TIDMEKT
RNS Number : 1807B
Elektron Technology PLC
19 September 2018
19 September 2018
Elektron Technology plc
Half year results for the six months ended 31 July 2018
Elektron Technology plc (AIM: EKT, "Elektron" or the "Group"),
the global technology group, has published its results for the six
months ended 31 July 2018 ("H1 FY19" or the "Period")
Performance*
-- Group revenue: GBP15.9m (up 17%) (H1 FY18: GBP13.6m)
-- Bulgin revenues up 14%; Checkit revenues up 146%; EET revenues up 33%
-- Operating profit (including Checkit) of GBP1.4m (H1 FY18: GBP0.5m), up 180%
-- Operating profit from businesses excluding Checkit: GBP3.6m (up 29%) (H1 FY18: GBP2.8m)
-- Checkit losses lower at GBP2.2m (H1 FY18: GBP2.3m)
-- EET returned to breakeven
-- Sale of Queensgate Nano for initial consideration of GBP0.8m
with up to a further GBP0.8m deferred consideration based on
Queensgate Nano revenue performance of which GBP0.1m has been
received since end of July
-- Net cash balances at GBP6.8m (31 July 2017: GBP2.1m; 31 January 2018: GBP5.2m)
-- Positive outlook for H2 and beyond
* Figures for continuing operations, except where otherwise stated.
John Wilson, Chief Executive Officer of Elektron, said:
"Strong double digit sales growth during the first half of the
year is representative of the continuing multi-year transformation
of our business. The Board retains its positive outlook for the
medium to long term prospects of the Group."
For further information:
+44 (0) 1223
Elektron Technology plc 371 000
www.elektron-technology.com
John Wilson (Chief Executive Officer)
Andrew Weatherstone (Chief Financial
Officer & Company Secretary)
N+1 Singer (Nominated Adviser & Broker)
Shaun Dobson / Jen Boorer (Corporate +44 (0) 20 7496
Finance) 3000
Rachel Hayes (Corporate Broking)
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
Notes to Editors:
Elektron conceives, designs and markets innovative products and
services for business that connect, monitor and control. We have a
multi skilled team of engineers, software and product line
specialists based in Cambridge focused on the opportunities created
by global growth in the following areas:
- Demand for ubiquitous power and data: Bulgin
- Real-time operations management using Internet of Things (IoT)
technology: Checkit
- Screening for the effects of ageing on sight: Elektron Eye
Technology
Chairman and Chief Executive Officer's statement
Overview
The Group's improved performance during the first six months of
the year represents a continuation of the strong performance
delivered in the last financial year as part of the multi-year
transformation of the Elektron Group. Bulgin continues to deliver
organic sales growth, with class-leading margins, Checkit sales
have more than doubled as the business has transitioned from
start-up to scale-up mode and EET has eliminated its trading losses
through sales growth.
Group EBITDA increased by 63% to GBP2.6m (H1 FY18: GBP1.6m),
resulting in a near threefold increase in operating profit to
GBP1.4m (H1 FY18: GBP0.5m). Following the sale of Queensgate
shortly after the year end, which generated GBP0.8m of cash
proceeds, and strong operating cash flow, the net cash position
improved to GBP6.8m from GBP5.2m at 31 January 2018 (H1
FY18:GBP2.1m).
As a result of the sale of Queensgate, and Sheen in the prior
year, the Group was carrying around GBP0.5m of excess overhead at
the start of the year. During the first half a headcount reduction
initiative was implemented and completed to remove this overhead,
the benefit of which will be felt in the second half and going
forward.
Bulgin
Bulgin designs and manufactures niche, ruggedised products used
in harsh environments in which a high degree of ingress protection
is required.
The first half of FY19 saw Bulgin sales of GBP14.3m, an increase
of 14.4% over the prior year (H1 FY18: GBP12.5m), and record order
intake levels which were 10% higher than the previous year, which
was in itself up 20% over FY17. The increase in sales and orders
has been driven through successful implementation of Bulgin's
growth strategy, with the Board expecting full year revenues to
remain ahead of last year.
Bulgin has again achieved underlying margin improvement, with
net operating margin of 25% (H1 FY18: 24%), benefiting from an
operational gearing effect which also served to push up gross
margin to 47% (H1 FY18: 46%). In the period Bulgin experienced
unprecedented demand for a number of products outstripping capacity
and necessitating a short-term outsourcing initiative in Tunisia.
Capacity in our Tunis facility is currently being increased through
a combination of additional labour capacity and modest investment
in machinery. This will serve to improve margins further in the
medium to long term. ROCE for Bulgin has increased to in excess of
150%.
In April, Bulgin announced a distribution partnership with Arrow
Electronics Inc, the world's largest electronic component
distributor. Initial stocking orders of over $0.7m were received
during H1 and these were delivered to Arrow in the first two months
of the second half.
Bulgin now operates in a relatively cost-insensitive market and,
whilst subject to distributor stocking and destocking cycles, has
increased the number of end users during the last three years at a
rate of 5% CAGR. The number of end users is estimated to be in
excess of 80,000. This has been achieved through a fourfold
increase in addressable market during that period as a result of
new product launches and supplemented by:
-- expansion and optimisation of the distribution channel;
-- substantially improved marketing collateral and product videos; and
-- incentivisation of the distribution sales force.
To facilitate further growth, by increasing the number of end
users and adoption of a higher proportion of Bulgin's product
portfolio by these end users, Bulgin has an aggressive rolling
24-month roadmap, with a target of eight to ten new product
launches per year.
Bulgin has launched five new products during H1 FY19:
-- 4000 series fibre connector - features a quick-turn coupling
mechanism perfect for data applications across a wide variety of
markets requiring fast, dustproof and watertight data through fibre
connections;
-- Cat 6 ethernet connector - a gold standard waterproof
circular connector for use in a wide variety of end markets from
general industrial through to marine;
-- X-Code M-series connector range - has a high degree of
mechanical and electrical stability providing a cost effective and
flexible connectivity solution across a wide spectrum of
industries;
-- "Smart" programmable connector - a connector with memory,
designed initially for the Agtech industry, but has a broad range
of industrial uses; and
-- 4000 series pole extension range- a compact and versatile
connector suited to harsh environments where space is at a
premium.
Historically, Bulgin's core market has been one of low growth
and low profitability. The strategic transformation of the Bulgin
business has been designed to focus on exploiting growth markets
through innovative new products to unlock higher levels of sales
and margin growth. The results for H1 FY19 demonstrate the
continued successful execution of this.
Checkit
Checkit revenues increased to GBP0.4m, up 146% over the prior
year, in line with the Board's expectations. Losses of GBP2.2m were
also in line with expectations, and were lower than prior year (H1
FY18: GBP2.3m). Cash expenditure was GBP1.8m (H1 FY18: GBP1.7m),
which includes capitalised development costs of GBP0.5m (H1 FY18:
GBP0.3m). The increase in cash spend was a result of accelerating
product development highlighted in the section below.
Contracted annualised recurring revenues at 31 July were GBP1.1m
(31 July 2017: GBP0.5m), an increase of 120%.
Checkit provides real-time operations management for businesses
that need to ensure reliable, efficient performance of front-line
and field-based staff involved in service provision. This is an
area where the adoption of technology has been generally slow to
date. Checkit has the opportunity to seize a first mover advantage
in its nascent market which is currently occupied by a large number
of small players offering a variety of overlapping but
non-identical niche services. Checkit aims to be a comprehensive
operational system with an ambitious product roadmap (as set out
further below).
Unlike paper-based checklists (which are still the norm in many
service-based businesses), Checkit ensures the efficient execution
of activities, providing top to bottom visibility of work as it
happens.
In contrast to existing workflow and process management
technologies, Checkit rapidly creates easy to use applications for
those staff who are focused on scheduling and managing work
together with the capability to integrate with sensors and the
environment.
The result for customers is improved business performance
through:
-- Revenue - from consistently delivering intended service
experience and freeing up time to focus on customers.
-- Productivity - from automation and streamlining of front-line
work and improving management efficiency.
-- Risk - from improved compliance, enforcement and visibility.
Market development
Since launch, Checkit's go-to-market focus has been on food
service, initially in the UK, with customers including Center
Parcs, Claridge's, Compass, Dishoom, George's Tradition, Jamie's
Italian, John Lewis, Merlin Entertainments and Sodexo. The strategy
has focused on adoption by large/medium sized organisations with
multiple sites, where Checkit's focus on operational consistency
and visibility delivers value. This trend is continuing, with
pilots signed up in a range of major national retail and fast food
franchise organisations.
Checkit has also developed a strong offering for smaller food
service businesses to digitise the management of their food safety
and other key management tasks. We have recently entered an
arrangement to better access this segment of the market through a
partnership with Just Eat, whereby Just Eat will promote Checkit to
its 20,000+ UK partners. We are progressing streamlining the
process to permit sign-up of these businesses through the use of
eCommerce.
Checkit's vision extends well beyond food, to anywhere that
people need to perform regular checks, tasks and workflows. Regular
room and facilities checks form a significant additional
opportunity. We have recently started a pilot roll-out in a major
UK hotel chain to support quality and operational assurance. We
estimate that the global hotel chain opportunity for this kind of
activity represents a further GBP400m annual opportunity and the
facilities management sector at least another GBP300m in the UK and
US alone.
Adoption of the product within large national and multinational
companies normally follows a three stage process and each stage may
take up to 6 months:
Stage 1: Single site pilot
Stage 2: Up to 10 sites pilot
Stage 3: Full roll out
In addition to the Stage 1 opportunity with the hotel chain
mentioned above Checkit currently has Stage 1 pilots planned with a
major UK supermarket, a multinational petrol station chain and a
global pharmaceutical company.
Checkit has accelerated its US launch with business development
activities underway and a number of promising projects in
discussion. The Board estimates that the UK and US food service
markets together represent a potential market of GBP1.2 billion
annually, with the US representing GBP1 billion of this.
Additionally we are seeing interest from mainland Europe, with
potential projects identified in France and Germany.
Checkit product development
Checkit continues to invest in its products on initiatives that
support market development and respond to customer feedback. The
sea change this year is the creation of a new version of our Work
Management app that will run on a wider range of devices and
provide enhanced check types and workflow capabilities. This is
currently undergoing beta trials. When fully launched the new
Checkit system will be able to operate externally (i.e. it will not
need to be located within buildings that are equipped with wifi).
As a result its market will expand substantially. We are currently
engaged in a market sizing exercise.
Other key developments that support these initiatives this year
are:
- Internationalisation of software and hardware to support global expansion;
- Development of out-of-the-box KPIs for businesses using
Checkit Operational Intelligence dashboards to improve visibility
and analysis for management;
- Location based capabilities to support applications beyond the
kitchen in facilities and hotel management; and
- Enhancements to sensor network hardware to simplify
installation, reduce hardware requirements for customer sites and
improve remote support.
Checkit is continually capturing large quantities of data. Our
strategy is to look for ways to leverage that data set, our
industry knowledge and AI technologies to develop insights and
added value services that will further improve efficiency and
business insights for our clients. Examples of R&D topics
include recognising performance issues with different types of
equipment and predicting failures, identifying unusual and
potentially problematic or even fraudulent user behaviour, and
predicting future unit performance and business issues early.
Planning has already started for the next phase of the product
roadmap which next year will bring many further new exciting
features for the benefit of our growing base of existing and
prospective customers.
Elektron Eye Technology (EET)
A strong H1 performance for EET resulted in sales of GBP1.2m; an
increase of 33% over the prior year (H1 FY18: GBP0.9m) helped by a
much improved distribution channel and the pulling forward of
scheduled orders by a large distributor. It is expected that year
to date performance, combined with a strong order book, will result
in full-year growth over the prior year (although the second half
is not expected to be as strong as first half performance), as the
benefit of management changes made in H1 FY18 begin to take effect.
Sales growth and lower overhead have resulted in the elimination of
losses in EET.
As previously reported, new leadership has focused on the
professionalising of sales and marketing activity over the last
twelve months. This has enabled the steady expansion of the
distribution channel with new partners signed up in France (Henson)
and Australia (MPS II) during the period. In addition, registration
of the Henson 9000 product has now been achieved in Brazil, as
interest in the product increases in Latin America, whilst
relationships are also being built with China, a market in which
the MPS II has particular potential as a sales enablement tool for
businesses in the fast-growing vitamins, minerals and nutritional
herbal supplements (VMHS) space.
Alongside this strategic channel expansion programme, EET is
working on further enhancing the clinical reputation of its
products. The Henson 9000 has been a market leader in the UK since
its release in 2014 where it dominates the optometry sector. Its
use in research studies at Manchester Royal Eye Hospital and in a
multi-centre project in India, both set up this year, will serve to
strengthen its reputation internationally and support our partners'
sales activities as the business continues its drive for greater
market share away from its home market.
Brexit
The Group's established Brexit Committee continues to monitor
developments in respect of the ongoing Brexit negotiations. As a
precautionary measure it is evaluating a number of contingency
plans in respect of its logistics and supply chain in consultation
with its customers and suppliers in the event of a 'no deal'
Brexit.
Outlook
The second half of the year has started well, in line with the
Board's expectations. Bulgin maintains record levels of order
intake driven by end customer demand. Checkit has a strong UK
pipeline and has been launched in the US, ahead of plan. In
addition, EET continues to outpace the prior year. The Board
retains its positive outlook for the second half and in delivering
results in line with recently upgraded market expectations for the
full year. The medium and long-term indicators and prospects of the
Group remain positive.
Keith Daley
Chairman
John Wilson
Chief Executive Officer
18 September 2018
Consolidated statement of comprehensive income
unaudited interim results to 31 July 2018
Unaudited Restated*
Half Unaudited
year Half year Audited
to to Year to
31 July 31 July 31 January
2018 2017 2018
GBPm GBPm GBPm
---------------------------------------------------- --------- ---------- -----------
Revenue (Note 2) 15.9 13.6 29.8
Cost of sales (8.5) (7.5) (15.0)
---------------------------------------------------- --------- ---------- -----------
Gross profit 7.4 6.1 14.8
Operating expenses
---------------------------------------------------- --------- ---------- -----------
Net operating expenses (excluding non-recurring
or special items) (6.0) (5.6) (12.3)
Operating profit before non-recurring or
special items (Note 2) 1.4 0.5 2.5
Non-recurring or special items (Note 3) - - 0.1
---------------------------------------------------- --------- ---------- -----------
Total operating expenses (6.0) (5.6) (12.2)
---------------------------------------------------- --------- ---------- -----------
Operating profit (Note 2) 1.4 0.5 2.6
Finance income - 0.1 0.1
---------------------------------------------------- --------- ---------- -----------
Profit before taxation 1.4 0.6 2.7
Taxation (Note 4) (0.3) (0.2) (0.8)
---------------------------------------------------- --------- ---------- -----------
Profit from continuing operations 1.1 0.4 1.9
Loss from discontinued operations (Note
5) (0.1) (0.3) (0.1)
---------------------------------------------------- --------- ---------- -----------
Profit for the period attributable to equity
shareholders 1.0 0.1 1.8
---------------------------------------------------- --------- ---------- -----------
Other comprehensive expense
Currency translation differences on foreign
currency net investments - (0.8) (1.1)
---------------------------------------------------- --------- ---------- -----------
Total other comprehensive expense - (0.8) (1.1)
---------------------------------------------------- --------- ---------- -----------
Total comprehensive income/(expense)
for the period attributable to equity shareholders 1.0 (0.7) 0.7
---------------------------------------------------- --------- ---------- -----------
Earnings per share from continuing operations
(Note 6)
- Basic EPS 0.6p 0.2p 1.1p
- Diluted EPS 0.6p 0.2p 1.0p
Earnings per share from adjusted profits
from continuing operations before non-recurring
or special items (Note 6)
- Basic and diluted EPS 0.6p 0.2p 1.0p
- Adjusted and diluted adjusted EPS 0.6p 0.2p 1.0p
---------------------------------------------------- --------- ---------- -----------
The accompanying notes form an integral part of this
consolidated interim financial information.
*See Note 5.
Consolidated balance sheet
unaudited at 31 July 2018
Unaudited Unaudited Audited
31 July 31 July 31 January
2018 2017 2018
GBPm GBPm GBPm
-------------------------------------- --------- --------- -----------
Assets
Non-current assets
Capitalised development costs 2.5 3.3 2.8
Other intangible assets 0.3 0.5 0.4
Property, plant and equipment 1.5 1.9 1.5
-------------------------------------- --------- --------- -----------
Total non-current assets 4.3 5.7 4.7
-------------------------------------- --------- --------- -----------
Current assets
Inventories 4.0 4.6 4.0
Trade and other receivables 5.1 4.4 4.5
Asset held for sale - - 0.8
Deferred tax asset 0.6 0.9 0.6
Cash and cash equivalents 6.8 2.1 5.2
-------------------------------------- --------- --------- -----------
Total current assets 16.5 12.0 15.1
-------------------------------------- --------- --------- -----------
Total assets 20.8 17.7 19.8
-------------------------------------- --------- --------- -----------
Current liabilities
Trade and other payables 5.9 4.7 6.2
Borrowings - 0.1 -
Provisions 0.2 0.6 0.2
Current tax payable 0.5 0.3 0.2
-------------------------------------- --------- --------- -----------
Total current liabilities 6.6 5.7 6.6
-------------------------------------- --------- --------- -----------
Non-current liabilities
Long-term provisions 0.3 0.5 0.3
-------------------------------------- --------- --------- -----------
Total non-current liabilities 0.3 0.5 0.3
-------------------------------------- --------- --------- -----------
Total liabilities 6.9 6.2 6.9
-------------------------------------- --------- --------- -----------
Net assets 13.9 11.5 12.9
-------------------------------------- --------- --------- -----------
Equity attributable to equity holders
of the parent
Called-up share capital 9.3 9.3 9.3
Share premium 5.4 5.4 5.4
Merger reserve 1.1 1.1 1.1
Capital redemption reserve 0.2 0.2 0.2
Own shares (1.9) (1.9) (1.9)
Other reserves 0.8 0.8 0.8
Translation reserve (1.5) (1.2) (1.5)
Retained earnings 0.5 (2.2) (0.5)
-------------------------------------- --------- --------- -----------
Total equity 13.9 11.5 12.9
-------------------------------------- --------- --------- -----------
The accompanying notes form an integral part of this
consolidated interim financial information.
Consolidated statement of changes in equity
unaudited interim results to 31 July 2018
Capital
Share Share Merger redemption Own Other Translation Retained
capital premium reserve reserve shares reserves reserve earnings Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
--------------------- -------- -------- -------- ----------- ------- --------- ----------- --------- -----
At 1 February
2017 9.3 5.4 1.1 0.2 (1.9) 0.8 (0.4) (2.3) 12.2
Profit for the
period - - - - - - - 0.1 0.1
Currency translation
differences on
foreign currency
net investments - - - - - - (0.8) - (0.8)
--------------------- -------- -------- -------- ----------- ------- --------- ----------- --------- -----
Total comprehensive
(expense)/income
for the period - - - - - - (0.8) 0.1 (0.7)
--------------------- -------- -------- -------- ----------- ------- --------- ----------- --------- -----
At 31 July 2017 9.3 5.4 1.1 0.2 (1.9) 0.8 (1.2) (2.2) 11.5
Profit for the
period - - - - - - - 1.7 1.7
Currency translation
differences on
foreign currency
net investments - - - - - - (0.3) - (0.3)
--------------------- -------- -------- -------- ----------- ------- --------- ----------- --------- -----
Total comprehensive
(expense)/income
for the period - - - - - - (0.3) 1.7 1.4
--------------------- -------- -------- -------- ----------- ------- --------- ----------- --------- -----
At 1 February
2018 9.3 5.4 1.1 0.2 (1.9) 0.8 (1.5) (0.5) 12.9
Profit for the
period - - - - - - - 1.0 1.0
Currency translation
differences on
foreign currency
net investments - - - - - - - - -
--------------------- -------- -------- -------- ----------- ------- --------- ----------- --------- -----
Total comprehensive
income for the
period - - - - - - - 1.0 1.0
--------------------- -------- -------- -------- ----------- ------- --------- ----------- --------- -----
At 31 July 2018 9.3 5.4 1.1 0.2 (1.9) 0.8 (1.5) 0.5 13.9
--------------------- -------- -------- -------- ----------- ------- --------- ----------- --------- -----
The own shares are held by the Elektron Technology 2012 Employee
Benefit Trust.
The accompanying notes form an integral part of this
consolidated interim financial information.
Consolidated statement of cash flows
unaudited interim results to 31 July 2018
Unaudited Unaudited
Half year Half year Audited
to to Year to
31 July 31 July 31 January
2018 2017 2018
GBPm GBPm GBPm
--------------------------------------------------- ---------- ---------- -----------
Net cash flows from operating activities
Profit/(loss) before taxation
- From continuing operations 1.4 0.6 2.7
- From discontinued operations (0.1) (0.4) (0.3)
Adjustments for:
Depreciation charge 0.2 0.2 0.5
Finance income - (0.1) (0.1)
Amortisation of capitalised development
costs and other intangibles 1.0 1.0 2.2
Loss/(gain) on disposal of discontinued
operations 0.1 0.1 (0.6)
--------------------------------------------------- ---------- ---------- -----------
Operating cash flows before working capital
changes
and non-recurring or special items 2.6 1.4 4.4
(Increase)/decrease in trade and other receivables (0.6) 2.6 2.1
Increase in inventories - (0.3) (0.8)
Decrease in trade payables (0.3) (2.2) (0.5)
Operating cash flow after working capital
changes 1.7 1.5 5.2
Decrease in provisions - (0.4) (1.0)
--------------------------------------------------- ---------- ---------- -----------
Cash generated from operations 1.7 1.1 4.2
Tax paid - (0.1) (0.2)
Interest received - 0.1 0.1
--------------------------------------------------- ---------- ---------- -----------
Net cash generated from operating activities 1.7 1.1 4.1
--------------------------------------------------- ---------- ---------- -----------
Net cash flows from investing activities
Purchase of property, plant and equipment (0.2) (0.3) (0.4)
Purchase of intellectual property - (0.2) (0.4)
Capitalisation of development costs (0.7) (0.4) (1.1)
Disposal of business 0.8 0.8 2.0
--------------------------------------------------- ---------- ---------- -----------
Net cash (used in)/generated from investing
activities (0.1) (0.1) 0.1
--------------------------------------------------- ---------- ---------- -----------
Net cash flows from financing activities
Decrease in bank loans - (1.4) (1.5)
Net cash used in financing activities - (1.4) (1.5)
--------------------------------------------------- ---------- ---------- -----------
Net increase/(decrease) in cash and cash
equivalents 1.6 (0.4) 2.7
Cash and cash equivalents at the beginning
of the period 5.2 2.5 2.5
--------------------------------------------------- ---------- ---------- -----------
Cash and cash equivalents at the end of
the period 6.8 2.1 5.2
--------------------------------------------------- ---------- ---------- -----------
The accompanying notes form an integral part of this
consolidated interim financial information.
Notes to the unaudited interim results
to 31 July 2018
1. Accounting policies
The interim financial information has been prepared on the basis
of International Financial Reporting Standards (IFRS) as adopted by
the European Union. Full details of accounting policies are
included in the Annual Report for the year ended 31 January 2018.
Fixed annual charges are apportioned to the interim period on the
basis of time elapsed. Other expenses are accrued in accordance
with the same principles used in the preparation of the annual
accounts.
The Group has not applied IAS 34 "Interim Financial Reporting",
which is not mandatory for UK groups, in the preparation of these
interim financial statements.
2. Segmental reporting - continuing operations
Revenues
Half year Half year
to to Year to
31 July 31 July 31 January
2018 2017 2018
Geographic GBPm GBPm GBPm
--------------------------------------- --------- --------- -----------
United Kingdom 5.7 5.2 10.7
Rest of Europe, Middle East and Africa 4.8 3.7 8.1
Asia Pacific and China 1.3 1.0 2.4
Americas 4.1 3.7 8.6
--------------------------------------- --------- --------- -----------
Total 15.9 13.6 29.8
--------------------------------------- --------- --------- -----------
Half year Half year
to to Year to
31 July 31 July 31 January
2018 2017 2018
Product segment GBPm GBPm GBPm
---------------- --------- --------- -----------
Bulgin 14.3 12.5 27.3
Checkit 0.4 0.2 0.5
EET 1.2 0.9 2.0
---------------- --------- --------- -----------
Total 15.9 13.6 29.8
---------------- --------- --------- -----------
Operating profit/(loss) before non-recurring or special
items
Half year Half year
to to Year to
31 July 31 July 31 January
2018 2017 2018
Product segment GBPm GBPm GBPm
---------------- ---------- --------- -----------
Bulgin 3.6 3.0 7.2
Checkit (2.2) (2.3) (4.4)
EET - (0.2) (0.3)
----------------- --------- --------- -------------
Total 1.4 0.5 2.5
----------------- --------- --------- -------------
Operating profit/(loss)
Half year Half year
to to Year to
31 July 31 July 31 January
2018 2017 2018
Product segment GBPm GBPm GBPm
---------------- ---------- --------- -----------
Bulgin 3.6 3.0 7.2
Checkit (2.2) (2.3) (4.4)
EET - (0.2) (0.2)
----------------- --------- --------- -------------
Total 1.4 0.5 2.6
----------------- --------- --------- -------------
3. Non-recurring or special items
Non-recurring or special items are disclosed separately to
improve visibility of the underlying business performance.
Management has defined such items as restructuring, site closure
costs, acquisition costs and other non-recurring items incurred
outside the normal course of business.
Half year Half year
to to Year to
31 July 31 July 31 January
2018 2017 2018
GBPm GBPm GBPm
---------------------------------- --------- --------- -----------
Non-cash items
- Restructuring provision release - - 0.1
---------------------------------- --------- --------- -----------
Total - - 0.1
---------------------------------- --------- --------- -----------
4. Taxation
The tax charge on profit from continuing operations before
taxation has been estimated at GBP0.3m (31July 2017: GBP0.2m; 31
January 2018: GBP0.8m).
5. Discontinued operations
Discontinued operations in the prior full and half-year results
comprise the Agar, Carnation, Wallace, Digitron, Titman Tip Tools,
Sheen Instruments and Elektron Medical brands together with
Queensgate Nano which was sold subsequent to 31 January 2018 on 15
February 2018. The prior year balances have been restated where
required.
Half year Half year
to to Year to
31 July 31 July 31 January
2018 2017 2018
GBPm GBPm GBPm
----------------------------- --------- --------- -----------
Operating loss - (0.3) (0.9)
Attributable tax - 0.1 0.2
----------------------------- --------- --------- -----------
Operating loss after tax - (0.2) (0.7)
(Loss)/profit on disposal (0.1) (0.1) 0.6
Attributable tax on disposal - - -
----------------------------- --------- --------- -----------
Total (0.1) (0.3) (0.1)
----------------------------- --------- --------- -----------
Queensgate Nano
The results of the Queensgate Nano discontinued operation, which
have been included in the consolidated statement of comprehensive
income, were as follows:
Half year Half year
to to Year to
31 July 31 July 31 January
2018 2017 2018
GBPm GBPm GBPm
----------------------------------------------- --------- --------- -----------
Revenue - 0.4 0.8
Expenses - (0.8) (1.7)
----------------------------------------------- --------- --------- -----------
Loss before tax - (0.4) (0.9)
Attributable tax - 0.1 0.2
----------------------------------------------- --------- --------- -----------
Loss from discontinued operations attributable
to equity shareholders - (0.3) (0.7)
----------------------------------------------- --------- --------- -----------
During the year, Queensgate Nano used less than GBP0.1m (H1
FY18: GBP0.4m) of the Group's net operating cash flows, paid less
than GBP0.1m (H1 FY18: GBP0.1m) in respect of investing activities
and paid less than GBP0.1m (H1 FY18: less than GBP0.1m) in respect
of financing activities.
Details of the disposal of Queensgate Nano are set out
below:
GBPm
------------------------------ -----
Property, plant and equipment 0.2
Capitalised development costs 0.3
Inventories 0.4
Assets sold 0.9
Net loss on disposal (0.1)
------------------------------ -----
Total consideration 0.8
------------------------------ -----
Satisfied by:
Cash and cash equivalents 0.8
------------------------------ -----
Total consideration 0.8
------------------------------ -----
Under the terms of the sale the Group has the right to receive
up to a further GBP0.8m based on Queensgate Nano's sales revenues
achieving certain targets in the twelve months after completion, of
which GBP0.1m was received in August 2018.
6. Earnings per share
Earnings per share (EPS) is the amount of post-tax profit
attributable to each share (excluding those held in the Employee
Benefit Trust or by the Company). Basic EPS measures are calculated
as the Group profit for the period attributable to equity
shareholders divided by the weighted average number of shares in
issue during the period. Diluted EPS takes into account the
dilutive effect of all outstanding share options priced below the
market price, in arriving at the number of shares used in its
calculation. Both of these measures are also presented on an
adjusted basis, to remove the effects of non-recurring or special
items. The note below demonstrates how this calculation has been
performed.
The calculation of the basic, adjusted and diluted earnings per
share is based on the following data:
31 July 31 July 31 January
2018 2017 2018
Key Million Million Million
------------------------------------------- ---- -------- -------- ----------
Weighted average number of ordinary
shares for the purposes of basic earnings
per share A 178.0 177.8 177.9
Effect of dilutive potential ordinary
shares: share options 10.7 4.6 9.2
------------------------------------------------- -------- -------- ----------
Weighted average number of ordinary
shares for the purposes of diluted
earnings per share B 188.7 182.4 187.1
------------------------------------------- ---- -------- -------- ----------
31 July 31 July 31 January
2018 2017 2018
Earnings/(loss) from continuing operations Key GBPm GBPm GBPm
---------------------------------------------- ---- ------- ------- ----------
Earnings for the period 1.0 0.1 1.8
Loss from discontinued operations,
net of tax 0.1 0.3 0.1
---------------------------------------------------- ------- ------- ----------
Continuing profit for the period attributable
to equity shareholders C 1.1 0.4 1.9
Total non-recurring or special items
included in profit before tax - - (0.1)
Total non-recurring or special items
in taxation - - -
---------------------------------------------- ---- ------- ------- ----------
Earnings adjusted for EPS D 1.1 0.4 1.8
---------------------------------------------- ---- ------- ------- ----------
31 July 31 July 31 January
Key 2018 2017 2018
------------------------------ ---- ------- ------- ----------
EPS measures
Basic continuing EPS C/A 0.6p 0.2p 1.1p
Diluted continuing EPS C/B 0.6p 0.2p 1.0p
------------------------------ ---- ------- ------- ----------
Adjusted EPS measures
Adjusted basic continuing EPS D/A 0.6p 0.2p 1.0p
Adjusted diluted EPS D/B 0.6p 0.2p 1.0p
------------------------------ ---- ------- ------- ----------
7. Cautionary statement
This interim financial information has been prepared only for
the shareholders of Elektron as a whole and its sole purpose and
use is to assist shareholders to exercise their governance rights.
Elektron and its Directors and employees are not responsible for
any other purpose or use or to any other person in relation to this
report.
The report contains indications of likely future developments
and other forward-looking statements that are subject to risk
factors associated with, among other things, the economic and
business circumstances occurring from time to time in the
countries, sectors and business segments in which the Group
operates. Key risks and their mitigation have not changed
materially in the period from those disclosed on pages 21 to 24 of
the annual financial statements for the year ended 31 January
2018.
These and other factors could adversely affect the Group's
results, strategy and prospects. Forward-looking statements involve
risks, uncertainties and assumptions. They relate to events and/or
depend on circumstances in the future which could cause actual
results and outcomes to differ materially from those currently
anticipated. No obligation is assumed to update any forward-looking
statements, whether as a result of new information, future events
or otherwise.
8. Other information
The financial information in this statement does not constitute
statutory accounts within the meaning of Section 434 of the
Companies Act 2006. The financial information in respect of the
year ended 31 January 2018 has been extracted from the statutory
accounts, which have been filed with the Registrar of Companies.
The Independent auditor's report on those accounts was unqualified
and did not contain a statement under Sections 498(2) or 498(3) of
the Companies Act 2006.
Copies of the interim results are available to download from the
Group's website, www.elektron-technology.com.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR VVLFFVKFBBBZ
(END) Dow Jones Newswires
September 19, 2018 02:00 ET (06:00 GMT)
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