are no
different to those set out above. The numerators for these additional ratios are
(#986,164) (2005: (#225,553)) and have been calculated as the earnings, being
(losses)/profits after tax less exceptional item (see note 2).
4 Taxation on loss on ordinary activities
Corporation Tax
The tax rate used is based on the effective rate for the year, taking into
account the exceptional charges for the six months to 31 March 2006.
Deferred tax
The recognition of deferred tax assets is limited to the extent that the company
anticipates to make sufficient taxable profits in the future to absorb the
reversal of the underlying timing differences
5 Reconciliation of operating (loss)/profit to net cash outflow from operating
activities
Unaudited Unaudited Audited
6 months to 6 months to Year to
31 March 2006 31 March 2005 30 September 2005
# # #
Operating (loss) (963,737) (4,016,058) (8,807,978)
Depreciation 121,853 116,752 246,006
Decrease/increase in
stocks 1,291,615 (2,246,078) 2,570,623
Decrease/(increase) in
debtors 93,611 4,183,667 6,335,359
(Decrease)/increase in
creditors (19,177) (2,740,288) 424,361
------------------------------------------------
Net cash inflow/(outflow)
from operating activities 524,165 (4,702,005) 768,371
================================================
continued...
-10-
6 Reconciliation of net cash inflow to movement in net (debt)
Unaudited Unaudited Audited
6 months to 6 months to Year to
31 March 2006 31 March 2005 30 September 2005
# # #
Increase/(decrease) in
cash for the period 2,167,543 (5,785,700) (1,091,123)
Cash outflow from changes
in debt and lease
financing 1,179,775 849,739 861,856
-------------------------------------------------
Change in net debt
resulting from cash flows 3,347,318 (4,935,961) (229,267)
New finance leases - (68,801) (68,801)
Other non cash movement 1,005,961 - -
-------------------------------------------------
Movement in net debt in
the period 4,353,279 (5,004,762) (298,068)
Net (debt) at start of
period (4,538,408) (267,606) (4,240,340)
-------------------------------------------------
Net (debt) at end of the
period (note 7) (185,129) (5,272,368) (4,538,408)
=================================================
7 Analysis of net funds
At Cash Other non At
cash
1 October 2005 Flow Changes 31 March 2006
# # # #
Cash in hand and at bank 682,936 290,608 - 973,544
Bank overdrafts (2,444,581) 1,438,620 1,005,961 -
Invoice discounting (438,315) 438,315 - -
facility ---------------------------------------------------
(2,199,960) 2,167,543 1,005,961 973,544
---------------------------------------------------
Debt due after 1 year (41,417) (981,031) - (1,022,448)
Debt due within 1 year (2,128,736) 2,083,403 - (45,333)
Obligations under
finance (168,295) 77,403 - (90,892)
leases ---------------------------------------------------
Total (4,538,408) 3,347,318 1,005,961 (185,129)
===================================================
8 Non-statutory Accounts
The financial information contained in this report does not constitute full
statutory accounts as defined by section 240 of the Companies Act of 1985.
Except for the effect of prior period restatements, the financial information in
respect of the year ended 30 September 2005 has been extracted from the
statutory accounts for that year which have been filed with the Registrar of
Companies. The auditors report on those accounts was unqualified.
Copies of this report are being sent to all shareholders and are available from
the Company's offices at Satellite House, City Park, Swiftfields, Welwyn Garden
City, Hertfordshire AL7 1LY.
-11-
INDEPENDENT REVIEW REPORT TO CENTURION ELECTRONICS PLC
Introduction
We have been instructed by the company to review the financial information for
the six months ended 31 March 2006 which comprises the Profit and Loss Account,
Balance Sheet, Cash Flow Statement and the related notes 1 to 8. We have read
the other information contained in the interim report and considered whether it
contains any apparent misstatements or material inconsistencies with the
financial information.
This report is made solely to the company having regard to guidance contained in
Bulletin 1999/4 'Review of interim financial information' issued by the Auditing
Practices Board. To the fullest extent permitted by the law, we do not accept or
assume responsibility to anyone other than the company, for our work, for this
report, or for the conclusions we have formed.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report as required by the AIM Rules
issued by the London Stock Exchange.
Review work performed
We conducted our review having regard to the guidance contained in Bulletin 2004
/1 'Review of interim financial information' issued by the Auditing Practices
Board for use in the United Kingdom. A review consists principally of making
enquiries of management and applying analytical procedures to the financial
information and underlying financial data, and based thereon, assessing whether
the accounting policies and presentation have been consistently applied, unless
otherwise disclosed. A review excludes audit procedures such as tests of
controls and verification of assets, liabilities and transactions. It is
substantially less in scope than an audit performed in accordance with
International Standards on Auditing (UK and Ireland) and therefore provides a
lower level of assurance than an audit. Accordingly we do not express an audit
opinion on the financial information.
Review conclusion
Going concern
In forming our review conclusion, we have considered the adequacy of the
disclosures made in Note 1 of the financial information concerning the
fundamental uncertainty over the company's ability to continue as a going
concern. The financial information is prepared on a going concern basis which is
dependent on the company's managing its operations to achieve sufficient cash
flows through meeting its sales forecasts. In view of the significance of this
fundamental uncertainty we consider that it should be brought to your attention,
but our review conclusion is not modified in this respect.
On the basis of our review we are not aware of any material modifications that
should be made to the financial information presented for the six months ended
31 March 2006.
Ernst & Young LLP
Luton
26 June 2006
This information is provided by RNS
The company news service from the London Stock Exchange
END
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